Auditor Report of Elango Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of ELANGO INDUSTRIES LIMITED w ich comprise the balance sheet as at March 31, 2015, the statement of profit and loss and the cash ow s a ement or 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 °f directors is responsible for the preparation of these standalone financial statements that give a true and fair view of financial position, financial performance and cash flows of he company m accordance with the accounting principles generally accepted In India, including the rules 2014. This responsibility SPe Under SeCti°n 133 °f the Act, read with rule 7 °f 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 making °ther irregularities; selecti°n and application of appropriate accounting policies; making judgements and estimates that are responsible 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 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 the ACt the accounting and editing standards and 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) the audit to standards require that We comply with ethical requirements and plan and perform misstatment reasonable assurance the finanCial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidences-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, 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 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 so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTER PARAGRAPH

We draw attention to Note S to the Financial Statements which indicates relating to revival of business activity by the management of the company.

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 (11) of section 143 of the Companies Act, 2013, 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 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 arrangement 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 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 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 does not have any pending litigations which would impact its financial position;

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

iii. There were no amounts which were required to be transferred to the investor Education and Protection Fund by the Company.

Annexure to the Auditor's Report

The Annexure referred to in our report to the members of Elango Industries Limited for the year ended 31st March 2015. We report that:

[i] The company does not have any Fixed Assets in the financial statement as on 31st March 2015. Hence said clause are not applicable.

[ii] As the Company does not possess any Inventories during this year, the provisions of paragraph 3 (ii) of the Companies (Auditor's Report) Order, 2015.are not applicable.

[iii] In our opinion, no loans that has been taken from / granted to Companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013, hence the provisions of paragraph 3 (iii) of the Companies (Auditor's Report) Order, 2015.are not applicable.

[iv] In our opinion and according to the information and explanations given to us, there are adequate interna! control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of goods, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

[v] The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

[vi] As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act

[vii] (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India; .

(b) According to the information and explanations given to us and based on the records of the Company examined by us, there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

[viii] The Company has incurred cash losses during the financial year covered by our audit and in preceding financial years. ¦

(IX) According to the records of the Company examined by us and as per the information and explanations given to us, the company has not availed of any loans from any financial institutions or banks and has not issued debentures.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank of financial institution during the year.

(xi) in our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the year.

(xii) 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 V.SENTHILNATHAN &Co., Chartered Accountants I CAI No.0037115

(V. SENTHILINATHAN) Partner M.No:024244

Place: Chennai Date: 28.05,2015

---

Mar 31, 2014

We have audited the accompanying financial statements of ELANGO INDUSTRIES LIMITED, which comprises the balance sheet as at 31st March 2014, the statement of profit and loss and Cash Flow Statement of the company for the year the ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the company in accordance with the Accounting Standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956 . This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the finan-cial 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 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 reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risk of material misstatement of financial statements, whether due to fraud or error, in making those risk assessments, the auditor considers internal control relevant to the 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 over all presentation of 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 given the information required by the Act in the manner so required given a true and fair view in conformity with the accounting principles generally accepted in india.

I. In the case of the balance sheet, of the state of affairs of the company as at 31st March 2014; and

II. In the case of the statement of profit and loss, of the Loss for the year ended on that date.

III. In case of Cash Flow Statement for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Audit Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section 227 of the Act, we give in the Annexure a statement of the matters specified in Paragraphs 4 and 5 of the Act.

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 dealt with by this Report are in agreement with the books of accounts; and

d) In our opinion, the balance sheet, and statement of profit and loss comply with the accounting standards referred to in subsection (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, 2014, from being appointed as a director in terms of clause (g) of Sub Section(1) of Section 274 of the Companies Act, 1956

Annexure to the Auditor''s Report

The Annexure referred to in our report to the members of Elango Industries Limited for the year ended 31st March 2014. We report that:

[ i ] [a] The Company has maintained proper records showing full particulars including quantitative details of its fixed assets.

[bl All the assets have not been physically verified by the management during the year but there is a regular programme of verification 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] During the year there was no disposal of fixed assets by the Company. [ii] As the Company does not possess any Inventories during this year, the provisions of clause 4(ii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[iii] In our opinion, no loans that has been taken from / granted to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 is not, prima facie, prejudicial to the interest of the Company.

[iv] 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 purchases of goods, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls,

[v] According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

[vi] In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public under the provisions of sections 58(A) and 58(AA) of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 (as per our report).

[vii] In our opinion, the Company has an in-house internal audit system commensurate with the size and nature of its business.

[viii] As the company discountinued the Manufacturing of steel ingots way back in the year 2003 and no commercial activities are carried out during the financial year other than divident income, accordingly, the clause viii of the order relating to maintenance of cost records are not applicable to the company.

[ix] (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, custom duly, excise duty, cess and other material statutory dues applicable to it except sales tax.

(b) According to the information and explanation given to us, the undisputed amount payable in respect of sales tax arrears for a period of more than six months from the date they became payable is Rs.85,454/- (Previous Year Rs.85,454/-).

(c) On the basis of our examination of the documents and records of the Company and the information and explanations given to us upon our enquiries in this regards, disputed amounts payable in respect of income-tax not deposited with the appropriate authorities is Rs.27,59,978/- (Previous Year Rs.27,59,978/).

[x] The Company has incurred cash losses during the financial year covered by our audit and not incurred cash loss immediately preceding financial year.

[xi] In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institutions, bank or debenture holders. Hence, the provisions of clause 4(xi) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xii] We are of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year under consideration. Accordingly the provisions of clause 4(xii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xiii] In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

[xiv] In our opinion, the Company is not dealing in or trading in Shares, Securities, Debentures and other Investments. Accordingly the provisions of Clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

[xv] According to the information given to us, we are of the opinion that the Company has not given any guarantee for loans taken by an associate Company. Hence the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xvi] In our opinion, no term loan has been availed by the Company. Hence the provisions of clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xvii] As we were not able to establish any audit trail of fund flows which can correlate end use with corresponding funds raised, according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, wo report that no funds raised on short term in nature have been used for long term investment and vice versa.

[xviii] According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act, Hence the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xix] According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures. Hence the provision of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xx] During the period covered by our audit report, the Company has not raised any money through public issue. Hence, the provisions of Clause 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

[xxi] 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 V.SENTHILNATHAN & Co., Chartered Accountants ICAI F.NO.: 03711S

Place : Chennai (V. Senthilnathan) Date: 16.05.2014 Partner M.No:024244

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/S. ELANGO INDUSTRIES LIMITED, No.5, RANGANATHAN GARDENS, ANNA NAGAR, CHENNAI -600 040, as at 31st March 2012 and the Profit and Loss Account 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub - section (4A) of section 227 of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 the said order.

4. Further to our comments in the Annexure referred to above, we report that;

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(Mi) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account of the company.

(iv) 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 referred to in sub - section (3C) of section 211 of the Companies Act, 1956, to the extent applicable.

(v) On the basis of written representations received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub - section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the.best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012; and

b) In the case of the statement of Profit and Loss of the profit/loss for the year ended on that date: and

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

ANNEXURE

M/S. ELANGO INDUSTRIES LIMITED

Referred to in paragraph 3 of our report of even date.

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification 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) During the year there was no disposal of fixed assets by the Company.

(ii) As the Company does not possess any Inventories during this year, the provisions of clause 4 (ii) of the Companies (Auditors Report) Order, 2003 are not applicable.

(iii) In our opinion, no loans that has been taken from / granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 is not, prima facie, prejudicial to the interest of the Company.

(iv) 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 purchases of goods, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Clause 4(v) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public under the provisions of sections 58(A) and 58(AA) of the Companies Act, 1956 and the Companies ( Acceptance of Deposits) Rules, 1975 (as per our report).

(vii) In our opinion, the company has an in-house internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the Company's products to which the said rules are made applicable, and are of the opinion that prima facie prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, custom duty, excise duty, cess and other material statutory dues applicable to it except sales tax.

(b) According to the information and explanation given to us, the undisputed amount payable in respect of sales tax arrears for the period of more than six months from the date they became payable is Rs.85,454/- (Previous Year Rs. 85454/-).

(c) On the basis of our examination of the documents and records of the company and the information and explanations given to us upon our enquiries in this regards, disputed amounts payable in respect of income-tax not deposited with the appropriate authorities is Rs.27,59,978/-(Previous Year Rs.27,59,978/-).

(X) The Company has incurred cash losses during the financial year covered by our audit and not incurred cash losses immediately preceding financial year.

(XI) In our opinion and according to the information and explanations given to us , the company has not defaulted in repayment of dues to a financial institutions , bank or debenture holders. Hence, the provisions of clause 4(xi) of the Companies (Auditors Report) Order, 2003 are not applicable.

(XII) We are of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year under consideration. Accordingly the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are applicable.

(XIII) In our opinion, the Company is not a chit fund or a nidhi / mutural benefit fund / Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

(XIV) In our opinion, the Company is not dealing in or trading in Shares, Securities, Debentures and other Investments. Accordingly the provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(XV) According to the information given to us, we are of the opinion that the Company has not given any guarantee for loans taken by an associate Company. Hence the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable.

(XVI) In our opinion, no term loan has been availed by the Company. Hence the provisions of clause 4(xvi) of the Companies (Auditors Report) Order 2003 are not applicable.

(XVII) As we were not able to establish any audit trail of fund flows which can correlate end use with corresponding funds raised, according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term in nature have been used for long term investment and vice versa.

(XVIII) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties.and Companies covered in the register maintained under section 301 of the Act. Hence the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable.

(XIX) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures. Hence the provision of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable.

(XX) During the period covered by our audit report, the Company has not raised any money through public issue. Hence, the provisions of Clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(XXI) 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 V. SENTHILNATHAN & Co.,

Chartered Accountants

ICAI F.NO: 003711S



(V.SENTHILNATHAN)

Partner

M. NO: 024244

Place : CHENNAI.

Date : September 4. 2012.

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/S. ELANGO INDUSTRIES LIMITED, No.5, RANGANATHAN GARDENS, ANNA NAGAR, CHENNAI -600 040, as at 31st March 2010 and the Profit and Loss Account 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements 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 sub - section (4A) of section 227 of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 the said Order.

4. Further to our comments in the Annexure referred to above, we report that;

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(iii)The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account of the Company.

(iv)ln our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub - section (3C) of section 211 of the Companies Act, 1956, to the extent applicable.

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

(vi)ln our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; and

b) In the case of the Profit and Loss Account, of the profit/loss for the year ended on that date: and

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

ANNEXURE M/S. ELANGO INDUSTRIES LIMITED Referred to in paragraph 3 of our report of even date.

[i] [a] The Company has maintained proper records showing full particulars including quantitative details of its fixed assets.

[b] All the assets have not been physically verified by the management during the year but there is a regular programme of verification 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] During the year there was no disposal of fixed assets by the Company.

[ii] As the Company does not possess any Inventories during this year, the provisions of clause 4(ii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[iii] In our opinion, no loans that has been taken from / granted to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 is not, prima facie, prejudicial to the interest of the Company

[iv] 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 purchases of goods, fixed assets and with regard to the sale of goods and services, during the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

[v] According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

[vi] In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public under the provisions of sections 58(A) and 58(AA) of the Companies Act, 1956 and the Companies ( Acceptance of Deposits) Rules, 1975 (as per our report).

[vii] In our opinion, the Company has an in-house internal audit system commensurate with the size and nature of its business.

[viii] We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the central government for the maintenance of cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable, and are of the opinion that prima facie prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

[ix] (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, custom duty, excise duty, cess and other material statutory dues applicable to it except sales tax.

(b) According to the information and explanation given to us, the undisputed amount payable in respect of sales tax arrears for a period of more than six months from the date they became payable is Rs.85, 454/- (Previous Year Rs.85,454/-).

(c) On the basis of our examination of the documents and records of the Company and the information and explanations given to us upon our enquiries in this regards, disputed amounts payable in respect of income-tax not deposited with the appropriate authorities is Rs.27,59,978/- (Previous Year Rs.27,59,978/-).

[x] The Company has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

[xi] In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institutions, bank or .debenture holders. Hence, the provisions of clause 4(xi) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xii] We are of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year under consideration. Accordingly the provisions of clause 4(xii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xiii] In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

[xiv] In our opinion, the Company is not dealing in or trading in Shares, Securities, Debentures and other Investments. Accordingly the provisions of Clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

[xv] According to the information given to us, we are of the opinion that the Company has not given any guarantee for loans taken by an associate Company. Hence the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xvi] In our opinion, no term loan has been availed by the Company. Hence the provisions of clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xvii] As we were not able to establish any audit trail of fund flows which can correlate end use with corresponding funds raised, according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term in nature have been used for long term investment and vice versa.

[xviii] According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act. Hence the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xix] According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures. Hence the provision of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable.

[xx] During the period covered by our audit report, the Company has not raised any money through public issue. Hence, the provisions of Clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi] 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 V. SENTHILNATHAN & Co.,

Chartered Accountants

ICAI/F.No. 003711S

(V.SENTHILNATHAN)

Partner

M.No.24244

Place: CHENNAI-40.

Date: 23rd July, 2010.