We have audited the accompanying financial statements of Hira Ferro Alloys Limited ("the Company") which comprise the balance sheet as at 31st March 2013, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act).This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2013;

(ii) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. 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;

b. 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;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of. the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure

Re: HIRA FERRO ALLOYS LIMITED

Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date,

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. No material discrepancies have been noticed on physical verification of stocks as compared to the books records.

(iii) (a) The company has not granted any secured\unsecured loans to Companies, Firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. therefore, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditor's Report) Order,2003 are not applicable to the company.

(b) The company has taken unsecured loans from one company, four firms and one other party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.123.08 lakhs and the year-end balance was Rs. 16.11 lakhs.

(c) In our opinion, the terms & conditions on which loans have been taken from company, firms and other party listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the company.

(d) The company was regular in repaying the amount as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system 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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has not taken any deposits from public, therefore the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained, however, we have not made a detailed examination of the same with a view to determine whether they are accurate and complete.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it and according to the information and explanations given to us, no undisputed amounts payable in respect of above statutory dues were in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues outstanding of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess on account of any dispute other than the following:-

Name of the Statute         Nature of Dues                       Amount
                                                                 Rs.in 
                                                                 Lacs

Central Sales Tax Act,1956  Demand of Central Sales Tax for the   2.62
                            F.Y. 1997-98

C.G. Commercial Tax Act,
1994                        Demand of Entry Tax for the           0.62*
                            F.Y. 2002-03

Central Sales Tax Act,1956  Demand of Central Sales Tax for the   0.72
                            F.Y. 1994-95

Central Sales Tax Act,1956  Demand of Central Sales Tax for the   1.64
                            F.Y. 1995-96

C.G. Commercial Tax Act,
1994                        Demand of Entry Tax for the           5.14
                            F.Y. 2007-08

Central Sales Tax Act,1956  Demand of Central Sales Tax for the   1.16
                            F.Y. 1997-98

Name of the Statut Forum where dispute is pending Central Sales Tax Act,1956 Board of Revenue, Bilaspur

C.G. Commercial Tax Act,1994    Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

Central Sales Tax Act,1956 Board of Revenue, Bilaspur

C.G. Commercial Tax Act,1994 Board of Revenue, Bilaspur

Central Sales Tax Act,1956 Board of Revenue, Bilaspur

Name of the Statute             Nature of Dues                  Amount
                                                                Rs.in
                                                                Lacs  

C.G. Commercial Tax Act, 1994   Demand of Entry Tax for the     3.26*
                                F.Y. 2006-07

Central Sales Tax Act,1956      Demand of Central Sales Tax      4.20
                                for the F.Y. 2007-08

C.G. Commercial Tax Act, 1994   Demand of Entry Tax for the     19.64
                                F.Y.2007-08

C.G. Commercial Tax Act, 1994   Demand of Entry Tax for the     17.54
                                F.Y. 2008-09

Central Sales Tax Act           Demand of Central Sales Tax      1.33
                                for the F.Y. 2008-09

Central Sales Tax Act           Demand of Central Sales Tax      2.36
                                for the F.Y. 2008-09

Income Tax Act, 1961            Income Tax demand for the       0.91*
                                A.Y 1996-97

Income Tax Act, 1961            Income Tax demand for the       43.21
                                A.Y. 2010-11

Central Excise Act, 1944        Demand raised of CENVAT          5.05
                                Credit availed on Capital 
                                Goods for the F.Y. 1995-96

Central Excise Act, 1944        Cenvat Credit on inputs for      0.54
                                the period from August, 2011
                                to January, 2012

Central Excise Act, 1944        Service Tax reversal on as       0.16
                                such clearances for the 
                                period from Oct, 2009 to 
                                Aug. 2011

Name of the Statute             Forum where dispute is pending

C.G. Commercial Tax Act, 1994   Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

Central Sales Tax Act,1956      Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

C.G. Commercial Tax Act, 1994   Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

C.G. Commercial Tax Act, 1994   Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

Central Sales Tax Act           Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

Central Sales Tax Act           Dy. Commissioner, Commercial Taxes,
                                Appeals, Raipur

Income Tax Act, 1961            Commissioner (Appeal) Income Tax,
                                Raipur

Central Excise Act, 1944        Commissioner (Appeal),Customs and
                                Central Excise, Raipur

Central Excise Act, 1944        Commissioner (Appeal),Customs and
                                Central Excise, Raipur

* Net of amount deposited under protest or otherwise.

(x) The company has no accumulated losses at the end of the financial year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

(xii) We are of the opinion that 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) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the terms & conditions on which the company has given corporate guarantees to the Banks to secure the loans granted by such banks for other companies are not prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, the company has not raised term loan during the financial year under report. Accordingly, the provisions of clause 4(xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that, prima facie short-term funds have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to any company, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xix) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures, therefore, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xx) The company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

                                                 For OPSinghania & Co.

                                       (Firm Registration No.002172C)

                                                Chartered Accountants

                                                   (SANJAY SINGHANIA)

Place : Raipur                                                PARTNER

Date  : 28th May 2013                            Membership No.076961