Auditor Report of Baffin Engineering Projects Ltd.

Mar 31, 2013

We have audited the accompanying financial statements of Baffin Engineering Projects Ltd. which comprise the Balance Sheet as at March 31, 2013, and 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 is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C} of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under section 5SA and 58AA of the Companies ActH 1956.

7. As per information & explanations given by the management the Company has no internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. [a) According to the records of the company, 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 to the extent applicable and any other statutory dues have been irregularly fn depositing with the appropriate authorities. According tn the information and explanations given to us there are outstanding statutory dues i.e. Tax deducted at source (as shown below} as on 31sL of March, 2013 for a period of more than six months from the date they became payable. TDS payable has not been shown in Balance Sheet for FY 2010-11 & FV 2011-12 & FY 2012-13

* FY 2009-10 Rs 154500

* FY 2010-11 Rs 117437

- FY 2011-12 Rs 17588

- FY 2012-13 Rs 4045

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. The Company has accumulated loss of Rs 237.36 lakhs and has incurred cash toss during the financial year covered by our audit

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13. The Company is not a chit fund or a nidhi /mutual benefit, fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

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

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, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Baffin Engineering Projects Limited on the accounts of the company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. There is no inventory.

3 (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 ¦ of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

4. in our opinion and according to the information and explanations given to us, there is generally no adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories &. fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by ys and according to the information and explanations provided by the management, there is no particulars of contracts or arrangements referred to in section 301 of the Act which are to be entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act

14. According to Information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments.

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

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year,

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and-the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Dhamija Sukhija & Co

Chartered Accountants

Place: New Delhi Partner

Date: 15-05-2013 MEMBERSHIP No. : 159 63

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Apr 30, 2010

1. We have audited the attached Balance Sheet of BAFFIN ENGINEERING PROJECTS LTD as at 30th April, 2010 and the Profit & Loss account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 presentations. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditory Report) order, 2003 issued by the Central Government of India in terms of Section 227 (4a) of the Companies Act, 1956, 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:

4.1. We have obtained all the informations and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit:

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

4.3. The Balance Sheet, Profit & Loss Account and the cash flow statement dealt with by this report are in agreement with the books of accounts.

4.4. In our opinion, the Profit & Loss Account and Balance Sheet referred to in this report comply with the accounting standards referred to in Sub- Section (3C) of section 211 of Companies Act, 1956.

4.5. According to information & explanations given to us and on the basis of the written representations from the directors, taken on record by the Board of Directors none of the Directors is disqualified as on April 30,2010 from being appointed as a director Under Section 274 (1) (g) of the Companies Act, 1956;

4.6. In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act,1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

1) In the case of Balance Sheet of the State of affairs of the company as at 30th April, 2010.

2) In the case of Profit & Loss Account of the Loss for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE). REF: BAFFIN ENGINEERING PROJECTS LTD

(a) The company is maintaining proper records showing full particulars including quantitative details of fixed assets.

(b) All the fixed assets have been physically verified by the management during the year and there is a regular program of verification which. In our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification

(c) During the year the company has not disposed off substantial part of fixed assets. Based on the information and explanations given by the management and on the basis of audit procedure conducted by us, we are of the opinion that the sale of such assets does not affect the going concern assumption.

1. (a). The management has conducted physical verification of inventory at reasonable intervals.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. During the process of Corporate Debt Restructuring, the bankers had appointed independent auditors for the valuation of the stocks and no material discrepancies were observed in the process.

(c) The Company is maintaining proper records of Inventory. No discrepancies were noticed on verification between the physical stocks and the book records.

2. The Company has neither granted nor taken any loans, secured or unsecured, from Companies, Firms or other Parties covered in the register, maintained under Section 301 of the Companies Act, 1956.

3. According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and for sale of goods and services. In regards to pricing and purchase of inventory, fixed assets and sale of goods, we have relied upon the certification of the management of the company.

4. According to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956, has been entered.

5. According to the information and explanations given to us, there are no transactions made in pursuance of such contract or arrangements and exceeding Rs. 5,00,000/- in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from public.

7. According to the information given to us the company is in the process of introducing the internal audit system commensurate with its size and nature of business.

8. According to the information and explanations given to us, maintenance of cost records has not been prescribed by the Central Government under section 209(1)of the Companies Act, 1956.

9. According to the records of the company and informations given to us, the company is irregular in depositing undisputed statutory dues including Income Tax.

10. According to the information and explanations given to us, The company has defaulted in payment of Rs,22,583/- towards TDS dues.

11. The Company has incurred cash losses in the current year.

12. According to the information and explanations given by the management, that the Company has not defaulted in repayment of dues to financial institutions and banks. There were no debenture holders at any time during the year.

13. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

14. As per the information and explanations given to us, the provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the Company.

15. In our opinion and according to the information and explanation given to us the company is not a dealer or trader in securities.

16. The Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are prima facie, prejudicial to the interest of the Company.

17. The Company has not any term loan during the year.

18. Based on the examination of documents and records made available and on the basis of information and explanation given to us, since the company has not raised short-term and long-term fund, Para 4 of the order is not applicable.

19. According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties & Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

20. No debentures have been issued by the Company and hence question of creating security does not arise.

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

22. On the basis of our examination and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For DHAMIJA SUKHIJA & CO. Chartered Accountants

(A.K.DHAMIJA) PARTNER M. No: 15963

Place: New Delhi Date : 14.09.2010