Auditor Report of Integrated Industries Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Integrated Technologies Ltd. ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

Emphasis of Matter

We draw attention:

(a) That no provision has been made in respect of disputed Custom & Central Excise duty of Rs. 66.533 million which has been shown as a contingent liability (refer note no. 17 (II) (3) read with note no 17 (II)(1)(a);

(b) That no provision has been made in respect of a sum of Rs. 8.423 million payable to HARTRON (Haryana State Electronic Development Corporation) with interest @ 9% p.a. w.e.f. 1.11.2000 which has been shown as a contingent liability (refer note no. 17 (II) (5) read with note no 17 (II)(1)(d);

(c) Write back of Rs. 25,248,041.43 payable to M/s Pronet Systems being considered not payable (refer note no. 12).

(d) Write off of raw materials of Rs. 1,045,114.29 since found obsolete/unusable (refer note no. 13).

(e) Write off of finished goods of Rs. 70,175.00 since destroyed and work in progress of Rs. 26,244,062.36 scrapped and valued at Rs. 799,820.00. (refer note no. 14).

(f) Amount recoverable in respect of Cenvet Credit and input VA T charged to revenue (refer to note . 16) Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

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

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 1 under heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the accounts for the year ended 31st March 2014)

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

(b) The fixed assets of the company have been physically verified by the management at the end of the year and no material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year.

ii) (a) Inventories have been physically verified by the management during the year.

(b) In our opinion and according to information and explanations given to us the procedures followed for physical verification is reasonable considering the size and nature of the business.

(c) In our opinion and according to information and explanations given to us, the company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material and have been properly dealt with in the books of accounts.

iii) (a) According to information and explanations given to us, the company has not granted secured or unsecured Loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore clause (a) to (d) of para 4(iii) will not be applicable to the Company.

(b) The company has taken unsecured loans from four parties covered in the register maintained under section 301 for the Companies Act, 1956. The yearend balance was Rs. 43,623,871/- and maximum amount due at any time during the year was Rs. 60,545,557/-.

(c) These loans are interest free and no repayment period is stipulated as informed to us. In our opinion, other terms and conditions are not 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 business with regard to purchase of inventory and fixed assets and for the sale of goods and services.

v) In respect of transaction covered under section 301 of the Companies Act, 1956:

a) According to the information and explanations given to us, we are of the opinion that transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, each of these transactions made in pursuance of contracts or arrangement entered in the register maintained u/s 301 of Companies Act, 1956, and aggregating during the year to Rs. 500,000 or more, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, material or services.

vi) According to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956.

vii) In our opinion, the company has its own internal audit system commensurate with the size and nature of its business and needs improvement.

viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the company. ix) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee''s state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise duty, cess and other material undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they become payable except income tax dues of Rs. 2,000,000 for assessment years 1995-96 to 1997-98.

(b) The disputed outstanding statutory dues are as under as per information and explanations given to us and records provided for our examination:

Name of Nature of dues Amount (Rs) Period to which Statue the amount relates

The Central Excise & Custom duty fore 1995-96 to 2010-11 Excise gone on the imported/ 6,65,33,319 Act,1944 indigenous raw materials & capital goods

Income Tax U/s 143(3) 17,62,756 AY 1998-99 Act,1961

Income Tax Interest 19,32,005 AY 1995-96 to Act 1961 1997-98



Name of Statute Forum where dispute is pending

The Central Excise Act,1944 Commissioner of Central Excise, Gurgaon

Income Tax Act,1961 ITAT

Income Tax Act,1961 CBDT

x) The accumulated losses of the company are more than fifty percent of its net worth as at the end of the financial year. The company has incurred cash losses of Rs. 2,161,044/- during the year ended 31st March 2014. However, there were cash losses in the 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 institution or bank.

xii) According to information and explanations given to us, and based on the documents and records produced before us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to information and explanations given to us, the natures of activities of the company do not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiv) According to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) According to information and explanations given to us, the company has not given any guarantee for loan taken by others from bank or financial institution[[

xvi) According to information and explanations given to us, no term loans have been raised by the company during the year.

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

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xiv) The company does not have any outstanding debentures during the year.

xv) The company has not raised any money through a public issue during the year.

xvi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period covered by our audit.



For S. K. Mittal & Co Chartered Accountants FRN No. 001135N

Krishan Sarup Place :New Delhi Partner Dated:30-05-2014 M.No. 010633

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Mar 31, 2012

We have audited the attached Balance Sheet of INTEGRATED TECHNOLOGIES LIMITED as at 31st March 2012 and also the Profit and Loss Account and the cash flow statement 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.

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

As required by the Companies (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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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 purposes 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;

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

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

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 explanation given to us, the said accounts read with other note no. 4 regarding show cause notice of Excise for deposit of Rs 665.33 lacs considered as contingent liability, other note no. 6 regarding Arbitral award by arbitrator directing the company to deposit Rs 84.23 lacs along with interest @ 9% p.a. from 1st November 2000 till the date of payment to Haryana State Electronic Development Corporation which is considered as contingent liability, and other note no. 7 regarding receipt of Rs. 450 lacs towards sale of land and building considered an advance pending execution of sale deed and handing over the possession and other notes appearing in Schedule of other notes no. 17(II) 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 Balance Sheet, of the state of affairs of the Company as at 31st March 2012, and

b) In the case of the Profit & loss Account, of the loss for the year ended on that date.

c) In the case of cash flow statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to our report of even date on the accounts for the year ended 31st March 2012)

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

(b) The fixed assets of the company have been physically verified by the management at the end of the year and no material discrepancies were noticed on such verification.

(c) In our opinion and according to explanations given to us, during the year, the company has not disposed of any fixed assets.

ii) (a) Inventories have been physically verified by the management during the year

(b) In our opinion and according and explanation given to us the procedures followed for physical verification is reasonable considering the size and nature of the business.

(c) In our opinion and according to information and explanations given to us, the company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material and dealt in accounts.

iii) (a) According to information and explanations given to us, the company has not granted secured or unsecured Loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956,. Therefore clause clause (a) to (d) of para 4(iii) will not be applicable to the Company.

(b) The company has taken unsecured loans covered in the register maintained under section 301 for the Companies Act, 1956. The year end balance was Rs 3,56,69,646.53 and maximum amount due at any time during the year was Rs3,60,21,396.53.

(c) These loans are interest free and no repayment period is stipulated as informed to us. In our opinion other terms and conditions are not prejudicial to the interest of the company.

(d) Secured loan of Rs 3,25,00,000 outstanding at beginning of the year has been paid in full during 2011-12.

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 business with regard to purchase of inventory and fixed assets and for the sale of goods and services.

v) In respect of transaction covered under section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, each of these transactions made in pursuance of contracts or arrangement entered in the register maintained u/s 301 of Companies Act, 1956, and aggregating during the year to Rs. 5,00,000/- or more, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, material or services.

vi) According to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956.

vii) In our opinion, the company has its own internal audit system commensurate with the size and nature of its business and needs improvement.

viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the company.

ix) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee''s state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise duty, cess and other material statutory dues and other undisputed statutory dues were outstanding, at the year end, for a period of more than six from the date they become payable except income tax dues of Rs 20,00,000 for assessment years 1995-96 to 1997-98.

(b) The disputed outstanding statutory dues are as under as per information and explanations given to us and records provided for our examination:

Name of Nature of dues Amount (Rs) Period to which the Forum where dispute is Statue amount relates pending

The Central Excise & custom duty foregone 1995-96 to 2010-11 Commissioner of Central Excise on the imported/ indigenous 6,65,33,319 Excise, Gurgaon Act,1944 raw materials & capital goods

Income Tax U/s 143(3) 17,62,756 AY 1998-99 ITAT Act,1961

Income Tax Interest 19,32,005 AY 1995-96 to 1997-98 CBDT Act,1961

ii) The accumulated losses of the company are more than fifty percent of its net worth as at the end of the financial year. Further, the company has incurred cash losses during the year ended 31st March 2012 and in the immediately preceding financial year.

iii) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

iv) According to information and explanations given to us, and based on the documents and records produced before us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

v) In our opinion and according to information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

vi) According to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

vii) According to information and explanations given to us, the company has not given any guarantee for loan taken by others from bank or financial institution.

viii) According to information and explanations given to us, no term loans have been raised by the company during the year.

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

x) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xi) The company did not have any outstanding debentures during the year.

xii) The company has not raised any money through a public issue during the year.

xiii) According to the best of our information and knowledge and belief and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the period covered by our audit.

For S. K. Mittal & Co

Chartered Accountants

FRN No. 001135N

Krishan Sarup

Place:New Delhi Partner

Dated:29-06-2012 M.No. 010633

---

Mar 31, 2011

We have audited the attached Balance Sheet of INTEGRATED TECHNOLOGIES LIMITED as at 31st March 2011 and also the Profit and Loss Account and the cash flow statement 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.

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

As required by the Companies (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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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 purposes 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;

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

iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; except creating a deferred tax asset in the books of account of Rs 474.96 laks till 2009-10 in spite of uncertainty of profits.(Refer Note no. 4 of schedule 13)

v) On the basis of written representations received from the directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 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 explanation given to us, the said accounts read with Note No 9 regarding show cause notice of Excise for deposit of Rs 620 laks considered as contingent liability, Note No. 10 regarding Arbitral award by arbitrator directing the company to deposit Rs 84.23 laks along with interest @ 9% p.a. from 1st November 2000 till the date of making the payment to Haryana State Electronic Development Corporation, which is considered as contingent liability, and other notes appearing Schedule 13, 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 Balance Sheet, of the state of affairs of the Company as at 31st March 2011, and b in the case of the Profit & loss Account, of the loss for the year ended on that date. c) in the case of cash flow statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to our report of even date on the accounts for the year ended 31st March 2011)

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

(b) The fixed assets of the Company have been physically verified by the management at the end of the year and no material discrepancies were noticed on such verification.

(c) In our opinion and according to explanations given to us, during the year, the Company has not disposed of any fixed assets.

ii) (a) Inventories have been physically verified by the management during the year

(b) In our opinion and according and explanation given to us the procedures followed for physical verification is reasonable considering the size and nature of the business.

(c) In our opinion and according to information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material and dealt in accounts.

iii) (a) According to information and explanations given to us, the company has not granted secured or unsecured Loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956,. Therefore clause clause (a) to (d) of para 4(iii) will not be applicable to the Company.

(b) The company has taken unsecured loans covered in the register maintained under section 301 for the Companies Act, 1956. The year end balance was Rs. 306,83,023.50/-

(c) As per our examination records of the company and explanation and information given to us no interest is provided on the above loans taken by the company. In our opinion other terms and conditions are not prejudicial to the interest of the company.

(d) As per the BIFR scheme so far as repayment of secured loan is concerned, the company the company is required to pay Rs 40 laks each year from the financial year 2008-2009 onwards. However till 31st March 2011 no payments has been made in this regard. For the repayment of unsecured loan no time has been fixed therefore this sub-clause is not applicable to the unsecured loan. However the entire secured loan has been repaid on 5th July 2011.

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 business with regard to purchase of inventory and fixed assets and for the sale of goods and services.

v) In respect of transaction covered under section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, each of these transactions made in pursuance of contracts or arrangement entered in the register maintained u/s 301 of Companies Act, 1956, and aggregating during the year to Rs. 5,00,000/- or more, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, material or services.

vi) According to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956.

vii) In our opinion, the Company has its own internal audit system commensurate with the size and the nature of its business & needs improvement.

viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues except the following which are outstanding as on 31.03.2011 for a period more than six months from the date they become payable are given below:

S.No Particulars Amount outstanding as on 31.03.2011 (Rs)

2. Income Tax 2,000,000.00

(b) As per the scheme of approved by BIFR, CBDT was to waive interest on income tax demand of Rs 19.32 laks. However the CBDT has rejected the request for the same, vide its order F.NO.2 (1625)DIT/BIFR2006-07/566 dated 04.06.2009. According to information and explanation provided to us, the company has yet to file a revision petition against the said order for the further consideration. In our opinion except this, there are no dues of income tax, sales tax, wealth tax service tax, custom duties and excise duty which has not been deposited on account of any dispute.

x) In our opinion the accumulated losses are more than 50 % of the Net Worth of the company. Further, the company has incurred cash loss during the year ended 31st March 2011 of Rs85.05 laks. The company has incurred cash loss of Rs82.91 laks in the immediately preceding financial year. Refer Note No 14 of schedule 13.

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 institution or bank.

xii) According to information and explanations given to us, and based on the documents and records produced before us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiv) According to information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi) According to information and explanations given to us, no term loans have been raised by the company during the year.

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

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

xix) The Company did not have any outstanding debentures during the year.

xx) The Company has not raised any money through a public issue during the year.

xxi) According to the best of our information and knowledge and belief and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the period covered by our audit.

For S. K. Mittal & Co

Chartered Accountants

FRN No. 001135N

S. K. Mittal

Place : New Delhi Partner

Dated : 01-09-2011 M.No. 08506

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Mar 31, 2010

We have audited the attached balance sheet of INTEGRATED TECHNOLOGIES LIMITED as at 31st March, 2010, the profit & loss account and the cash flow statement for the year ended on that date together with annexure thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

1. 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.

2. In our opinion, proper books of accounts as required by law have been kept by the Company, so far as it appears from our examination of the books.

3. The balance sheet, the profit & loss account and cash flow statement dealt with by this report are in agreement with the books of accounts.

4. In our opinion the profit and loss account, balance sheet and cash flow comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, 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.

6. In our opinion and to the best of our information and according to the explanations given to us, the said balance sheet and the profit and loss account read with the schedules and notes to the accounts thereto, give the information required by the Companies Act, 1956 in the manner so required and give the true and fair view in conformity with the accounting principles generally accepted in India:

-In the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010. and,

-In the case of the profit and loss account, of the profit for the year ended on that date.

-In the case of cash flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS’ REPORT

(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 and situation of fixed assets.

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

(c) From the examination of records we found that no substantial parts of fixed assets have been disposed off during the period.

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

(b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and the nature of business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on the verification between the physical stock and books records were not material.

(iii) (a) The Company has not granted any loan secured or unsecured to any Company, firm or other party covered in the register maintained under Section 301 of the Companies Act,

1956.Therefore clause (a) to (d) of para 4(iii) will not be applicable to the Company.

(b) The Company has taken secured loan from one Company and unsecured loan from five parties covered in the register maintained under Section 301 of the Companies Act, 1956. Maximum amount involved in case of secured loan is Rs.325.00 lakhs and in case of unsecured loan is Rs 240.84 lakhs during the year. The amount outstanding of secured and unsecured loan providers as on 31.03.2010 is Rs 325.00 lakhs and Rs 240.84 lakhs respectively.

(c) As per our examination of records of the Company and explanation and information given to us no interest is provided on the above loans taken by the Company. In our opinion other terms and conditions are not prejudicial to the interest of the Company.

(d) As per the BIFR scheme so far as repayment of secured loan is concerned, the Company is required to pay Rs 40 lakhs each year from the financial year 2008-2009 onwards. However till the completion of our audit no payment has been made in this regard. For the repayment of unsecured loan no time has been fixed therefore this sub-clause is not applicable to the unsecured loan.

(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 purchase of inventory, fixed assets and sale of goods. During the audit we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) In our opinion the transactions that needed to be entered into the register maintained u/s 301 of the Act, have been so entered.

(b) Transactions covered under Section 301 of the Companies Act have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from public, accordingly the provisions requiring that, whether the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Act and the rules framed thereunder, where applicable, have been complied with, is not applicable to the Company.

(vii) The Company has its own internal audit system commensurate with its size and nature of its business.

(viii) The provisions requiring maintenance of cost records as prescribed by the Central Government under Clause (d) of sub-section (1) of Section 209 of the Act, are not applicable to the Company.

(ix) (a) As per records of the Company, the Company is regular in depositing of undisputed statutory dues except the following which are outstanding as on 31.03.2010 for a period more than six month from the date they became payable are given below:

S.No Particulars Amount outstanding

as on 31.03.2010 (Rs)

1. Sales Tax 19,407.00

2. Income Tax 2,000,000.00



(b) As per the scheme approved by the BIFR, CBDT was to waive interest on income tax demandof Rs 19.32 lakhs. However the CBDT has rejected the request for the same, vide its order.No.2 (1625)/DIT /BIFR /2006-07 /566 dated 04.06.2009. According to information andexplanation given to us, the company has yet to file a revision petition against the said order forthe further consideration. In our opinion except this, there are no dues of Income Tax , salestax, wealth tax , service tax , custom duties and excise duty which has not been deposited on account of any dispute.

(x) In our opinion the accumulated losses are more than 50% of the Net worth of the Company.

Further, the Company has incurred cash loss during the year ended 31st March, 2010 of Rs.82.91 Lakhs. The Company has also incurred cash loss of Rs 60.07 lakhs in the immediately preceding financial year.

(xi) In our opinion the Company has not made any default in repayment of any dues to any bank or financial institutions. During the year the Company has not issued any debenture. (xii) The provisions requiring that, whether adequate documents and records are maintained, in cases where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities are not applicable to the Company.

(xiii) In our opinion, the Companyis not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4

(xiii) of the order are not applicable to the Company.

(xiv) In our opinion the Company is not dealing in or trading in shares, securities, debenture and otherinvestment. Accordingly the provisions of clause 4(xiv) of the order are not applicable to the Company.

(xv) The Company has not given anyguarantee for loans taken by others from bank or financial institutions hence the provisions requiring whether the terms and conditions whereof are prejudicial to the interest of the Company, are not applicable to the Company.

(xvi) The Company has not taken an term loan, therefore the provisions requiring that, whether term loans were applied for the purpose for which the loans were obtained, are not applicable to the Company.

(xvii) The provisions requiring that, whether the funds raised on short-term basis have been used for long term investment and vice-versa, are not applicable to the Company.

(xviii) According tothe information and explanation given to us, during the period covered by our audit report, the Company has not made any preferential allotment of Equity Shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(xix) The provisions requiring that, whether securities have been created in respect of debentures issued, are not applicable to the Company.

(xx) As no public issue has been made by the Company during the period, the provisions requiring that, whether the management has disclosed on the end use of money raised by public issues and the same has been verified are not applicable to the Company. (xxi) According to the best of our knowledge and belief and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the period covered by our audit.



For G. K. Kedia & Co

Chartered Accountants

Firm Registration No : 013016N



Gopal Kumar Kedia

Place:New Delhi Partner

Dated:30-07-2010 M.No. 054629 (Peer Review Under Process)