CONTENTS Proxy Form 65

Essar Steel LimitedAnnexure referred to in paragraph [3] of our report of even dateRe: Essar Steel Limited (‘the Company’)(i) (a) The Company has maintained proper records showing fullparticulars, including quantitative details and situation offixed assets.(b) All fixed assets have not been physically verified bythe management during the year but there is a regularprogramme of verification which, in our opinion, isreasonable having regard to the size of the Companyand the nature of its assets. As informed, no materialdiscrepancies were noticed on such verification.(c) There was no substantial disposal of fixed assets duringthe year.in register maintained u/s 301 of the Companies Act, 1956,the clauses (f) and (g) are not applicable(iv) In our opinion and according to the information and explanationsgiven to us, there is an adequate internal control systemcommensurate with the size of the Company and the nature of itsbusiness, for the purchase of inventory and fixed assets and forthe sale of goods and services. During the course of our audit, nomajor weakness has been noticed in the internal control system inrespect of these areas.(v) According to the information and explanations provided by themanagement, we are of the opinion that there are no contracts orarrangements referred to in Section 301 of the Act that need to beentered into the register maintained under that section.(ii) (a)(b)(c)(iii) (a)(b)(c)(d)The management has conducted physical verification ofinventory at reasonable intervals during the year.The procedures of physical verification of inventory followedby the management are reasonable and adequate inrelation to the size of the Company and the nature of itsbusiness.The Company is maintaining proper records of inventoryand no material discrepancies were noticed on physicalverification.As informed, the Company has not granted any loans,secured or unsecured to companies, firms or other partiescovered in the register maintained under Section 301 of theCompanies Act, 1956.As the Company has not granted any loans, secured andunsecured to companies firms or other parties covered inregister maintained u/s 301 of the Companies Act, 1956,the clauses (b) to (d) are not applicable.As informed, the Company has not taken any loans, securedor unsecured from companies, firms or other partiescovered in the register maintained under Section 301 ofthe Companies Act, 1956.As the Company has not taken any loans, secured andunsecured from companies firms or other parties covered(vi) The Company has not accepted any deposits from the public.(vii) In our opinion, the Company has an internal audit systemcommensurate with the size and nature of its business.(viii)We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Governmentfor the maintenance of cost records under Section 209(1)(d)of the Companies Act, 1956, and are of the opinion that primafacie, the prescribed accounts and records have been made andmaintained.(ix) (a) Undisputed statutory dues including provident fund, investoreducation and protection fund, or employees’ state insurance,income-tax, sales-tax, wealth-tax, service tax, customs duty,excise duty, cess have generally been regularly deposited withthe appropriate authorities.(b) According to the information and explanations given to us,no undisputed amounts payable in respect of provident fund,investor education and protection fund, employees’ stateinsurance, income-tax, wealth-tax, service tax, sales-tax,customs duty, excise duty, cess and other undisputed statutorydues were outstanding, at the year end, for a period of morethan six months from the date they became payable.(c) According to the records of the Company, the dues outstandingof income-tax, sales-tax, wealth-tax, service tax, customsduty, excise duty and cess on account of any dispute, are asfollows:10