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.

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.

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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

As required by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

(i) 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;

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of those books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being Appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) The Company has not provided for liability in respect of revised supplementary bill for electricity charges of Rs. 51,96,125/- raised by W.B.S.E.B. had the same been provided in the books. The Profit & Loss Account would have been shown a loss of Rs. 45,44,011/- as against reported figure of Profit of Rs. 6,52,114/- and the debit balance of Profit & Loss Account in the Balance Sheet would have shown Rs. 2,81,88,285/- as against reported figure of Rs. 2,29,92,160/-

(vii) Subject to above, 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;

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(b) in the case of the Profit and Loss Account, of the Profit for the year ending on that date; and

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF KUSUM IRON & STEEL LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2014.

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The fixed assets have been physically verified by the management during the year. We are informed that no material discrepancies were noticed by the management 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.

2. (a) The inventory of the Company, has been physically verified by the Management during the year.

(b) The procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the books records.

3. According to the information and explanations given to us, the Company has not granted any loans, Secured or Unsecured to/from Companies, firms or other parties covered in the Register maintained under Section 301 of the Act which are prejudicial to the company and hence other related clauses are also not applicable.

4. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of inventories, fixed assets and sale of goods and services.

5. On the basis of our examination of the books of account, the company has not entered into any transaction exceeding Rs. 5.00 Lakhs in respect of any party during the financial year that needs to be entered in the registered pursuant to the Section 301 of the Act.

6. The Company has not accepted any deposits under the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under.

7. In our opinion, the Company's present internal audit system is commensurate with its size and nature of business.

8. Maintenance of cost records has not been prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956.

9. According to the information and explanations given to us, in respect of statutory and other dues.

(a) The Company has been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, E.S.I, Sales Tax, Custom Duty, Excise Duty, Income Tax, Wealth Tax, Service Tax, Cess and any other statutory dues with the appropriate authorities during the year except deferred Sales Tax of Rs. 5,28,343.40 which is outstanding for a period of more than six months from the date they became payable.

(b) There are no cases of non-deposit with the appropriate authorities of disputed dues of Sales Tax/Income Tax/Custom Duty/Wealth Tax/Excise Duty/Cess/Service Tax.

10. The Company's accumulated losses at the end of the financial year are not less than 50% of its net worth. Further the Company has not incurred cash losses in the current financial year but incurred cash loss in the immediately proceeding financial year.

11. Based on our audit procedures and as per the information and explanations given by the Management, the Company did not have any dues to any financial institution or bank or to debenture holders during the year.

12. As explained to us, the Company has not granted any loans or advance on the basis of security by way of pledge of shares, debenture and other securities.

13. In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special status applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to it.

14. In respect of Shares, Securities, Debentures and other investments dealt or traded by the company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The Company has not applied or obtained any term loans during the year.

17. According to the information and explanations given to us, and on an overall examinations of the Balance Sheet of the Company we report that the company has not raised any funds during the year either on long term or short term basis.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the year.

19. No debenture have been issued by the Company and hence the question of creating securities in respect there of does not arise.

20. The Company has not raised any money by public issue during the year.

21. As per the information and explanations given to us and on the basis of examination of records, no fraud on or by the company has been noticed or reported during the financial year.

                                          For R.K. BIHANI & ASSOCIATES
                                                 CHARTERED ACCOUNTANTS

Place :- SILIGURI                                        (R.K. BIHANI)
Dated:- The 30th day of May, 2014                           Proprietor