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Auditor Report of Inertia Steel Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Inertia Steel Limited ("the Company"''), which comprise the Balance Sheet as at 31st March 2014 and the Statement of Profit & 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

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 principles generally accepted in India, including, Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (''the Act") read with general circular 15/2013 dated 13th 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

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, but not for the purpose of expressing an opinion on the effectiveness of the Company''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.

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 2014;

ii. In the case of the Statement of Profit & 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") 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 sub section (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, 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.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 of our report on other legal and regulatory requirements of even date)

As required by the Companies (Auditor''s Report) Order, 2003 issued by Central Government of India in terms of Section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we further report that:-

i. The Company does not have any Fixed Assets, hence clause 4(1) of the Companies Auditor''s Report) Order, 2003 is not applicable to the Company.

ii. The Company does not have any Inventory, hence clause 4(h) of the Companies Auditor''s Report) Order, 2003 is not applicable to the Company.

iii. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, 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.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loans from one party listed in the register maintained under Section 301 of the Companies Act, 1956 in respect of which maximum amount involved during the year was Rs. 0.19 lacs and the year end balance was Rs. Nil lacs..

iv. During the year the Company has neither purchased any fixed assets or inventory nor sold any goods. Hence the provisions of clause 4(iv) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

v. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

In our opinion all these transactions have been made at prices which are reasonable having regard to prevailing market prices at reasonable time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public and hence directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable for the year under audit.

vii. The paid up capital of the company was less than Rs.50.00 lacs as at the commencement of the financial year and average annual turnover for the period was not in excess of Rs. 5.00 Crores, hence the internal audit system is not applicable to the company.

viii. According to the information and explanations given to us, the maintenance of cost records is not applicable to the company.

ix. According to the information and explanations given to us in respect of statutory dues:

(a) The company has generally been regular in depositing undisputed statutory dues, including Income tax, Sales tax, Wealth tax, Service tax, and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31 st March, 2014 for a period of more than six months from the date they became payable.

x. The Company has accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit. The Company has incurred cash loss in the immediately preceding financial year.

xi. The Company has not borrowed any money from financial institution or bank or debenture holders. Therefore, the provisions of clause 4(xi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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 is not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities & other investments.

xv. According to the information and explanations given to us, the Company has not given any corporate guarantees for loan taken by others from a banks or financial institutions.

xvi. According to the information and explanations given to us, the Company has not obtained any term loans during the year.

xvii. On the basis of review of utilization of funds, which is based on overall examination of the balance sheet of the Company as at 31st March, 2014, related information''s as made available to us and as represented to us, by the management, we are of the opinion, that no funds raised on short term basis have been utilized for long term purposes.

xviii. During the year, the Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures and hence provisions of clause 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xx. During the year covered by our report the company has not raised any money by public issue.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the course of our audit.

For Kaloti & Lathiya Chartered Accountants (Registration No. : LQ4589W)

Sanjeev N. Bajaj Membership No.-107678 Place: Mumbai Dated: 29.05.2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Inertia Steel Limited ("the Company ), which comprise the Balance Sheet as at 31st March 2013 and the Statement of Profit & 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

Management is responsible for the preparation of these financial statements that give a true and tair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, including; section 211 of the Companies Art, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of nterna 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

A uditors'' 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 audho 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 Company''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.

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 & 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") 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 sub section (3C) of section 211 of the Companies Act, 1956;

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

ANNFXURE TO IMPENDENT AimiTORS'' REPORT

(Referred to in paragraph 1 of our report on other legal and regulatory requirements of even date)

As required by the Companies (Auditor''s Report) Order, 2003 issued by^Central GoveZent of India in te''rrns of Section 227 (4A) of the Compares Act 19 6, and on the basis of such checks as we considered appropriate, we further report tnat-

i The Company does not have any Fixed Assets, hence clause 4(1) of the Companies Auditor''s Report) Order, 2003 is not applicable to the Company.

ii The Company does not have any Inventory, hence clause 4(ii) of the Companies Auditor''s Report) Order, 2003 is not applicable to the Company.

iii (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not gmnted any loans secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loans from one party listed in the register maintained under Section 301 of the Companies Act 1956 in respect of which maximum amount involved during the year was Rs. 0.19 lacs and the year end balance was Rs.0.19 lacs..

iv In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size oi the Company and the nature of its business for the purchase of inventory, fixed assets and also 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 internal control system.

In our opinion and according to the information and explanations given to us, the '' transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

In our opinion all these transactions have been made at prices which are reasonable having regard to prevailing market prices at reasonable time.

vi According to the information and explanations given to us, the
vii The paid up capital of the company was less than Rs.50.00 lacs as at the «ncement of the financial year and average annual turnover for the period waTnoUn excess of Rs. 5.00 Crores, hence the internal audit system is not applicable to the company.

viii. According to the information and explanations given to us, the maintenance of cost records is not applicable to the company.

ix. According to the information and explanations given to us in respect of statutory dues:

(a) The company has generally been regular in depositing undisputed slatutory dues, including Income tax, Sales tax, Wealth tax, Service tax, and any other statutory dues with the appropriate authorities during the year except in few cases.

(b) According to the information and explanations given to us no undisputed amounts payfble in respect of such statutory dues were outstanding as a^J March, 2013 for a period of more than six months from the date they became payable.

x The Company has accumulated losses at the end of the financial year. The Comply has not incurred cash losses during the financial year covered by the audTt The Company has incurred cash loss in the immediately preceding financial year.

xi Based on our audit procedures and information and explanations given by the moment, we are of the opinion that as on 31st March, 2013 the Company has not defaulted in repayment of dues to banks and financial institutions.

xii In our opinion and according to the explanations given to us and based on the Nation" arable, no loaL and advances have been granted by the Company of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or fund/society. Therefore the provisions of clause 4 (xm) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company. institutions. According to the information and explanations given to ns, the Company has not obtained any term loans during the year. been utilized for long term purposes. of the Companies Act, 1956. Company.

During the year covered by our report the company has not raised any money by public issue. • Tn the best of our knowledge and belief and according to the information and XXL LptaalTons givlto us, nofraud on or by the comply was nouced or reported during the course of our audit. For Kaloti & Lathiya

Chartered Accountants

(Registration No. : 104589W)

SanjeevN.Bajaj Membership No. -107678

Place: Mumbai

Dated: 30.05.2013


Mar 31, 2011

1 We have audited the Balance Sheet of M/s INTERTIA STEEL LIMITED as on 31st march ,2011 and also the profit & loss Account and cash flow statement of the company for the year ended on that date annexed there to. these financial statement are the responsibility of the company's management. Our responsibility is to excess as opinion on these financial statements based on our audit.

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

3 As require by the companies (Auditor's Report) order,2003 issued by the Central Government of the India in terms of sub section (4A) of section 227(4A) of the companies Act,1956, we give in the annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the said order ,to the extent applicable to the company.

4 Further to our comments in the annexure referred to in paragraph 3 above, we report that

a We have obtain 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 of accounts, as required by law, have been kept by the company, so far as appears from our examination of such books;

c The Balance Sheet, Profit & Loss Account and cash Cash Flow Statements dealt with by this report are in agreement with the books of accounts.

d In our opinion the Balance Sheet, Profit & Loss Account and cash Cash Flow Statements dealt with by this report are in compliance with the Accounting standards referred to in sub-section (3c) of Section 211 of the Companies Act 1956.

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

f In our opinion and to the best of our information and according to the explanation given to us, the said accounts read With significant accoutln9 policies and notes thereon given the information required by the Companies Act 1956,in the manner so required and give a true and fair view in the conformity with the accounting policies generally accepted in India.

i In the case of the Balance Sheet, of the state of affairs of the company as on 31st March ,2011 and

ii In the case of the Profit & Loss Account, of the profit of the company for the year ended on that date.

ii In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

On the basis of the such checks of the books and records of the company as we considered appropriate and in terms of information and explanations given to us, we state that

i) The company does not have any Fixed Assets, hence clause 4(1) of the companies (Auditor's Report) Order,2003 is not applicable to the company,

ii) The company does not any Inventory, hence clause 4(ii) of the companies (Auditor's Report) Order,2003 is not applicable to the company.

iii) The company has not granted any unsecured loan during the year to the company covered in the register maintained under section 301 of the Companies Act, 1956

In our opinion and according to the information and explanation given to us, As explained to us, the rates of interest and other terms and conditions of such loans given by the company, are prima facie are not prejudicial to the interest of the company.

As no tenure of repayments is fixed. It is not possible to express opinion whether the payment of principal is regular.

The company has taken reasonable steps for recovery of principal and interest.

The company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act,1956 during the year. Accordingly sub-clauses (e),(f),(g) of clause (iii) of this order are not applicable.

iv) In our opinion and according to the information and explanation given to us, there to us, there is adequate internal control procedure commensurate with the size of the company and nature of its business for the purchase of inventory and for the sale of goods and services. Further, on the basis of our examinations of the books of accounts and according to the information and explanations given to us, we come across major weaknesses in the aforesaid internal control system.

v) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been so entered in the register required to be maintained under that section.

In our opinion, all these transaction have been made at price which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted during the year from the public within the meaning of section 58A.58AA or any other relevant provisions of the companies Act, 1956 and rules framed there under.

vii) The paid up capital of the company was less than Rs.25 Lacs as at the commencement of the financial year and average annual turnover for the period was not in excess of Rs.2 Crores, hence the internal audit system is not applicable to the company.

viii) According to the information and explanation given to us, the maintenance of cost records has been prescribed by the central government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the company.

ix) According to the information and explanation given to us, and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues and any other statutory dues except income tax applicable, with the appropriate authorities.

x) According to information and explanations given to us and the records of the company examined by us, in our opinion there are no undisputed statutory dues outstanding as on 31st March,2011 for the period exceeding six months from the date they become payable.

According to the information and explanations given to us, there are no dues of Income Tax pending in dispute.

xi) The company has no accumulated losses as on March 31,2011 and it has not incurred any cash losses during the financial year or in the financial year immediately preceding to this financial year.

xii) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank as on balance sheet date.

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 is not applicable to the company.

xiv) In our opinion ,the company is not a dealer or trader in shares, securities, debentures and other investments.

xv) During the year the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

xvi) in our opinion and according to the information and explanations given to us the company has not given corporate guarantee for loans taken by others from bank or financial institutions.

xvii) According to the records of the company examined by us and the information and explanation given to us, the company has not obtained any term any loan during the year, hence, hence, the question of applicable of the same does not arise.

xviii) According to the information and explanations given to us and on overall examinations of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment.

xix) During the year the company has not made any preferential allotment of shares to parties and companies in the register maintained under section 301 of the companies Act,1956.

xx) During the year company has not issued any debentures nor has created securities in respect of debentures.

xxi) During the year covered by our report the company has not raised any money by public issue.

xxii) During the course of information of the books and records of the company, carried out with the generally accepted auditing practices in India. and according to the information and expiations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by management.

FOR KALOTI AND LATHIYA

Chartered Accountants

F.R.N 104589W

MUMBAI SANJEEV N BAJAJ

DATED : 05/05/2011 Partner

Membership No. 107678


Mar 31, 2010

1. We have audited the Balance Sheet of M/S INERTIA STEEL LIMITED as on 31st March, 2010 and also the Profit & Loss. Account and Cash Flow Statement of the company 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.

2. 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 misstatements. 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.

3. As required by the Companies!Auditorss Report) Order, 2003 issued by the Central Government of India In terms of sub section (4A) of section 227(4A) of the Companies Act, 1956, we give in the annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the said order, to the extent applicable to the company.

4. Further to our comments in the annexure referred to in paragraph 3 above, 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 of books of accounts, as required by law, have been kept by the company, so far as appears from our examination of such books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

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

e) On the basis of written representations received from the Directors, as on 31st March 2009, and taken on record by the Board of Directors, we report that none of the Directors of the company is disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon 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 policies generally accepted in India.

i. In the case of the Balance Sheet, of the state of affairs of the company as on 31st March, 2010 and

ii. In the case of the Profit & Loss Account, of the profit of the company for the year ended on that date.

iii. In case of 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 TO MEMBERS OF INERTIA STEEL LIMITED ON THE ACCOUNTS AS ON AND FOR THE YEAR ENDED ON 31* MARCH, 2010.

On the basis of the such checks of the books and records of the company as we considered appropriate and in terms of information and explanations given to us, we state that :-

i) The company does not have any Fixed Assets, hence clause 4(i) of the companies (Auditors Report)Order, 2003 is not applicable to the company.

ii) The company does not have any Inventory, hence clause 4(H) of the companies (Auditors Report)Order, 2003 is not applicable to the company.

iii) The company has not granted any unsecured loan during the year to the company covered in the register maintained under section 301 of the Companies Act, 19S6. in our opinion and according to the information and explanations given to us, As explained to us, the rates of interest and other terms and conditions of such loans given by the company, are prima facie are not prejudicial to the interest of the company.

As no tenure of repayment is fixed, it is not possible to express opinion whether the payment of principal is regular.

The company has taken reasonable steps for recovery of principal and interest.

The company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year. Accordingly sub-clauses (e), (f), (g) of clause (iii) of this order are not applicable.

iv) In our opinion and according to the information and explanation given to us, there is adequate internal control procedure commensurate with the size of the company and nature of its business for the purchase of inventory and for the sale of goods and services. Further, on the basis of our examinations of the books of accounts and according to the information and explanations given to us, we have not come across major weaknesses in the aforesaid internal control system.

v) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been so entered in the register required to be maintained under that section.

In our opinion, all these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposits during the year from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there-under.

vii) The paid up capital of the company was less than Rs.25 Lacs as at the commencement of the financial year and average annual turnover for the period was not in excess of Rs.2 Crores, hence the internal audit system is not applicable to the company.

viii) According to information and explanation given to us, the maintenance of cost records has not been prescribed by the central government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the company.

ix) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues and any other statutory dues except income tax applicable, with the appropriate authorities.

x) According to information and explanations given to us and the records of the company examined by us, in our opinion, there are no undisputed statutory dues outstanding as on 31st March, 2010 for a period exceeding six months from the date they become payable.

According to the information and explanations given to us, there are no dues of Income Tax pending in dispute.

xi) The company has no accumulated losses as on March 31, 2010 and it has not incurred any cash losses during the financial year or in the financial year immediately preceding to this financial year.

xii) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank as on balance sheet date.

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 (Audtiors Report) Order, 2003 is not applicable to the company.

xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv) During the year the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

xvi) In our opinion and according to the information and explanations given to us the company has not given corporate guarantee for loans taken by others from bank or financial institutions.

xvii) According to the records of the company examined by us and the information and explanation given to us, the company has not obtained any term loan during the year, hence, the question of application of the same does not arise.

xviii) According to the information and explanations given to us and on overall examinations of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment.

xix) During the year 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.

xx) During the year the company has not issued any debentures nor has created securities in respect of debentures.

xxi) During the year covered by our report the company has not raised any money by public issue.

xxii) During the course of information of the books and records of the company, carried out with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by management.



FOR M/S KALOTI AND LATHIYA

CHARTERED ACCOUNTANTS

(SANJEEEVN.BAJAJ)

PARTNER

Membership No.107678

MUMBAI

DATED: 1 st September, 2010 FRN 104589W

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