Auditor Report of Terruzzi Fercalx India Ltd.

Dec 31, 2013

We have audited the accompanying financial statements of Vulcan Engineers Limited ("the Company"), which comprise the balance sheet as at 31st December 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.

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 referred to in sub- section (3C) of section 211 of 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.

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 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

(a) in the case of the balance sheet, of the state of affairs of the Company as at 31st December 2013;

(b) in the case of the statement of profit and loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to note no.36 of the financial statements in regard to amount aggregating to Rs. 45,026,202 due to Holding company which has remained unsettled beyond time period as approved by Reserve Bank of India. Our opinion is not qualified in respect of this matter.

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 sub-section (3) of Section 227 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, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of 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 and

e. on the basis of written representations received from the directors of the Company as on 31 December 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 2013, 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 THE HEADING OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE]

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

(b) All the fixed assets are physically verified by the management according to a phased programme designed to cover all items over a period of three financial years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed by the management on such verification.

(c) During the year, the Company has not disposed off any part of its fixed assets.

2. (a) According to the information and explanation given to us, inventories purchased by the Company from its suppliers are directly dispatched to customers. In the absence of any inventory being stocked by the Company, clause 4(ii)(a) and 4(ii)(b) of the Order are not applicable to the Company

(b) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory.

3. According to information and explanations given to us, the Company has not granted/taken any loan, secured or unsecured, to/from Companies, firms and other parties covered in the Register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

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 purchase of inventory and fixed assets and for 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 control system.

5. (a) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been recorded in the register.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Act have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder during the year.

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

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Act in the case of the Company.

9. (a) According to the information and explanation given to us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as on the last day of the financial year for a period of more than six months from the date they became payable.

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

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth and the Company has incurred cash loss during the current financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company does not have any borrowings from financial institutions and by way of debentures.

12. According to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

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

16. According to the information and explanations given to us, the Company has not taken any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, as at 31st December 2013, funds raised on short term basis have not been used for long term investments.

18. The Company has not made preferential allotment of shares to the parties or companies covered in the register maintained under Section 301 of the Act during the year.

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

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

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such cases by the management

FOR SURESH SURANA & ASSOCIATES LLP Chartered Accountants ICAI Reg. No. 121750W / W-100010

(Vinodkumar Varma) PARTNER Membership No. 105545 Place: Mumbai Dated: 28th February 2014

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Dec 31, 2012

1. We have audited the attached balance sheet of Vulcan Engineers Limited ("the Company") as at 31 December 2012 and also the statement of profit and loss and cash flow statement 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 a reasonable basis for our opinion.

3. As required by Companies (Auditor''s Report) 2003 (''the Order'') issued by Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (''the Act''), on the basis of such checks of the books and records of the Company, as we considered appropriate, and according to information and explanations given to us, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c) The balance sheet, the 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable except in respect of Accounting Standard (AS)-22 ''Accounting for Taxes on Income'' for recognising deferred tax assets (net), though there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised, due to which loss after tax for the year is lower by Rs. 12,788,466; deferred tax assets (net) is higher and profit and loss (debit balance) is lower by Rs. 28,288,516 as at 31 December 2012;

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

f) In our opinion and to the best of our information and according to the explanations given to us, subject to our comments in paragraph 4(d) above, the said financial statements together with the notes thereon 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:

i) in the case of the balance sheet, of the state of affairs of the Company as at 31 December 2012;

ii) in the case of the statement of profit and loss, of the loss of the Company for the year ended on that date; and

iii) in the case of the cash flow statement of the cash flows of the Company for the year ended on the date.

ANNEXURE TO THE AUDITORS'' REPORT

REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) All the fixed assets are physically verified by the management according to a phased programme designed to cover all items over a period of three financial years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed by the management on such verification.

(c) During the year, the Company has not disposed off substantial part of its fixed assets.

2. (a) According to the information and explanation given to us, inventories purchased by the Company from its suppliers are directly dispatched to customers. In the absence of any inventory being stocked by the Company, clause 4(ii)(a) and 4(ii)(b) of the Order are not applicable to the Company.

(b) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory.

3. According to information and explanations given to us, the Company has not granted/taken any loan, secured or unsecured, to/from Companies, firms and other parties covered in the Register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

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 purchase of inventory and fixed assets and for 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 control system.

5. (a) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been recorded in the register.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Act have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder during the year.

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

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Act in the case of the Company.

9. (a) According to the information and explanation given to us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as on the last day of the financial year for a period of more than six months from the date they became payable.

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

10. The accumulated losses of the Company at the end of the financial year are not more than fifty percent of its net worth and the Company has incurred cash loss during the current financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company does not have any borrowings from financial institutions and by way of debentures.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

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

16. According to the information and explanations given to us, the Company has not taken any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, as at 31 December 2012, funds raised on short term basis have not been used for long term investments.

18. The Company has not made preferential allotment of shares to the parties or companies covered in the register maintained under Section 301 of the Act during the year.

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

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

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such cases by the management.

FOR SURESH SURANA & ASSOCIATES

Chartered Accountants

Firm Reg. No.: 121750W

(Nirmal Jain)

PARTNER

Membership No. 34709

Mumbai, Dated : 21 Februrary 2013

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Dec 31, 2010

1. We have audited the attached balance sheet of Vulcan Engineers Limited ("the Company") as at 31 December 2010 and also the profit and loss account and cash flow statement of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the 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, evidences 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 (the Order) issued by Central Government of India in terms of section 227(4A) of the Companies Act, 1956, on the basis of such checks of the books and records of the Company, as we considered appropriate and according to information and explanations given to us, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c) The balance sheet, profit and loss account 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 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 except Accounting Standard (AS)-2 Valuation of Inventories for reason mentioned in Note 2 of Schedule 18, impact of which on the profit for the period and inventories and accumulated losses as at 31/12/2010 is not ascertainable;

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to our comments in paragraph 4(d) above and read together with other notes thereon in Schedule 18, 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 31 December 2010;

b) in the case of the profit and loss account, of the profit for the period ended on that date; and

c) in the case of cash flow statement of the cash flows for the period ended on the date.

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

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

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all items over a period of three financial years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the period and no material discrepancies between the book records and the physical verification of fixed assets have been noticed.

c) During the period, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) In our opinion and according to information and explanations given to us, physical verification of inventory has been conducted by the management at reasonable intervals.

b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) According to the information and explanations given to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with by the Company in the books of account.

3. The Company has not granted / taken any loans, secured or unsecured to / from companies, firms and other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

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 for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been recorded in register.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from public during the period.

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

8. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Act in case of the Company.

9. a) According to the information and the explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues, with the appropriate authorities, wherever applicable. There are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31 December 2010 for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, there are no dues on account of income tax / sales tax / wealth tax / service tax / custom duty / excise duty / cess which has not been deposited on account of any dispute.

10. The accumulated losses of the Company at the end of the financial period are not more than fifty percent of its net worth and the Company has not incurred cash losses during the current financial period and in the immediately preceding financial year.

11. According to information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company does not have any borrowing from financial institution and by way of debentures.

12. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, and other securities.

13. According to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, provision of clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

14. In our opinion and according to information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provision of clause 4 (xiv) of the Order is not applicable to the Company.

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

16. According to information and explanations given to us, the Company has not taken any term loan during the period. As at period end, there are no term loans outstanding.

17. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that as at 31 December 2010, no funds raised on short-term basis have been used for long-term investment.

18. During the period, 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 debentures.

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

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period.

FOR SURESH SURANA & ASSOCIATES

Chartered Accountants Firm Reg. No.: 121750W

(Nirmal Jain) PARTNER Membership No. 34709

Mumbai, Dated : 28th February, 2011

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Mar 31, 2010

1. We have audited the attached balance sheet of Vulcan Engineers Limited as at 31 March 2010 and also the profit and loss account and cash flow statement 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 the 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, evidences 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 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (hereinafter referred to as the Order) issued by Central Government of India in terms of section 227(4A) of the Companies Act, 1956, on the basis of such checks of the books and records of the Company, as we considered appropriate and according to information and explanations given to us, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c) The balance sheet, profit and loss account 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 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 except Accounting Standard (AS)-2 Valuation of Inventories for reason mentioned in Note 2 of Schedule 19, impact of which on the profit for the year and inventories and accumulated losses as at 31/03/20 Wis not ascertainable;

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to our comments in paragraph 4(d) above and read together with other notes thereon in Schedule 19, 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 31 March 2010;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement of the cash flows for the year ended on the date.

ANNEXURE TO THE AUDITORS REPORT

REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

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

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all items over a period of three financial years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical verification of fixed assets have been noticed.

c) During the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) In our opinion and according to information and explanations given to us, physical verification of inventory has been conducted by the management at reasonable intervals.

b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) According to the information and explanations given to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with by the Company in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has not granted any loans to companies, firms or other parties during the year. Accordingly, the provisions of clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable to the Company.

b) The Company had taken unsecured loans from two companies. The Maximum amount involved during the year was Rs. 2,273,200 and year end balance was Rs. 1,883,712. At year end, these parties are not covered under section 301 of the Companies Act, 1956.

c) In our opinion and according to information and explanations given to us, in respect of such loans taken by the Company, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the Company.

d) According to information and explanations given to us, the Company is regular in repaying the principal amount and interest thereon.

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 for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of

contracts or arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been recorded in register.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from public during the year.

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

8. As explained to us, the maintenance of cost records under Section 209(1) (d) of the Act is not applicable to the Company.

9. a) According to the information and the explanations given to us, the Company has been generally regular in depositing

undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues, with the appropriate authorities wherever applicable. There are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31 March 2010 for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, there are no dues on account of income tax / sales tax / wealth tax / service tax / custom duty / excise duty / cess that has not been deposited on account of any dispute.

10. The accumulated losses of the Company at the end of the financial year are not more than fifty percent of its net worth and the Company has not incurred cash losses during the current financial year. The Company had incurred cash losses in the immediately preceding financial year.

11. According to information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company does not have any borrowing from financial institution and by way of debentures.

12. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, and other securities.

13. According to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society, provisions of clause (xiii) of paragraph4 bf thsMOrder is not applicable to the Company.

14. In our opinion and according to information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provision of clause 4 (xiv) of the Order is not applicable to the Company.

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

16. According to information and explanations given to us, the Company has not taken any term loan during the year. As at year end, there are no term loans outstanding.

17. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that as at 31 March 2010, no funds raised on short-term basis have been used for long-term investment.

18. 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 debentures.

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

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR SURESH SURANA & ASSOCIATES

Chartered Accountants

(Nirmal Jain)

PARTNER

Membership No. 34709 Firm Reg. No.: 121750W

Mumbai, Dated : 28th May, 2010