Auditor Report of SAAG RR Infra Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SAAG RR Infra Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 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 Statement

The 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.

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 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 the 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 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 Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 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

Attention is invited to note 2.33 in the notes forming part of the financial statements. The Company has incurred a net loss of Rs. 279.30 million during the year ended March 31, 2013, and, as of that date the Company''s net worth has also been completely eroded. These factors, along with other matters as set forth in Note 2.33, raise substantial doubt that the Company will be able to continue as going concern. Our opinion is not modified in this respect.

Report on Other Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of Section 227 (4A) 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.

2. As required by Section 227(3) of the Companies Act, 1956, we report that:

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

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

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

iv In our opinion, the Balance Sheet, 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 Companies Act, 1956; and

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

ANNEXURE TO THE AUDITORS'' REPORT:

The Annexure referred to in our report to the members of SAAG RR Infra Limited (''the company'') for the year ended 31st March, 2013. We report that:

1) a) The Company has maintained proper records to show full particulars, including quantitative details and situation of fixed assets. However, comprehensive description of assets and current location are to be incorporated in the asset records after completion of reconciliation referred to in paragraph 1(b) below.

b) The Fixed Assets have been physically verified by the management during the year. Pending completion of reconciliation which is reportedly in progress, discrepancies if any, cannot be ascertained.

c) The company has not disposed off substantial part of its fixed assets, which will affect the going concern status of the company.

2) a) The Stock of traded goods of the Company has been physically verified at periodic intervals during the year by the management. In our opinion, the frequency of such verification is adequate.

b) In our opinion, and according to the information and explanations given to us, the procedures for 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.

c) In our opinion, the company has maintained proper records of inventory .The discrepancies noticed between the physical stocks as verified and the book records were not material and have been properly dealt with in the books of account.

3) a) The Company has not granted any loans, secured or unsecured to companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to 4(iii)(d) of the Order are not applicable. .

b) The company has not 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. Accordingly paragraphs 4(iii) (e) to 4(iii)(g) of the Order are not applicable.

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 audit, no major weakness has been observed in the internal control system.

5) In our opinion and according to the information and explanations given to us, there is no transaction that needs to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 during the year under audit. Accordingly, paragraph 4(v) of the Order is not applicable.

6) The Company has not accepted any deposits from the public. Accordingly, paragraph 4(vi) of the Order is not applicable.

7) During the year, the Company does not have a formal internal audit system. However, according to the information and explanations given to us, the operating internal control systems are commensurate with the size and nature of the business.

8) Maintenance of cost records has not been prescribed for the Company by the Central Government under section 209(1) (d) of the Companies Act 1956 for any of the services rendered by the Company. Accordingly, paragraph 4(viii) of the Order is not applicable.

9) a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted /accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax and other material statutory dues have not been regularly deposited during the year by the company with the appropriate authorities.

b) According to the information and explanations given to us and the books and records examined by us, there are undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Service Tax and other material statutory dues were in arrears as at March 31, 2013 excluding applicable interest in all cases, for a period of more than six months from the date they became payable, as given below:

S. No. Name of the Statute Amount in Rs. Million - as at March 31, 2013, outstanding for a period of more than six months from the day they became payable

1 Service Tax under Finance Act, 1994 17.80

2 Income Tax Act, 1961 – Fringe Benefit Tax 0.08

3 Income Tax Act, 1961 – Tax Deducted at Source 8.22

4 Value Added Tax Act 0.02

c) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty and Cess, which have not been deposited with the appropriate authorities on account of any dispute except for the following dues under Income Tax Act:

Name of the Statue Nature of the Amount in Rs Period to which the Forum where disputes are pending disputed dues Million amount relates

Income Tax Act, 1961 Penalty 0.50 Assessment Year – Commissioner of Income Tax (Appeals), 2006-2007 Chennai

Income Tax Act, 1961 Penalty 0.50 Assessment Year – Commissioner of Income Tax (Appeals), 2007-2008 Chennai

Income Tax Act, 1961 Penalty 0.50 Assessment Year – Commissioner of Income Tax (Appeals), 2008-2009 Chennai

Service Tax under Finance Act, Tax arrears 79.95 FY 2007-08 to FY Commissioner of Service Tax. 1994 2011-12

10) The Financial statements of the Company as at 31st March 2013 show accumulated losses of Rs. 654.73 million. The Company has incurred cash losses during the financial year covered by our audit and in the immediate preceding financial year.

11) According to the records of the Company examined by us and the information and explanations given to us by the Management, the Company has defaulted in repayment of dues with respect to term loans taken from bank and the unpaid overdue principal and interest stands at Rs. 200.00 million and Rs. 63.60 million respectively.

12) Based on our examination and according to the information and explanations given to us, the company has not granted loans and advances based on security by way of pledge of shares, debentures and other securities. Accordingly, paragraph 4(xii) of the Order is not applicable.

13) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/society. Accordingly, paragraph 4(xiii) of the Order is not applicable.

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, paragraph 4(xiv) of the Order is not applicable.

15) According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. Accordingly, paragraph 4(xv) of the Order is not applicable.

16) During the year, the company has not taken any term loan from financial institutions and banks and hence paragraph 4(xvi) of the Order is not applicable.

17) On the basis of our examination of the Balance Sheet of the Company and according to the information and explanations given to us, in our opinion, funds raised on short-term basis have not been used for long-term investment and vice versa.

18) The company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and the price at which allotment has been made is not prejudicial to the interest of the Company.

19) The company has not issued any debentures during the year. Accordingly paragraph 4(xix) of the Order is not applicable.

20) The company has not raised any money by issue of shares to public during the year. Accordingly paragraph 4(xx) of the Order is not applicable.

21) According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the year under audit.

For SundarSrini& Sridhar

Chartered Accountants

Firm Registration Number: 004201S

S. Sridhar

Place: Chennai

Date: May 31, 2013 Partner

Membership Number: 025504

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Mar 31, 2012

We have audited the accompanying financial statements of SAAG RR Infra Limited ('the Company') which comprise the Balance Sheet as at 31st March, 2012, 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 Statement

The Management is responsible for .he 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 materialmisstatement, 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 judgement, including the assessment of 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 the 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 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 Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012;

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.

iport on Other Legal & Regulatory Requirements

I. As required by the Companies (Auditor's Report) Order, 2003 ('the Order1), as amended, issued by the Central Government of India in terms of Section 227 (4A) 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.

As required by Section 227(3) of the Companies Act, 1956, we report that:

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

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

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

iv In our opinion, the Balance Sheet, 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)ofSection211 oftheCompaniesAct, 1956; and

v On the basis of written representations received from the Directors as at 31st March, 2012, and taken on record by the Board of Directors, none of the directors are disqualified as on 31stMarch, 2012, from being appointed as a director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT:

The Annexure referred to in our report to the members of SAAG RR Infra Limited ('the company') for the year ended 31*March, 2012.

We report that:

1) a) The Company has maintained proper records to show full particulars, including quantitative details and situation of fixed assets. However, comprehensive description of assets and current location are to be incorporated in the asset records after completion of reconciliation referred to in paragraph 1(b) below.

b) The Fixed Assets have been physically verified by the management during the year. Pending , completion of reconciliation which is reportedly in progress, discrepancies if any, cannot be ascertained.

c) The company has not disposed off substantial part of its fixed assets, which will affect the going concern status of the company.

2) a) The Stock of traded goods of the Company has been physically verified at periodic intervals during the year by the management. In our opinion, the frequency of such verification is adequate.

b) In our opinion, and according to the information and explanations given to us, the procedures for 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.

c) In our opinion, the company has maintained proper records of inventory The discrepancies noticed between the physical stocks as verified and the book records were not material and have been properly dealt with in the books of account.

3) a) The Company has not granted any loans, secured or unsecured to companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to 4(iii)(d) of the Order are not applicable.

b) The company has not 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. Accordingly paragraphs 4(iii) (e) to 4(iii)(g) of the Order are not applicable.

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 audit, no major weakness has been observed in the internal control system.

5) In our opinion and according to the information and explanations given to us, there is no transaction that needs to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 during the year under audit. Accordingly, paragraph 4(v) of the Order is not applicable.

6) The Company has not accepted any deposits from the public. Accordingly, paragraph 4(vi) of the Order is not applicable.

7) The internal audit system of the Company needs to be strengthened to commensurate with the size and nature of 'the business.

8) Maintenance of cost records has not been prescribed for the Company by the Central Government under section 209(1) (d) of the Companies Act 1956 for any of the services rendered by the Company. Accordingly, paragraph 4(viii) of the Order is not applicable.

9) a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted /accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other material statutory dues have not been regularly deposited during the year by the company with the appropriate authorities.

b) According to the information and explanations given to us and the books and records examined by us, there are undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax and other material statutory dues were in arrears as at March 31, 2012 excluding applicable interest in all cases, for a period of more than six months from the date they became payable, as given below:

Amount in Rs. as at March 31,2012, S.No Name of the Statute outstanding for a period of

more ™n six months from the day they became payable

Employees' Provident Funds and Miscellaneous 9 125 Provisions Act, 1952

2 Service Tax under Finance Act, 1994 9,962,949

3 Income Tax Act, 1961-Fringe Benefit Tax 80,208

4 Income Tax Act, 1961-Tax Deducted at Source 5,053,396

5 Value Added Tax Act 38,673

c) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty and Cess, which have not been deposited with the appropriate authorities on account of any dispute except for the following dues under Income TaxAct:

Period to Forum where Name of the Nature of the Amount In Rs which the disputes are Statue disputed dues Amount relates pending

Commiss ioner of

Income Tax Act, Penalty 1,400,000 Assessment Commiss Year ioner of 1961 (Appeals), 2009-2004 Chennai

Commiss ioner of Income Tax Act, Assessment Year - Income Tax 1961 Penalty 500,000 2006-2007 (Appeals), Chennai

Commiss ioner of Income Tax Act, Assessment Year - Income Tax 1961 Penalty 500'000 2007-2008 (Appeals), Chennai

Commiss ioner of Income Tax Act, Assessment Year- Income Tax 1961 Penalty 500'000 2008-2009 (Appeals), Chennai

10) The Financial statements of the Company as at 31st March 2012 show accumulated losses of Rs. 375,433,851 which has exceeded fifty percent of the Company's Networth. The Company has incurred cash losses during the financial year covered by our audit and in the immediate preceding financial year.

11) According to the records of the Company examined by us and the information and explanations given to us by the Management, the Company has defaulted in repayment of dues with respect to term loans taken from bank and the unpaid overdue principal and interest stands at Rs. 200,000,000 and Rs. 42,400,008 respectively.

12) Based on our examination and according to the information and explanations given to us, the company has not granted loans and advances based on security by way of pledge of shares, debentures and other securities. Accordingly, paragraph 4(xii) of the Order is not applicable.

13) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/society. Accordingly, paragraph 4(xiii) of the Order is not applicable.

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, paragraph 4(xiv) of the Order is not applicable.

15) According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. Accordingly, paragraph 4(xv) of the Order is not applicable.

16) During the year, the company has not taken any term loan from financial institutions and banks and hence paragraph 4{xvi) of the Order is not applicable.

17) On the basis of our examination of the Balance Sheet of the Company and according to the information and explanations given to us, in our opinion, funds raised on short-term basis have not been used for long-term investment and vice versa.

18) The company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and the price at which allotment has been made is not prejudicial to the interest of the Company.

19) The company has not issued any debentures during the year. Accordingly paragraph 4(xix) of the Order is not applicable.

20) The company has not raised any money by issue of shares to public during the year. Accordingly paragraph 4(xx) of the Orderis not applicable.

21) According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the year under audit.

ForSundarSrini & Sridhar CharteredAccountants

Firm Registration Number: 004201S

S. Sridhar

Partner

Membership No: 02SS04

Place: Chennai Date: May 30,2012

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Mar 31, 2010

1. We have audited the attached Balance Sheet of SAAG RR Infra Limited (the Company) as at March 31, 2010 and the Profit & Loss Account and the 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 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 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 matters specified in paragraphs 4 and 5 of the said order.

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, the Company has kept proper books of account, as required by law so far as appears from our examination of those books;

(c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account of the Company;

(d) In our opinion, the Balance Sheet, the Profit & Loss Account & 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 Companies Act, 1956;

(e) On the basis of written representation 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 Section 274 (1)(g) 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 Balance Sheet, Profit and Loss Account & Cash Flow Statement read with Schedules and Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet of the Company, 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 of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT:

The Annexure referred to in the auditors report to the members of SAAG RR Infra Limited (the Company) for the year ended March 31, 2010. We report that:

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

(b) The assets have been physically verified by the management at periodic intervals, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification. In respect of assets lying at sites, which have not been physically verified, there is a process of obtaining confirmation from the respective sites.

( c) The Company has not disposed off substantial part of its fixed assets, which will affect the going concern status of the Company.

2. (a) The Stock of traded goods of the Company has been physically verified at periodic intervals during the year by the management. In our opinion, the frequency of such verification is adequate.

(b) In our opinion, and according to the information and explanations given to us, the procedures for 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.

(c) In our opinion, the Company has maintained proper records of inventory .The discrepancies noticed between the physical stocks as verified and the book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to 4(iii)(d) of the Order are not applicable. (b) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

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 audit, no major weakness has been noticed in the internal control system.

5. In our opinion and according to the information and explanations given to us, there is no transaction that needs to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 during the year under audit. Accordingly, paragraph 4(v) of the Order is not applicable.

6. The Company has not accepted any deposits from the public. Accordingly, paragraph 4(vi) of the Order is not applicable.

7. The Company has an internal audit system but is not adequate commensurate with the size and nature of the business.

8. Maintenance of cost records has not been prescribed for the Company by the Central Government under section 209(1) (d) of the Companies Act 1956 for any of the services rendered by the Company. Accordingly, paragraph 4(viii) of the Order is not applicable.

9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted /accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other material statutory dues have not been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Excise duty.

(b) There were no dues on accounts of Cess under Section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by the Central Government of India.

(c) According to the information and explanations given to us, there are undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Cess and other material statutory dues as at March 31, 2010 for the period of more than six months from the day they became payable, as given below:

S. No. Name of the Statute Amount in Rs. as at March 31, 2010, outstanding for a period of more than six months from the day they became payable

1 Employees Provident Funds and Miscellaneous Provisions Act,1952 8,565

2 Service Tax under Finance Act, 1994 2,180,929

3 Income Tax Act, 1961 - Fringe Benefit Tax 103,548

4 Income Tax Act, 1961 - Tax Deducted at Source 1,255,565

(d) According to the information and explanations given to us, there are dues of Income Tax which have not been deposited with the appropriate authorities on account of any dispute.

Name of the Nature of the Amount in Period to which Forum where Statue disputed dues Rs the amount relates disputes are pending

Income Tax Penalty 1,400,000 Assessment Year Commissioner of Act,1961 2003-2004 Income Tax (Appeals), Chennai

Income Tax Penalty 500,000 Assessment Year Commis sioner of Act, 1961 2006-2007 Income Tax (Appeals), Chennai

Income Tax Penalty 500,000 Assessment Year Commiss ioner of Act, 1961 2007-2008 Income Tax (Appeals), Chennai

Income Tax Penalty 500,000 Assessment Year Commis sioner of Act, 1961 2008-2009 Income Tax (Appeals), Chennai

10. The Financial statements of the Company as on March 31, 2010 show accumulated loss of Rs.3,34,28,234. The Company has incurred cash loss during the financial year covered by our audit and also during immediate preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us by the management, the Company has defaulted in repayment of dues with respect to Hire Purchase loans taken from the financial institutions and banks as at Balance Sheet date.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances based on security by way of pledge of shares, debentures and other securities. Accordingly, paragraph 4(xii) of the Order is not applicable.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/society. Accordingly, paragraph 4(xiii) of the Order is not applicable.

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, paragraph 4(xiv) of the Order is not applicable.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions and accordingly, paragraph 4(xv) of the Order is not applicable.

16. The Company has taken term loan from bank and has applied the same for the purpose for which the Loan was taken.

17. On the basis of our examination of the Balance Sheet of the Company and according to the information and explanations given to us, in our opinion, funds raised on short-term basis have not been used for long-term investment and vice versa.

18. The Company has not allotted shares on preferential basis to Companies/Firms/parties covered in the Register maintained under section 301 of the Companies Act, 1956. Accordingly paragraph 4(xviii) of the Order is not applicable.

19. The Company has not issued any secured debentures. Accordingly paragraph 4(xix) of the Order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, paragraph 4(xx) of the Order is not applicable.

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



For Sundar Srini & Sridhar Chartered Accountants Firm Registration No: 004201S

S. Sridhar Place: Chennai Partner

Date: May 29, 2010 Membership No: 25504