2. We have 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.

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, (the Act), we enclose in the Annexure a statement on the mattes specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to 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 dealt with by this report are in agreement with the books of account;

d. In our opinion, the balance sheet, profit and 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; subject to :

Regarding non compliance of AS-6 & AS-10 related to Depreciation Accounting & Accounting of Fixed Assets respectively i.e profit/ loss on sale of land , building and plant & machinery is not recognized due to non availability of cost of asset disposed .

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

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 March 31, 2010;

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

iii. in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure to the auditors Report - March 31, 2010 (Referred to in paragraph 3 of our report of even date)

(i) (a) The Company maintaining proper records Showing full particulars, including quantitative details and situation of its fixed assets.

(b) The Company physically verifies the fixed assets on a rotational basis and accordingly, certain fixed assets have been physically verified by the management.during the year and no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The company does not have any inventory. Hence clauses (a) (b) and (c) are not applicable to the company

(iii) The Company has taken loan from 3 parties covered in the register maintained under section 301 of the Companies Act, 1956. The closing balance of the same as on 31.3.2010 was Rs 136.72 lacs.

(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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) Based on the audit procedures applied by us and the information and explanations provided by the management, we are of the opinion that there were no contracts or arrangements during the year that need to be entered in the register maintained under section 301 of the companies Act, 1956.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58 A of the Act and the rules framed there under apply.

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

(viii) We are informed that the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, Cess have been regularly deposited by the Company with appropriate authorities in all cases during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, at the year, end for a period of more than six months from the date they became payable.

(b) According to the records of the company, there are no dues of Income-tax, Sales tax, Wealth tax, Service Tax, Customs duty, Excise duty and Cess which have not been deposited on accounts of any dispute.

(x) The accumulated losses of the company have exceeded Fifty percent of its net worth as at 31st March, 2010. The company has not incurred cash losses during the financial year covered by our Audit and not in the immediately preceding financial year. In arriving at the accumulated losses and the net worth we have considered the qualifications which are quantifiable in the Audit report of the year to which these losses pertain.

(xi) During the year the company has made a payment of Rs. 3.98 crores to Kotak Mahindra Bank against ARD loan , however in the absence of Agreement with the bank, we are unable to comment on the terms & conditions for repayment of Bank Loans. And the company has also provided interest on the above loan . However no confirmation is available in respect of loan balance and interest their on.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The nature off activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

(xiv) The company does not deal or trade in shares, securities, debentures and other investments.

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

(xvi) According to the records of the company, the Company had obtained terms loans during the year. Please refer point (xi) above.

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

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

(xix) According to the records of the company, the Company has not issued any debentures.

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

(xxi) According to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

                                        for L.N. MALIK & CO.
                                        CHARTERED ACCOUNTANTS

                                        (L.N. MALIK)
                                        PARTNER
                                        FRN 015992N
                                        M.No 10423