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Auditor's Report

To the Shareholders’ of BHUSHAN STEEL LIMITED

We have audited the attached Balance Sheet of BHUSHAN STEEL LIMITED as on 31st March, 2006 and also the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors ’ Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments in the Annexure referred to above we report that:

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit
In our opinion, proper books of account, as required by law have been kept by the Company, so far as appears from our examination of those books
The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account
In our opinion the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by the report comply with the requirements of Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956
On the basis of the written representations received from the Directors as on 31st March, 2006 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2006 from being appointed as a Director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956
In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

in the case of the Balance Sheet, of the state of affairs of the company as at 31 st March, 2006
in the case of the Profit and Loss Account, of the Profit of the company for the year ended on that date and
in the case of Cash Flow Statement, of the cash flow of the Company for the year ended on that date

Annexure

(Referred to in paragraph 1 our report of even date)

The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
In our opinion the fixed assets covering significant value have been physically verified by the Management during the year at reasonable intervals and having regard to the size of the company and the nature of its assets and on the basis of the information and explanations given by the Management, no material discrepancies have been noticed on such verification.
No substantial part of fixed assets have been disposed off during the year.

ii)

As per information & explanation given to us, the inventory of the Company in its possession have been physically verified by the Management at reasonable intervals. Stocks in the possession and custody of the third parties and stocks in transit as on 31st March, 2006 have been verified by the Management with regard to confirmation or statement of account or correspondence of the third parties or subsequent receipt of goods.
The procedure of physical verification of inventory of the Company followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.such verification.
The Company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification as compared to book records.

iii)

As per information & explanation given to us, the company has not granted or taken any loans, secured or unsecured to/from companies, firms or
other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

iv)

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with
the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our Audit, no major weakness has been noticed in the internal controls.

In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956.

vi)

To the best of our knowledge, the company has not accepted any deposits covered under section 58A and 58AA of the Companies Act, 1956.

vii)

To the best of our knowledge and explanations given to us, the Company has an internal audit system commensurate with its size and the nature of its business.

viii)

He is also the Founder Director of the Academy for Photographic Excellence- a Jindal Photo Initiative, the first of it’s kind Academy which is a true synergy of the Academic, Professional and the Corporate. And has translated his vision into a School for all Professional and aspiring Photographers.

To the best of our knowledge, the Central Government has prescribed the maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956, which have been maintained by the company and these have been broadly reviewed by us and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not, nor we are required, carried out any detailed examination of such accounts and records.

ix)

To the best of our knowledge and according to the information and explanations given to us the Company is regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues applicable to it with the appropriate authorities.
According to the information and explanations given to us there were no arrears of outstanding Income Tax, Wealth Tax, Sale Tax, Service Tax, Cess, Custom Duty, Excise Duty and any other statutory dues as at 31.03.2006 for a period of more than six months from the date they became payable.
To the best of our knowledge and according to information and explanation given to us there are no dues of Income Tax/ Sales Tax / Custom Duty / Wealth Tax / Excise Duty / Cess / Service Tax which have not been deposited on account of any dispute except in the following cases

Name of the Statute	Nature of the Dues	Amount (Rs. in Lacs)	Period to which amount related	Forum where dispute is pending
The Central Excise Act, 1944	Differential Duty	0.31		Commissioner (Appeal)
	Seizure	0.60	Jan 2002	High Court
	Job work challan	0.50	Oct 2000 Nov 2000	High Court
	Modvat on welding electrodes	0.40	28-03-2001	High Court
Sales Tax	Penalty on Trade Tax	0.75	F.Y.1993 - 1994	Asstt. Commissioner

The Company has no brought forward losses and has not incurred any cash losses during the financial year covered by our Audit and the immediate preceding financial year.

xi)

In our opinion, the company has not defaulted in repayment of dues to Financial Institutions or Banks or Debenture holders.

xii)

On the basis of verification of accounts and records maintained by the Company and to the best of our knowledge & belief, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii)

The Company is not a chit fund or nidhi / mutual benefit fund / society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor’s Report)Order, 2003 is not applicable to the company.

xiv)

To the best of our knowledge and according to information given to us, the Company is not dealing or trading in shares, securities and debentures

xv)

To the best of our knowledge and according to the information and explanation given to us, the Company has given guarantee for loans taken by others from Banks/ Financial Institutions, the terms and conditions whereof are not prejudicial to the interest of the Company.

xvi)

To the best of our knowledge and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained

xvii)

According to the Cash Flow Statement and other records examined by us and information & explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investments

xviii)

According to the information & explanations given to us, the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix)

According to the information & explanations given to us the Company has not issued any debenture during the year.

xx)

According to the information & explanations given to us, the Company has not raised any money by Public Issue during the year.

xxi)

Based upon the audit procedure performed and information and explanation given by the management we report that no fraud on or by the Company has been noticed or reported during the year.