Auditor Report of Rungta Irrigation Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Rungta Irrigation Limitedfthe Company"), having Regd. office at 101, Pragati Tower, 26, Rajendra Place, New Delhi-110008 which comprise the Balance Sheet as at March 31,2015 and the Statement of Profit and Loss and the 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

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 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 in accordance with the provisions of the Act for safeguarding 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 controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of 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 have taken into account the provisions of the Act, the accounting and auditing standards and the matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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 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 financial statement that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 financial statements.

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 at March 31,2015;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) In the case of Cash Flow Statement, of the cash flow of the Company for the year ended on that date. Report on other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section (ii) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 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 it appears from our examination of those books.

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

d) In our opinion, the aforesaid 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 written representations received from the Directors as on March 31, 2015, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2015, 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 ofthe Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note no 26(3)to the financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in our report of even date)

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

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

(ii) (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

(iii) (a) The Company has given unsecured advances to Ramgarh Sponge Iron Pvt. Ltd. which is covered under section 189 of the Companies Act, 2013. During the said year Company has also taken unsecured advances from the said Company and transactions thereof are duly recorded in the register maintained for this purpose. At the end of the year, the net amount of Rs. Nil (Previous year Rs. Nil) stands Receivable/ payable by the Company under audit (Refer Note no 26(17)b. As per explanation given to us all the above transactions have been made in the normal course of business and are prima facie not prejudicial to the interest of the Company.

(b) The Company has taken unsecured long term deposits as disclosed in Note no -4 of the financial statements which includes Rs. 899.62 lacs from Vaishno Devi Vinimay Pvt Ltd payable as on 31.03.2015(Previous year Rs. 657 lacs) .which is covered under section 189 of the Companies Act, 2013.

(c) In our opinion, the terms and conditions on which advances /deposits were given or taken by the Company, secured or unsecured are prima facie not prejudicial to the interest of the Company.

(d) According to information and explanations given to us no interest is charged or given on the above transactions.

(i) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed' assets and sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control system.

(ii) The Company has not accepted any deposits from the public in accordance with the provisions of sections 73 to 76 of the Companies Act and the rules framed there under.

(iii) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of Section 148 of the Companies Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(iv) (a) According to the records of the Company, the Company has generally been regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund (except the unpaid dividend of Rs. 9.89 Lac(Prev.year 9.89lac) held in abeyance due to pending legal cases), Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it.

According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March' 31.2015 for a period of more than six months from the date they became payable except the dues of unpaid Dividend of Rs. 9.89 Lacs ( Previous year Rs. 9.89 lacs) which is held in abeyance due to pending legal cases.

(b) According to the information given by the Company and its record, the following are the details of dues outstanding as on 31.03.2015 on account of disputed cases in respect of Sales Tax, Excise Duty, Income Tax, Custom Tax, Wealth Tax, Cess and Service Tax:

(v) The Company does not have any accumulated losses at the end of the year and has not incurred cash losses during the year and in the immediately preceding financial year.

S. Name of Statute Nature of dues No

1 Central Sales Tax Act Central Sales Tax and Sales and Sales Tax/VAT Acts Tax A/AT of Various States of various Sates

2 Central Excise Act, Service Tax

S. Name of Statute Forum where Amount (Rs. In No dispute is Lac) pending

1 Central Sales Tax Act High Court Trade 12.75 and Sales Tax/VAT Acts Tax Tribunal JC/ of various Sates DC (Appeal)

2 Central Excise Act, Commissioner, 1.52 Appeals

(vi) Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the Company has not defaulted in re-payment of dues to Bank or Financial Institutions or Debenture Holders.

(vii) In our opinion and according to the information and explanation to us, the Company has not given any guarantee for loans taken by others from any Bank or Financial Institutions.

(viii) According to the records of the Company, the term loans obtained by the Company have been applied for the purpose for which it is obtained

(ix) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For ANDROS & CO. CHARTERED ACCOUNTANTS (Regn. NO-008976N)

(BRIJ BHUSHAN GARG)

PARTNER M. No. 084865 DATED: 28/05/2015 PLACE: DELHI

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Mar 31, 2014

We have audited the accompanying financial statements of M/s Rungta Irrigation Limited, having Regd. office at 101, Pragati Tower,26,Rajendra Place, New Delhi-110008 which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 133 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.

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. 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.

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 profit of the company for the year ended on that date and

c) In the case of Cash Flow Statement, of the cash flow of the company for the year ended on that date.

As required by section 143 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, 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 Balance Sheet, the Statement of Profit and Loss and the cash flow statement comply with the Accounting Standards referred to in 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 section (1) of section 164 of the Companies Act, 2013.

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

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

Re : Rungta Irrigation Limited

[Refer to 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) As explained to us, the fixed assets have been physically verified by the management during the year in phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

2. (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

3. (a) The company has returned unsecured advances to Ramgarh Sponge Iron Pvt. Ltd. which is covered under section 189 of the Companies Act, 2013. These transactions are duly recorded in the register maintained for this purpose. At the end of the year, the net amount of Rs. Nil stands payable by the company under audit. As per explanation given to us all the above transactions have been made in the normal course of business and are prima facie not prejudicial to the interest of the company.

(b) In our opinion the terms and conditions on which advances were given or taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(c) According to information and explanations given to us no interest is charged or given on the above transactions.

4. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuous failure to correct major weakness in internal control.

5. (a) In our opinion and according to 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 189 of the Companies Act, 2013 have been so entered.

(b) In our opinion and according to the information and explanation given to us the transaction made in pursuance of the aforesaid contracts or arrangement in respect of each party made during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 73 of the Companies Act, 2013.

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

8. We have broadly reviewed the records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 128 of the Companies Act 2013, and are of the opinion that prima facie the records have been maintained. We have however, not made a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, the company has generally been regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund (except the unpaid dividend of Rs. 9.89 Lac ( Previous year Rs. 9.89 lac) held in abeyance due to pending legal cases), Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it.

According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March'' 31.2014 for a period of more than six months from the date they became payable except the dues of unpaid Dividend of Rs. 9.89 Lacs ( Previous year Rs. 9.89 lacs) which is held in abeyance due to pending legal cases.

(b) According to the information given by the company and its record, the following are the details of dues outstanding as on 31.03.2014 on account of disputed cases in respect of Sales Tax, Excise Duty, Income Tax, Custom Tax, Wealth Tax, Cess and Service Tax:

S.No Name of Statute Nature of dues Forum where Amount dispute is pending (Rs. In Lac)

1. Central Sales Tax Central Sales High Court 12.75 Act and Sales Sales Acts of Trade Tax TaxA/AT Tax and various Sates Tax / Tribunal VAT of Various JC/DC (Appeal) States 2. Central Excise Act, Service Tax Commissioner, Appeals 1.52

10. The Company does not have accumulated losses and the Company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. The company has paid the CRPS dues of IDBI Bank Ltd in full as agreed by the bank under one time settlement. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the company has not defaulted in re-payment of dues to Bank or Financial Institutions or Debenture Holders.

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.

13. The company is not a chit fund or a Nidhi /Mutual benefit fund/Society, therefore clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. In our opinion and according to the information and explanation to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation to us, the company has not given any guarantee for loans taken by others from any Bank or Financial Institutions.

16. According to the records of the company, the term loans obtained by the company have been applied for the purpose for which it is obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that no funds raised on short- term basis have been utilized generally for long term investment.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section. 189 of the Companies Act, 2013.

19. The Company has not issued any debenture during the year.

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

AUDITOR''S REPORT AS PER REPORT OF EVEN DATE ANNEXED For ANDROS & CO. CHARTERED ACCOUNTANTS REGN.NO-008976N

sd/- Place: DELHI (BRIJ BHUSHAN GARG) Date: 27.05.2014 PARTNER M. No. 84865

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Mar 31, 2013

We have audited accompanying financial statements of M/s Rungta Irrigation Limited, having Regd. office at 101, Pragati Tower- 26, Rajendra Place, New Delhi-110008 which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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.

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. 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.

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 31,2013;

b) in the case of the Statement of Profit and Loss of the profit of the company for the year ended on that date, and

c) In the case of Cash Flow Statement, of the cash flow of the company for the year ended on that date.

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, 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 Balance Sheet, the Statement of Profit and Loss and the 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.

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

Re: Rungta Irrigation Limited

[Refer to 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) As explained to us, the fixed assets have been physically verified by the management during the year in phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

2. (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

3. (a) The company has given unsecured advances to Ramgarh Sponge Iron Pvt. Ltd. which is covered under section 301 of the Companies Act, 1956.During the said year company has also taken unsecured advances from the said company and transactions thereof are duly recorded in the register maintained for this purpose. At the end of the year, the net amount of Rs. 243 lacs stands payable by the company under audit. As per explanation given to us all the above transactions have been made in the normal course of business and are prima facie not prejudicial to the interest of the company.

(b) In our opinion the terms and conditions on which advances were given or taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(c) According to information and explanations given to us no interest is charged or given on the above transactions.

4. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuous failure to correct major weakness in internal control.

5. (a). In our opinion and according to 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.

(b) In our opinion and according to the information and explanation given to us the transaction made in pursuance of the aforesaid contracts or arrangement in respect of each party made during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956.

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

8. We have broadly reviewed the records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act 1956, and are of the opinion that prima facie the records have been maintained. We have however, not made a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, the company has generally been regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund except the unpaid dividend of Rs. 9.89 Lac ( Previous year Rs. 9.89 lac) held in abeyance due to pending legal cases, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it.

According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March'' 31.2013 for a period of more than six months from the date they became payable except the dues of unpaid Dividend of Rs. 9.89 Lacs (Previous year Rs. 9.89 lacs) which is held in abeyance due to pending legal cases.

(b) According to the information given by the company and its record, the following are the details of dues outstanding as on 31.03.2013 on account of disputed cases in respect of Sales Tax, Excise Duty, Income Tax, Custom Tax, Wealth Tax, Cess and Service Tax:

Forum where dispute Amount S. No. Name of Statute Nature of dues is pending (Rs. in Lac)

Central Sales Tax Act central sales High Court Trade 2.00 and Sales Tax/VAT Tax and sales Tax Tribunal 2.34 Acts of various States various States JC/DC (Appeal) 8 41

Commissioner,

2 Central Excise Act. Service Tax Appeals 1.52

10. The Company does not have accumulated losses and the Company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. The company has paid the CRPS dues of IDBI Bank Ltd in full as agreed by the bank under one time settlement, before the date of our audit report. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the company has not defaulted in re payment of dues to Bank or Financial Institutions or Debenture Holders.

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.

13. The company is not a chit fund or a Nidhi /Mutual benefit fund/Society, therefore clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. In our opinion and according to the information and explanation to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation to us, the company has not given any guarantee for loans taken by others from any Bank or Financial Institutions.

16. According to the records of the company, the term loans obtained by the company have been applied for the purpose for which it is obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that no funds raised on short-term basis have been utilized generally for long term investment.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture during the year.

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For ANDROS & CO.

CHARTERED ACCOUNTANTS

REGN.No- 0G8976N

PLACE: DELHI

DATED: 09.08.2013 Sd/-

(BRIJ BHUSHAN GARG)

PARTNER

M. NO. 84865

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Rungta Irrigation Limited, as at March 31st, 2012 and the Statement of Profit & Loss of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides as reasonable basis for our opinion.

3. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure, a statement of the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure reported to in paragraph (3) above and subject to:

Note No 26(7) in respect of investment in the capital of partnership firms where the annual accounts of the Firms are not available hence the balances are not confirmed and in absence of profit and loss account of these firms, its impact on the profit of the Company could not be ascertained.

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 appears from our examination of such books.

iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

v. On the basis of written representation received from the Directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31st, 2012 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

vi. 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 true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the company as at March 31st, 2012.

b. In the case of Statement of Profit & Loss of Company, of the profit for the year ended on that date, and.

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

ANNEXURE TO THE AUDITOR''S REPORT

[Refer to 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) As explained to us, the fixed assets have been physically verified by the management during the year in phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

2. (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

3. (a) The company had granted unsecured loans to Rungta Projects Limited in the preceding years and the outstanding amount of Rs.290.34 Lac remains due as on the date of Balance sheet(Previous year Rs.290.34 Lac) which is covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanation given to us, the original rate of interest and other terms and conditions were not, prima facie, prejudicial to the interest of the company. However, no interest is being charged on the loan from October'' 2009 due to recall of loan.

(c) According to the information and explanation given to us the Company has recalled the loan but neither interest nor principal has been received.

(d) According to the information and explanation given to us the Company has issued legal notice for recovery of the interest and principal.

(e) The Company has not taken unsecured loans from parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuous failure to correct major weakness in internal control.

5. (a) In our opinion and according to 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.

(b) In our opinion and according to the information and explanation given to us the transaction made in pursuance of the aforesaid contracts or arrangement in respect of each party made during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956.

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

8. According to the information and explanations provided to us, the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act 1956 have become applicable to the Company during the current year. We have broadly reviewed the records maintained by the Company under the said rules and are of the opinion that prima facie the records have been maintained. We have however, not made a detailed examination of such records with a view to determine whether they are accurate or complete

9. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund except the unpaid dividend of Rs. 9.89 Lac ( Previous year Rs. 9.89 lac) held in abeyance due to pending legal cases, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it.

According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March'' 31.2012 for a period of more than six moths from the date they became payable except the dues of unpaid Dividend of Rs. 9.89 Lacs ( Previous year Rs. 9.89 lacs) which is held in abeyance due to pending legal cases.

(b) According to the information given by the company and its record, there are no dues outstanding as on 31.03.2012 in respect of Sales Tax, Excise Duty, Income Tax, Custom Tax, Wealth Tax, Cess and Service Tax except the following disputed cases.

S. No. Name of Statute Nature of dues Forum where Amount dispute is pending (Rs. In Lacs)

1. Central Sales Tax Act and Central Sales Tax High Court Trade 2.00 Sales Tax/VAT Acts of and Sales Tax/VAT Tax Tribunal JC/DC 2.34 various States of Various States (Appeal) 8.41

2. Central Excise Act, Service Tax Commissioner, Appeals 1.52

10. The Company does not have accumulated losses and the Company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to Bank or Financial Institutions or Debenture Holders other than the following dues: Payment of the Cumulative Redeemable Preference Shares subscribed by IDBI Bank Ltd for Rs.334 Lac is due since Nov.2005 on maturity and Dividend etc thereon till date.

However, the management has explained that the payments of Redeemable Preference Shares was not made on due date to IDBI Bank Limited due to Non co-operation at their end. The Company has again requested offering to IDBI Bank Limited for the settlement of dues vide Company''s letter dated 16.03.2011.

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.

13. The company is not a chit fund or a Nidhi /Mutual benefit fund/Society, therefore clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. In our opinion and according to the information and explanation to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation to us, the company has not given any guarantee for loans taken by others from any Bank or Financial Institutions.

16. According to the records of the company, the term loans obtained by the company have been applied for the purpose for which it is obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that no funds raised on short-term basis have been utilized generally for long term investment.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture during the year.

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

AUDITOR''S REPORT

AS PER REPORT OF EVEN DATE ANNEXED

For ANDROS & CO.

CHARTERED ACCOUNTANTS

REGN.NO-008976N

Sd/-

PLACE : DELHI (BRIJ BHUSHAN GARG)

DATED : 30th July 2012 PARTNER

M. No. 84865

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Rungta Irrigation Limited, as at March 31,2011 and the Profit & Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides as reasonable basis for our opinion.

3. 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, we enclose in the annexure, a statement of the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure reported to in paragraph (3) above and subject to:

Note 6b on Schedule 'S' in respect of investment in the capital of partnership firms where the annual accounts of the Firms are not available hence the balances are not confirmed and in absence of profit and loss account of these firms, its impact on the profit of the Company could not be ascertained.

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 appears from our examination of such books.

iii. The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

iv. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

v. On the basis of written representation received from the Directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31,2011 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

vi. 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 true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the company as at March 31, 2011.

b. In the case of Profit & Loss Account of Company, of the profit for the year ended on that date, and.

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

ANNEXURE TO THE AUDITOR'S REPORT

Re: Rungta Irrigation Limited

[Refer to 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) As explained to us, the fixed assets have been physically verified by the management during the year in phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

2. (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

3. (a) The company has granted unsecured loans in the preceding years to Rungta Projects Limited having outstanding of Rs. 290.34 Lacs as on the date of balance sheet (maximum outstanding during the year) which is covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanation given to us, the original rate of interest and other terms and conditions were not, prima facie, prejudicial to the interest of the company. However, no interest is being charged on the loan from October' 2009 due to recall of loan.

(c) According to the information and explanation given to us the Company has recalled the loan but neither interest nor principal has been received.

(d) According to the information and explanation given to us the Company has issued legal notice for recovery of the interest and principal.

(e) The Company has not taken any unsecured loans during the year, from parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuous failure to correct major weakness in internal control.

5. (a) In our opinion and according to 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.

(b) In our opinion and according to the information and explanation given to us the transaction made in pursuance of the aforesaid contracts or arrangement in respect of each party made during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956.

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

8. In our opinion and according to the information and explanation given to us the Central Government has not prescribed for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund except the unpaid dividend of Rs. 9.89 Lacs (Previous year Rs. 9.89 lacs) held in abeyance due to pending legal cases, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Chess and other statutory dues applicable to it.

According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March' 31.2011 for a period of more than six moths from the date they became payable except the dues of unpaid Dividend of Rs. 9.89 Lacs ( Previous year Rs. 9.89 lacs) which is held in abeyance due to pending legal cases.

(b) According to the information given by the company and its record, there are no dues outstanding as on 31.03.2011 in respect of Sales Tax, Excise Duty, Income Tax, Custom Tax, Wealth Tax, Cess and Service Tax except the following disputed cases.

S. No. Name of Statute Nature of dues Forum where Amount

dispute is pending (Rs.In Lacs)

1. Central Sales Tax Act and Central Sales Tax High Court Trade 2.00 Sales Tax/VAT Acts of and Sales Tax/ VAT of Varios Tax Tribunal JC/ DC 2.34 various States States (Appeal) 8.41

2. Central Excise Act, Service Tax Commissioner,

Appeals 1.52

10. The Company does not have accumulated losses and the Company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to Bank or Financial Institutions other than the following dues:

The Company has not redeemed the Cumulative Redeemable Preference Shares subscribed by IDBI Bank Ltd. on its due dates as mentioned in schedule A of the Balance Sheet. The half yearly installments due for redemption, as per revised schedule, since Nov-05 are in default and total default in redemption of CRPS is Rs. 334.00 Lacs. Further, the Company has not declared and paid dividend on preference shares for about six and half years and the arrear of cumulative dividend is not provided at the revised rate of 7.50%.

There are no dues to debenture holders.

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.

13. The company is not a chit fund or a nidhi /mutual benefit fund/society, therefore clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the company.

14. In our opinion and according to the information and explanation to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation to us, the company has not given any guarantee for loans taken by others from any Bank or Financial Institutions.

16. According to the records of the company, the term loans obtained by the company have been applied for the purpose for which it is obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that no funds raised on short-term basis have been utilized generally for long term investment.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture during the year.

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For ANDROS & CO. CHARTERED ACCOUNTANTS

Sd/- PLACE: DELHI (BRIJ BHUSHAN GARG)

PARTNER Date : 2nd August 2011 M. No. 84865

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Rungta Irrigation Limited, as at March 31, 2010 and the Profit & 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.

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 misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure, a statement of the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure reported to in paragraph (3) above and subject to:

Note 6b on Schedule S in respect of investment in the capital of partnership firms where the annual accounts of the Firms are not available hence the balances are not confirmed and in absence of profit and loss account of these firms, its impact on the profit of the Company could not be ascertained.

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 appears from our examination of such books.

iii. The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

iv. In our opinion, the Balance Sheet, Profit & Loss account and Cash Row Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

v. On the basis of written representation received from the Directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 2010 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act, 1956;

vi. 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 true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of Balance Sheet, of the state of affairs of the company as at March 31, 2010,

b. in the case of Profit & Loss Account of the Company, of the profit for the year ended on that date, and

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

ANNEXURE TO THE AUDITORS REPORT

Re: Rungta Irrigation Limited

[Refer to 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) As explained to us, the fixed assets have been physically verified by the management during the year in phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

2. (a) As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in books of account.

3. (a) The company has granted unsecured loans to one party involving the amount of Rs. 297.28 lacs (maximum outstanding during the year) covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanation given to us, the original rate of interest and other terms and conditions were not, prima facie, prejudicial to the interest of the company, however no interest is being charged on the loan from October 2009 due to recall of loan.

(c) According to the information and explanation given to us the Company has recalled the loan but neither interest nor principal received.

(d) According to the information and explanation given to us the Company has issued legal notice for recovery of the interest and principal.

(e) The Company has taken unsecured loans from six parties involving the amount of Rs. 428.73 lacs (maximum outstanding during the year) covered in the register maintained under section 301 of the Companies Act, 1956.

(f) In our opinion and according to the information and explanation given to us, the interest rate and other terms and conditions of the unsecured loans taken by the Company are not, prima facie, prejudicial to the interest of the company.

(g) According to the information and explanation given to us the terms regarding repayment is not stipulated and the loan is interest free.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not deserved any continuous failure to correct major weakness in internal control.

5. (a) In our opinion and according to information and explanation given to us the transactions made in pursuance of contracts or arrangement in respect be entered in 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 explanation given to us the transaction made in pursuance to aforesaid contracts or arrangement in respect of each party made during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time

6. In our opinion and according to the information and exptanati Company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956.

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

8. In our opinion and according to the information and explanation given to us the Central Government has not prescribed for the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

9. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund except the unpaid dividend of Rs. 9.89 lakhs held in abeyance due to pending legal cases/ Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it According to the information and explanation given to us no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2010 for a period of more than six months from the date they became payable except the dues of Investor Education and Protection Fund of Rs. 9.89 lakhs which is held in abeyance due to pending legal cases.

(b) According to the information given by the Company and its record there are no dues outstanding of sales-tax, excise duty, income-tax, customs tax, wealth- tax, cess and service tax which have not been deposited on account of any dispute, other than the following:

S.No. Name of Statute Nature of dues

1. Central Sales Tax Act Central Sales Tax and Sales Tax Acts and Sales Tax of of various States various States

2. Central Excise Act Service Tax

S.No. Name of Statute Forum where dispute Amount is pending (Rs. In lacs)

1. Central Sales Tax Act High Court 2.54 and Sales Tax Acts Trade Tax Tribunal 1.06 of various States JC/ DC (Appeal) 6.04

2. Central Excise Act Commissioner 1.52 Appeals

10. The Company does not have accumulated losses and the company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to Bank or Financial Institution other than the following dues:

The Company has not redeemed the Cumulative Redeemable Preference Shares subscribed by IDBI Bank Ltd. on its due dates as mentioned in Schedule A of the Balance Sheet. The half yearly instalments due for redemption, as per revised schedule, since Nov-05 are in default and total default in redemption of CRPS is Rs. 334.00 Lacs. Further the Company has not declared and paid dividend on preference shares for about five and half years and the arrear of cumulative dividend calculated at the revised rate of 7.50% is Rs. 135.80 Lacs. The actual outstanding may be higher considering non payment of dues as per revised schedule.

There are no dues to debenture holders.

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.

13. The Company is not a chit fund or a nidhi/ mutual benefit fund/ society, therefore clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

14. In our opinion and according to the information and explanation to us, the Company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation to us, the company has not given any guarantee for loans taken by others from Bank or financial institution

16. According to the records of the Company, the term loans obtained by the Company have been applied for the purpose for which it is obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion the no funds raised on short-term basis have been utilised for long term investment.

18. In our opinion and according to the information and explanations given to us, 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.

19. The Company has not issued any debenture during the year.

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For K. Kedia & Co. Chartered Accountants Firm Registration No. 010555C

Place : New Delhi Date : 28th Aug, 2010 Sd/- Kamlesh Kedia Partner Membership No. 073987