Auditor Report of Indian Bright Steel Company Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements of Indian Bright Steel Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and 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

2. 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") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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.

Auditors'' Responsibility

3. 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.

4. 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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.

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

Opinion

6. 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.

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the order") 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.

8. 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 sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to the Auditors'' Report (Referred to in paragraph 7 of our Report of even date)

1) (a) The company has maintained proper records showing full particulars including quantitative and situation of the Fixed Assets.

(b) The management has physically verified the fixed assets and since the assets lying in capital work in progress has no value in use and the same is scrapped during the year.

(c) During the year, Company has scraped all of the fixed assets.

2) The Company does not have any inventory and hence the requirement of para 2 are not applicable.

3) (a) The Company has taken interest free unsecured loans from four (4 nos.) parties listed in the register maintained U/s 301 of the Companies Act aggregating to Rs.25,05,300/- during the year.

(b) In the absence of any specific stipulation as to the rate of interest and other terms and conditions as to repayments on which loans has been taken, we are unable to comment upon the same.

(c) The company has not given any loans and advances to its Associate & Other related parties listed in the register maintained U/s 301 of the Companies Act.

4) There are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to sale of goods.

5) In respect of transactions entered in the register maintained in pursuance of section 301, of the Companies Act 1956,

(a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding Rupees Five Lakhs each have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by Reserve Bank of India and the provision of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

8) According to the information and explanations provided to us, the Company is not required to have cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Act.

9) (a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, and other statutory dues with appropriate authorities

(b) According to the records of the Company, there are no cases of the dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise duty, Cess, Service tax which has not been deposited on account of disputes.

10) The Company has accumulated losses of Rs.64,67,625/- as at the end of the year and the company has not incurred cash losses during the current year and the immediately preceding financial year.

11) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Societies are not applicable to the company.

14) 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.

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

16) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans obtained during the year were, prima facie, been used for which the same are obtained.

17) According to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have prima facie, has been used during the year for long term investment.

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 Companies Act 1956 in contravention of the aforesaid section, during the year.

19) No debentures have been issued by the company and hence, the question of creating securities in respect thereof does not arise.

20) We have verified the end use of the fund raised by the Company through the preferential allotment and are disclosed in the notes to the financial statements.

21) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For DESAI ASSOCIATES Chartered Accountants Firm Registration No. 102286W

Place : Mumbai (SUDHIR K. JAIN) Date : 30th April, 2014 Partner Membership No. : 120610

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Mar 31, 2012

1. We have audited the accompanying financial statements of Indian Bright Steel Company Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2012, the Statement of Profit and Loss and the cash flow statement for the year ended, and a summary of significant accounting policies and other explanatory information. These financial statements are the responsibility of the Company's management that give and true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 tree of material misstatement. An audit includes examining, all 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies' (Auditor's Report) Order, 2003 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 paragraphs 4 and 5 of the said order to the extent applicable

4. Further to our comments in the Annexure referred to in paragraph 3 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 account as required by law, have been kept by the Company, so far as it appears from the examination of the books.

iii) the balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of accounts.

iv) in our opinion, balance sheet, the statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

vi) on the basis of the written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31M March, 2012 from being appointed as a director under Section 274 (1)(g) of the Companies Act, 1956.

vii) in our opinion and to the best of our information and according to the explanations given to us, the accounts read with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

a) in the case of balance sheet, of the state of affairs of the company as at 31s' March, 2012 and,

b) in the case of statement of profit and loss of the profit of the company for the year ended on that date.

c) in the case of cash flow statement the cash flows of the company for the year ended as on that date.

Annexure to the Auditors' Report (Referred to in paragraph 3 of our Report of even date)

1) (a) The company has maintained proper records showing full particulars including quantitative and situation of the Fixed Assets.

(b) The management has physically verified the fixed assets and as explained no material discrepancy has been noticed on such verification

(c) During the year, Company has not disposed off substantial part of fixed assets.

2) The Company does not have any inventory and hence the requirement of para 2 are not applicable.

3) (a) The Company has taken interest free unsecured loans from Companies Firms or other parties listed in the register maintained U/s 301 of the Companies Act.

(b) In the absence of any specific stipulation as to the rate of interest and other terms and conditions as to repayments on which loans has been taken, we are unable to comment upon the same.

(c) The company has not given any loans and advances to its Associate & Other related parties listed in the register maintained U/s 301 of the Companies Act.

4) There are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to sale of goods.

5) In respect of transactions entered in the register maintained in pursuance of section 301, of the Companies Act 1956,

(a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding Rupees Five Lakhs each have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by Reserve Bank of India and the provision of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

8) According to the information and explanations provided to us, the Company is not required to have cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Act.

9) (a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, and other statutory dues with appropriate authorities

(b) According to the records of the Company, there are no cases of the dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise duty, Cess, Service tax which have not been deposited on account of disputes.

10) The Company have accumulated losses of Rs.5828334 as at the end of the year and the company has not incurred cash losses during current year, however there where cash losses in the immediately preceding financial year.

11) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Societies are not applicable to the company.

14) In our opinion, the Company is 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.

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

16) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans obtained during the year were, prima facie, been used for which the same are obtained.

17) According to the information and explanations given to us and on overall examination of the balance sheet of the company, We report that no funds raised on short-term basis have prima facie, has been used during the year for long term investment.

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 Companies Act 1956 in contravention of the aforesaid section, during the year.

19) No debentures have been issued by the company and hence, the question of creating securities in respect thereof does not arise.

20) We have verified the end use of the fund raised by the Company through the preferential allotment as disclosed in the notes to the financial statements.

21) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For OESAI ASSOCIATES

Chartered Accountants

Firm Registration No. 102286W

Place : Mumbai (SUDHIR K. JAIN)

Date : 23th May, 2012 Partner

Membership No.: 120610

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Mar 31, 2011

We have audited the attached Balance Sheet of INDIAN BRIGHT STEEL COMPANY LIMITED as at March 31,2011, the Profit and Loss Account and also the Cash Flow Statement 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 the 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 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 (CARO 2003) (as amended) 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:

(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 account 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 agrsement 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 the section 211(3C) of the Companies'Act, 1956 to the extent applicable;

(v) On the basis of written representations received from the directors, as on March 31,, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31 „ 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies' Act, 1956.

(vi) 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 read together with the notes on accounts 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, 2011;

(b) in the case of the Profit and Loss Account, of the Loss 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.

Annexure to the Auditors' Report (Referred to in paragraph 3 of our Report of even date)

On the basis of the records produced to us for our verification / perusal, such checks as we considered appropriate and in terms of information and explanations given to us on our enquiries, we state that

1 (a) The Company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets / capital work in progress.

(b) As explained to us, all the assets have been physically verified by the management at reasonable intervals during the Year. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off a substantial part of Fixed Assets during the year.

2 The Company does not have any opening or closing inventories.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clauses (b), (c) and (d) of paragraph 4(iii) of the Order are not applicable. The Company has taken loan from two parties. The maximum balance of loans outstanding during the Year was Rs. 7.10 Lakhs and the year end balance was Rs. 7.10 Lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the Company.

(c) The Company is regular in repaying the principal amounts as stipulated.

4 In our opinion and according to the information and explanations given to us, there are in general adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and also wiih regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5 (a) On the basis of the audit procedures performed by us and according to the information and explanations provided by the management, the contracts or arrangements that need to be entered into the register maintained under 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, there were no transactions made in pursuance of contracts or arrangements that were required to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year and hence the provisions of this sub-clause (b) of clause 4(v) of the Order is not applicable.

6 The Company has not accepted any deposits from the public and consequently the directives issued by the Reserve Bank of India, the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder are not applicable.

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

8 According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of services and trading activities carried on by the Company and therefore, clause 4(viii) of the Order is not applicable.

9 (a) According to the information and explanation given to us and on the basis of our examination of books of accounts and other records, the Company is regular in depositing with appropriate authorities undisputed statutory dues. We are informed that there is no liability towards Provident Fund, Employees State Insurance Act, Investor Education and Protection Fund. Wealth Tax, Custom Duty, Excise Duty and Cess for the year under Audit.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty, excise duty and cess were in arrears, as at March 31,, 2011 for a year of more than six months from the date they became payable.

(c) There is no pending dispute in respect of Income-tax and other statutory dues.

10 As on March 31 „ 2011, the accumulated losses of the Company are more than 50% of its net worth. The company has incurred cash losses for the year ended March 31,, 2011 and had also incurred cash losses in the immediately preceding financial year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks. Further, the Company has not issued any debentures and hence clause 4 (xi) of the Order, to that extent, is not applicable.

12 In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 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 Order are not applicable to the Company.

14 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 Order are not applicable to the Company.

15 In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks or financial institutions during the year.

16 The Company has neither raised any new term loans during the year nor there was any amount outstanding at the beginning or at the end of the Year.

17 According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company, we are of the opinion that there are no finds raised on short term basis which have been used for long term investments. The Company has not raised any funds on long term basis

18 The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures. Accordingly, clause 4(xix) of the Order is not applicable.

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

21 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 A. J. MEHTA & ASSOCIATES Chartered Accountants Firm Registration No. 106179W

(ATUL MEHTA) Proprietor Membership No. : 36959 Mumbai Dated: April 30, 2011

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Mar 31, 2010

We have audited the attached Balance Sheet of INDIAN BRIGHT STEEL COMPANY LIMITED as at March 31, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the 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 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 (CARO 2003) (as amended) 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:

(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 account 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 the section 211(3C) of the Companies Act, 1956 to the extent applicable;

(v) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) 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 read together with the notes on accounts 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, 2010;

(b) in the case of the Profit and Loss Account, of the Loss 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.





ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our Report of even date)

On the basis of the records produced to us for our verification / perusal, such checks as we considered appropriate and in terms of information and explanations given to us on our enquiries, we state that

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

(b) As explained to us, all the assets have been physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off a substantial part of Fixed Assets during the year.



2 (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us the procedures of physical verification of inventories followed by the management as explained to us are, in our opinion, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt within the books of account.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms

or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clauses (b), (c) and (d) of paragraph 4(iii) of the Order are not applicable.

The Company has taken loans from one party. The maximum balance of loans outstanding during the year was ? 2.00 Lakhs and the year end balance was ? 2.00 Lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the Company.

(c) The Company is regular in repaying the principal amounts as stipulated.

4 In our opinion and according to the information and explanations given to us, there are in general adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and also with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5 (a) On the basis of the audit procedures performed by us and according to the information

and explanations provided by the management, the contracts or arrangements that need to be entered into the register maintained under 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, there were no transactions made in pursuance of contracts or arrangements that were required to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year and hence the provisions of this sub-clause (b) of clause 4(v) of the Order is not applicable.

6 The Company has not accepted any deposits from the public and consequently the directives issued by the Reserve Bank of India, the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder are not applicable.

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

8 According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of services and trading activities carried on by the Company and therefore, clause 4(viii) of the Order is not applicable.

9 (a) According to the information and explanation given to us and on the basis of our

examination of books of accounts and other records. the Company is regular in depositing with appropriate authorities undisputed statutory dues. We are informed that there is no liability towards Provident Fund, Employees State Insurance Act, nvestor Education and Protection Fund, Wealth Tax, Custom Duty, Excise Duty and Cess for the year under Audit.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty, excise duty and cess were in arrears, as at March 31, 2010 for a period of more than six months from the date they became payable.

(c) There is no pending dispute in respect of Income-tax and other statutory dues.

10 As on March 31, 2010, the accumulated losses of the Company are more than 50% of its net worth. The company has incurred cash losses for the year ended March 31, 2010 and had also incurred cash losses in the immediately preceding financial year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks. Further, the Company has not issued any debentures and hence clause 4 (xi) of the Order, to that extent, is not applicable.

12 In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 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 Order are not applicable to the Company.

14 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 Order are not applicable to the Company.

15 In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks or financial institutions during the year.

16 The Company has neither raised any new term loans during the year nor there was any amount outstanding at the beginning or at the end of the year.

17 According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company, we are of the opinion that there are no funds raised on short term basis which have been used for long term investments. The Company has not raised any funds on long term basis.

18 The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures. Accordingly, clause 4(xix) of the Order is not applicable.

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

21 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 A. J. MEHTA & ASSOCIATES

Chartered Accountants

Firm Registration No. 106179W



Place : Mumbai (ATUL MEHTA)

Dated : July 31, 2010 Proprietor

Membership No. : 36959