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Auditor Report of KGN Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of KGN INDUSTRIES LIMITED ("the Company), which comprise the Balance Sheet as at 31st March, 2015, the statement of Profit & Loss and Cash Flow Statement for the year 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 flow of the Company in accordance with accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 2013 ("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.

Auditors' Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards 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 of 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 assessment, 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 appropriates of the accounting policies used and the reasonableness of the accounting estimates made by the 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 aforesaid 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 on 31st March, 2015.

b) In the case of the Profit & Loss Account Statement Balance, of the profit for the year ended on 31st March, 2015.

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on 31st March, 2015.

Report on Other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order, 2003 as amended Companies (Auditor's Report) (Amended) Order, 2004, issued by the Central Government of India in terms of sub - section (4A) of Section 227 of Companies Act, 2013, we enclose in the Annexure hereto a statement specified in paragraph 4 and 5 of the said order.

2. As required by Section 227(3) of the Act, 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 it appears from our examination of those books;

(iii) The Balance Sheet and Profit & Loss Statement Balance dealt with by this report are in agreement with the books of account;

(iv) On the basis of the written representation received from the directors, as on March 31, 2015, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,2015 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 2013.

(v) In our opinion, the Balance Sheet & Profit & Loss Statement Balance complies with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 2013.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date :

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification by the management.

(c) In our opinion, the Company has not disposed off any substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. There is no Inventories at the beginning as well as at the end of the year.

3. (a) The Company has granted unsecured loan to its Subsidiary Company and other parties covered in the register maintained u/s 189 of the Companies Act, 2013 . The Maximum amount granted during the year and year end balance of loan to such subsidiary were as per details given below. The terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

Sr. Name of the Party Relation with Maximum No. the Company Outstanding (in Rs.)

1. KGN Projects Limited Subsidiary Company 16,77,943/-

2. KGN Enterprises Limited Associates 15,88,39,809

Sr. Name of the Party Closing Balance No. As on 31/03/2015 (in Rs.)

1. KGN Projects Limited 15,97,943/-

2. KGN Enterprises Limited 14,42,77,868/-

(b) The Company has not taken loans, secured or unsecured from the companies or other parties covered in the register maintained u/s 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanation given to us, there are adequate Internal Control Procedure commensurate with size of a company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been notice in the internal control system.

5. (a) In our opinion, and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 189 of the Companies act, 2013 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the companies Act, 2013 and exceeding the value of rupees five lacs in respect of any party during the year have been made at price which are reasonable having regard to prevailing market price at the relevant time.

6. The Company has not accepted deposits from the public, within the meaning of section 58A and 58AA of the Act and rules framed there under.

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

8. As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 2013 for the Company.

9. (a) According to the information and explanation given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Fund, Employees State Insurance, Income Tax, Sales Tax, wealth tax, service tax, custom duty, excise duty and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty were in arrears, as at 31st March, 2015 for a period of more than six months from the date of they became payable.

(c) According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty which have not been deposited on account of any dispute.

10. In our opinion the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. Based on our examination of the records and the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. Based on our examination or the records and the information and explanations given to 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 during the year.

13. In our opinion and according to the information and explanation given to us, the Company is not a chit fund or a Nidhi / Mutual benefit fund/society. Accordingly the provisions of the clause 4(xiii) of the said Order are not applicable to the Company.

14. During the year under audit, Company has not dealt or traded in shares, securities, debentures and other investments. Therefore we have no comments to offer under clause (xiv) of the Order.

15. According to the information and explanations given to us, the Company has not given any guarantee for Loans taken by others from bank or financial institutions.

16. The Company has not obtained any term loan during the year and therefore, we have no comments to offer under clause (xvi) of the Order.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion funds raised on a short-term basis have been used for long term investment and vise a versa, during the year.

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, 2013 during the year.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year.

20. According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year and accordingly the provision of the relevant clause of the order is not applicable to the Company.

21. Based upon 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 course of our audit.

For Kirit & Co. Chartered Accountant

Kirit Kumar Proprietor Place: Ahmedabad M.No. 038047 Date: 30.05.2015 FRN: 132282W


Mar 31, 2014

We have audited the accompanying financial statements of KGN INDUSTRIES LIMITED (the Company), which comprise the Balance Sheet as at 31st March, 2014, the statement of Profit & Loss and Cash Flow Statement for the year 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 flow of the Company in accordance with accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) 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 auditing standards 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 of 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 assessment, 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 appropriates of the accounting policies used and the reasonableness of the accounting estimates made by the 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 aforesaid 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 on 31st March, 2014.

b) In the case of the Profit & Loss Account Statement Balance, of the profit for the year ended on 31st March, 2014.

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on 31st March, 2014.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended Companies (Auditor''s Report) (Amended) Order, 2004, issued by the Central Government of India in terms of sub - section (4A) of Section 227 of Companies Act, 2013, we enclose in the annexure hereto a statement specified in paragraph 4 and 5 of the said order.

2. As required by section 227(3) of the Act, 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 it appears from our examination of those books;

iii) The Balance Sheet and Profit & Loss Statement Balance dealt with by this report are in agreement with the books of account;

iv) On the basis of the written representation received from the directors, as on March 31, 2014, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2014 from being appointed as a Director in terms of sub-section (1) of section 164 of the Companies Act, 2013.

v) In our opinion, the Balance Sheet & Profit & Loss Statement Balance complies with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 2013.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date:

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

b) The fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification by the management.

c) In our opinion, the company has not disposed off any substantial part of fixed assets during the year and the going concern status of the company is not affected.

2) There is no Inventories at the beginning as well as at the end of the year.

3) a) The company has granted unsecured loan to its Subsidiary Company and other parties covered in the register maintained u/s 189 of the Companies Act, 2013. The maximum amount granted during the year and year end balance of loan to such subsidiary was as per details given below. The terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

Maximum Closing Balance Relation with Outstanding As on 31/03/2014 S. Name of the Party the Company No. (in Rs.) (in Rs.)

1. KGN Projects Limited Subsidiary 23,21,306/- 16,62,393/- Company

2. KGN Enterprises Associates 19,28,95,120/- 15,88,39,809/- Limited

b) The Company has not taken loans, secured or unsecured from the companies or other parties covered in the register maintained u/s 301 of the Companies Act, 2013.

4) In our opinion and according to the information and explanation given to us, there are adequate Internal Control Procedure commensurate with size of a company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been notice in the internal control system.

5) a) In our opinion, and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 189 of the Companies act, 2013 have been so entered.

b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangement entered in the register maintained under section 189 of the companies Act, 2013 and exceeding the value of rupees five lacs in respect of any party during the year have been made at price which are reasonable having regard to prevailing market price at the relevant time.

6) The Company has not accepted deposits from the public, within the meaning of section 58A and 58AA of the Act and rules framed there under.

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

8) As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 2013 for the Company.

9) a) According to the information and explanation given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Fund, Employees State Insurance, Income Tax, Sales Tax, wealth tax, service tax, custom duty, excise duty and other material statutory dues applicable to it.

b) According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty were in arrears, as at 31st March, 2014 for a period of more than six months from the date of they became payable.

c) According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty which have not been deposited on account of any dispute.

10) In our opinion the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

11) Based on our examination of the records and the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12) Based on our examination or the records and the information and explanations given to 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 during the year.

13) In our opinion and according to the information and explanation given to us, the Company is not a Chit fund or a Nidhi / Mutual benefit fund/society. Accordingly the provisions of the clause 4(xiii) of the said Order are not applicable to the Company.

14) During the year under audit, Company has not dealt or traded in shares, securities, debentures and other investments. Therefore we have no comments to offer under clause (xiv) of the Order.

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

16) The Company has not obtained any term loan during the year and therefore, we have no comments to Offer under clause (xvi) of the Order.

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion funds raised on a short-term basis have been used for long term investment and vise-a- versa, during the year.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 189 of the Companies Act, 2013 during the year.

19) According to the information and explanations given to us, the Company has not issued any debentures during the year.

20) According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year and accordingly the provision of the relevant clause of the order is not applicable to the Company.

21) Based upon 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 course of our audit.

For Kirit & Co. Chartered Accountants Sd/- Kirit Kumar Proprietor Date: 28th May, 2014 FRN : 132282W Place: Ahmedabad M. No. 038047


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of KGN INDUSTRIES LIMITED (the Company), which comprise the Balance Sheet as at 31st March, 2013, the statement of Profit & Loss and Cash Flow Statement for the year 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 flow of the Company in accordance with accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards 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 assessment, 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 appropriates of the accounting policies used and the reasonableness of the accounting estimates made by the 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 aforesaid 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 on 31st March, 2013.

b.) In the case of the Profit & Loss Account Statement Balance, of the profit for the year ended on 31st March, 2013.

c.) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on 31st March, 2013.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended Companies (Auditor''s Report) (Amended) Order, 2004, issued by the Central Government of India in terms of sub - section (4A) of Section 227 of Companies Act, 1956, we enclose in the Annexure hereto a statement specified in paragraph 4 and 5 of the said order.

2. As required by Section 227(3) of the Act, 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 it appears from our examination of those books;

(iii) The Balance Sheet and Profit & Loss Statement Balance dealt with by this report are in agreement with the books of account;

(iv) On the basis of the written representation received from the directors, as on March 31, 2013, and taken on record by the Board of Directors, we report that 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.

(v) In our opinion, the Balance Sheet & Profit & Loss Statement Balance complies with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

KGN INDUSTRIES LIMITED ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification by the management.

(c) In our opinion, the Company has not disposed off any substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. There is no Inventories at the beginning as well as at the end of the year.

3. (a) The Company has granted unsecured loan to its Subsidiary Company and other parties covered in the register maintained u/s 301 of the Companies Act, 1956. The Maximum amount granted during the year and year end balance of loan to such subsidiary was as per details given below. The terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(b) The Company has not taken loans, secured or unsecured from the companies or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanation given to us, there are adequate Internal Control Procedure commensurate with size of a company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been notice in the internal control system.

5. (a) In our opinion, and according to the information and explanations given to us, the transactions 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, the transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at price which are reasonable having regard to prevailing market price at the relevant time.

6. The Company has not accepted deposits from the public, within the meaning of section 58A and 58AA of the Act and rules framed there under.

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

8. As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for the Company.

9. (a) According to the information and explanation given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Fund, Employees State Insurance, Income Tax, Sales Tax, wealth tax, service tax, custom duty, excise duty and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty were in arrears, as at 31st March, 2013 for a period of more than six months from the date of they became payable.

(c) According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty which have not been deposited on account of any dispute.

10 In our opinion the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. Based on our examination of the records and the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. Based on our examination or the records and the information and explanations given to 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 during the year.

13. In our opinion and according to the information and explanation given to us, the Company is not a chit fund or a Nidhi / Mutual benefit fund/society. Accordingly the provisions of the clause 4(xiii) of the said Order are not applicable to the Company.

14. During the year under audit, Company has not dealt or traded in shares, securities, debentures and other investments. Therefore we have no comments to offer under clause (xiv) of the Order.

15. According to the information and explanations given to us, the Company has not given any guarantee for Loans taken by others from bank or financial institutions.

16. The Company has not obtained any term loan during the year and therefore, we have no comments to offer under clause (xvi) of the Order.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion funds raised on a short-term basis has been used for long term investment and vice-a-versa, during the year.

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 during the year.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year.

20. According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year and accordingly the provision of the relevant clause of the order is not applicable to the Company.

21. Based upon 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 course of our audit.

For Kirit & Co.

Chartered Accountants

Sd/-

Kirit Kumar

Proprietor

M. No. 038047

FRN : 132282W Place: Ahmedabad

Date: 23rd May, 2013


Mar 31, 2010

We have audited the attached Balance Sheet of KGN Industries Limited as at 31st March, 2010 and the Profit and Loss account 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.

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 misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosure 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 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act. 1956, and on the basis of the books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments on the annexure referred to 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 books of accounts as required by law have been kept by the Company, so far as appears from our examination of the those books;

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

d) In our opinion, the Balance Sheet and the Profit & Loss Account dealt by this report 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 representation received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 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 explanation 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:

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010; and

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

iii) 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)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification by the management.

(c) In our opinion, the Company has not disposed off any substantial part of fixed assets during the year and the going concern status of the company are not affected.

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

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has granted loans, secured or unsecured to companies, firms or other parties in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has not taken loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with a size of a company and the nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in to 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, the transactions made in pursuance of contracts or arrangements 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 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted deposits from the public, within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

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

8. We are informed that the company is not required to maintain cost records as prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956 having regard to the nature of the business of the Company.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education fund, employees state income tax, sales tax, wealth tax, service tax, custom duty, excise duty and other material statutory dues applicable to it.

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

(c) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute.

10. In our opinion, the company has no accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and 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 a financial institution, bank or debenture holders.

12. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The company is not a chit fund, nidhi, mutual benefit fund or society. Therefore, the provisions of clause 4(xiii) are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. Therefore the provision of clause 4(xiv) 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 others from banks or financial institutions during the year.

16. As per the records of the company and as per the information and explanations given to us, the company has not taken any term loan during the year.

17. On the basis of overall examination of the balance sheet of the company, the funds raised on short- term basis have not been used for long-term investment and vise-a-versa, during the year.

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, during the year.

19. The company has not issued any debentures during the year.

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

21. During the year, no fraud on or by the company has been notice or reported during the course of our audit.

For, KIRITKUMAR & CO. Chartered Accountants

Sd/- Date : 27.08.2010 Proprietor Place: Mumbai M. No. 38047

 
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