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Auditor Report of Monnet Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of MONNET INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner sorequired 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 31 March 2015;

(ii) in the case of the statement of profit and loss, of the loss 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.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

* Note No. 31 in respect of accumulated losses of the company as on 31st March 2015 exceeding its paid up capital and free reserves;

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. In our opinion and as per the information and explanations provided to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2015

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

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

2. (a) Physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials. We were informed that physical verification of manganese ore & coke was made on the basis of volume and density which is approximately correct.

(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) In our opinion the Company is maintaining proper records of inventories. The discrepancies noticed on such verification between the physical stocks and book records were not significant and the same have been properly dealt with in the books of account.

3. As informed to us the company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section189 of the Companies Act.

4. In our opinion there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. According to the information and explanations given to us the company has not accepted any deposits, in terms of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. In respect of business activities of the company, maintenance of cost records has not been specified by the Central Government under sub-section (l) of section 148 of the Companies Act.

7. As per information and explanations given to us, the company is regular in depositing undisputed statutory dues including provident fund, employees'state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. There are no outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

8. The accumulated losses of the company as at the end of the year are more than the 50% of the net worth of the company. The company has incurred cash loss during the year under audit and in the immediately preceding financial year.

9. Based on our audit procedures and on the basis of information and explanations given to us by the management, we are of the opinion that there is no default in repayment of dues to the Financial Institutions, banks or debenture holders as at the year end.

10. According to information and explanations given to us the Company has not given any guarantee for loan taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company.

11. In our opinion term loans were applied for the purpose for which the loans were obtained by the company.

12. Based upon the audit procedures performed and 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 the year ended 31.03.2015.

For O.P. BAGLA & CO. CHARTERED ACCOUNTANTS Firm Regn. No. 000018N

Sd/- (ATUL BAGLA) Place : New Delhi Partner Date : 28.05.2015 M. No. 91885


Mar 31, 2014

We have audited the accompanying financial statements of MONNET INDUSTRIES LIMITED, which comprise the Balance Sheet as at March 31, 2014 the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

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 and financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 of India (the “Act"), read with the General Circular 15/ 2013 dated September 13, 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.

Auditor''s 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 and other applicable authoritative pronouncements 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 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.

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:

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 Statement of Profit and Loss, 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.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) order 2004 (“the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, (hereinafter referred to as the “Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 and 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 dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/ 2013 dated September 13, 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.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS'' REPORT ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2014

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

b) As explained to us, major fixed assets have been physically verified by the management during the year. We have been informed that the discrepancies noticed on such verification as compared to book record were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.

c) As the Company has not disposed off any of the fixed assets during the year, paragraph 4 (i) (c) of the said order is not applicable.

2. The Company has no stocks during the year under audit.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to/From Companies, firms or other Parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly, paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and with regard to the sale of goods. During the course of audit, no major weakness has been noticed in the underlying internal controls.

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register. b) As per information and explanations given to us aforesaid transactions exceeding the aggregate amount of Rupees five lacs in respect of each Party made during the year, have been made at prices which are reasonable having regard to the prevailing market price at the relevant time except investment in 6.5% Non Convertible Cumulative Redeemable Preference shares of M/s Monnet Ispat & Energy Ltd wherein rate of borrowing is substantially higher than the return expected on Non Convertible Cumulative Redeemable Preference shares.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion and according to the information and explanations given to us, the Company has adequate internal audit system commensurate with its size and nature of its business.

8. We are informed that the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

9. As per information and explanations given to us the Company has been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, and other statutory dues with the appropriate Authorities. There are no undisputed statutory dues at the year end outstanding for a Year of more than six months from the date they become payable.

10. The accumulated losses of the Company as at the end of the year are more than the 50% of the net worth of the Company. The Company has incurred cash loss during the year under audit and in the immediately preceding financial year.

11. As per information and explanations given to us, the Company has not defaulted in repayment of dues to the bank.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Paragraph 4 (xii) of the order is not applicable.

13. The Company is dealing in shares, securities, debentures and other investments and proper records have been maintained of the transactions and contracts and timely entries have been made therein. Also the shares, securities, debentures and other securities have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks for financial institutions during the year.

15. According to the information and explanations given to us the term loans taken by the Company have been applied for the purposes for which the loans were obtained.

16. During the year the Company has made preferential allotment of Preference shares to Companies covered in the Register maintained u/s 301 of the Companies Act 1956. In our opinion, the price at which the shares have been issued is not prejudicial to the interest of the Company.

17. Since the Company has not raised money by way of Public Issue during the year paragraph 4 (xx) of the order is not applicable.

18. Based upon the audit procedures performed and 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 the year ended 31.03.2014.

19. Clauses in Paragraph no.4 (xiii),,(xvii),(xix) of the order are not applicable to the Company for the year under report.

For O.P. BAGLA & CO. CHARTERED ACCOUNTANTS Firm Regn. No. 000018N

Sd/- Place : New Delhi (ATUL BAGLA) Date : 29th May, 2014 PARTNER M.NO. 91885


Mar 31, 2011

We have audited the attached Balance Sheet of MONNET INDUSTRIES LIMITED as at 31st March, 2011 and Profit & Loss Account for the Year Ended 31st March, 2011 annexed thereto and cash flow statement for the year ended on that date. 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 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 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.

1 As required by the Companies (Auditor's Report) order, 2003 as amended by the Companies (Auditor's Report) (Amendment) order 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in the paragraphs 4 & 5 of the said order to the extent applicable to the Company.

2.Further to our comments in the annexure referred to in paragraph 1 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 account as required by law have been kept by the Company so far as appears from our examination of such books.

c)The Balance Sheet and the Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the profit and loss account and balance sheet 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 representation received from the directors and taken on records by the Board of Directors, we report that, none of the director is disqualified as on 31 st March, 2011 from being appointed as Director u/s 274(1)(g) 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 other Notes thereon in Schedule give the information as required by the Companies Act, 1956 in the manner so required and give true and fair view in conformity with accounting principles generally accepted in India :-

i) In the case of the Balance Sheet of the State of affairs of the Company as at 31.03.2011.

ii) In the case of the Profit & Loss Account of the profit for the Year Ended on that date.

iii) In the case of Cash Flow Statement of the cash flows for the Year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2011

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

b) As explained to us, major fixed assets have been physically verified by the management during the year. We have been informed that the discrepancies noticed on such verification as compared to book record were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.

c) As the Company has not disposed off any of the fixed assets during the year, paragraph 4 (i) (c) of the said order is not applicable.

2. The Company has no stocks during the year under audit.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to/From Companies, firms or other Parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly, paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and with regard to the sale of goods. During the course of audit, no major weakness has been noticed in the underlying internal controls.

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register.

b) As per information and explanations given to us aforesaid transactions exceeding the aggregate amount of Rupees five lacs in respect of each Party made during the year, have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion and according to the information and explanations given to us, the Company has adequate internal audit system commensurate with its size and nature of its business.

8. We are informed that the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

9. As per information and explanations given to us the Company has been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, and other statutory dues with the appropriate Authorities. There are no undisputed statutory dues at the year end outstanding for a Year of more than six months from the date they become payable.

10. The accumulated losses of the company as at the end of the year are less than the 50% of the net worth of the company. The company has not incurred cash loss during the year under audit and in the immediately preceding financial year.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Paragraph 4 (xii) of the order is not applicable.

12. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks for financial institutions during the year.

13. According to the information and explanations given to us the company has not taken any term loans during the year.

14. During the year the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained u/s 301 of the Companies Act 1956. As such paragraph 4 (xviii) of the order is not applicable.

15. Since the Company has not raised money by way of Public Issue during the year paragraph 4 (xx) of the order is not applicable.

16. Based upon the audit procedures performed and 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 the year ended 31.03.2011.

17. Other clauses of the order are not applicable to the Company for the year under report. For O.P. BAGLA & CO.

CHARTERED ACCOUNTANTS

(RAKESH KUMAR)

PARTNER

MNo. 87537

Firm Regn. No. 000018N

PLACE : NEW DELHI

DATED : 03/08/2011


Mar 31, 2010

We have audited the attached Balance Sheet of MONNET INDUSTRIES LIMITED as at 31st March, 2010 and Profit & Loss Account for the Year Ended 31st March, 2010 annexed thereto and cash flow statement for the year ended on that date. 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 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 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.

1. As required by the Companies (Auditor's Report) order, 2003 as amended by the Companies (Auditor's Report) (Amendment) order 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in the paragraphs 4 & 5 of the said order to the extent applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph 1 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 account as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet and the Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the profit and loss account and balance sheet 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 representation received from the directors and taken on records by the Board of Directors, we report that, none of the director is disqualified as on 31st March, 2010 from being appointed as Director u/s 274(1)(g) 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 other Notes thereon in Schedule - 11 give the information as required by the Companies Act, 1956 in the manner so required and give true and fair view in conformity with accounting principles generally accepted in India :-

i) In the case of the Balance Sheet of the State of affairs of the Company as at 31.03.2010.

ii) In the case of the Profit & Loss Account of the PROFIT for the Year Ended on that date.

iii) In the case of Cash Flow Statement of the cash flows for the Year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010

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

b) As explained to us, major fixed assets have been physically verified by the management during the year. We have been informed that the discrepancies noticed on such verification as compared to book record were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.

c) As the Company has not disposed off any of the fixed assets during the year, paragraph 4 (i) (c) of the said order is not applicable.

2. The Company has no stocks during the year under audit.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to/From Companies, firms or other Parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly, paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and with regard to the sale of goods. During the course of audit, no major weakness has been noticed in the underlying internal controls.

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in

the register maintained under section 301 of the Act have been entered in the register.

b) As per information and explanations given to us aforesaid transactions exceeding the aggregate amount of Rupees five lacs in respect of each Party made during the year, have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion and according to the information and explanations given to us, the Company has adequate internal audit system commensurate with its size and nature of its business.

8. We are informed that the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

9. As per information and explanations given to us the Company has been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, and other statutory dues with the appropriate Authorities. There are no undisputed statutory dues at the year end outstanding for a Year of more than six months from the date they become payable.

10. The accumulated losses of the company as at the end of the year are less than the 50% of the net worth of the company. The company has not incurred cash loss during the year under audit and in the immediately preceding financial year.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Paragraph 4 (xii) of the order is not applicable.

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

13. According to the information and explanations given to us the company has not taken any term loans during the year.

14. During the year the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained u/s 301 of the Companies Act 1956. As such paragraph 4 (xviii) of the order is not applicable.

15. Since the Company has not raised money by way of Public Issue during the year paragraph 4 (xx) of the order is not applicable.

16. Based upon the audit procedures performed and 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 the year ended 31.03.2010.

17. Other clauses of the order are not applicable to the Company for the year under report.

For O.P. BAGLA & CO. Chartered Accountants

Sd/-

(RAKESH KUMAR)

Place : New Delhi Partner

Dated : 10th August, 2010 M. No. 87537

Firm Regn. No. 000018N