Artech Power Products Ltd

To

Members

Artech Power Products Limited

Anitha 2nd Floor S A Road,

Elarnkulam

Cochin - 682020

We have audited the attached Balance Sheet of M/s.Artech Power Products Limited("The company") as at 31st March, 2011 and the Profit & Loss Account of thecompany for the year ended that date annexed thereto. These financial statements are theresponsibility of the Company's management. Our responsibility is to express an opinion onthese financial statements based on our audit.

We have conducted our audit in accordance with auditing standards generally accepted inIndia. These standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements and also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentationof financial statements. We believe that our audit provides a reasonable basis for ouropinion.

As required by the Statement on the Companies (Auditor's Report) Order 2003, as amendedby the Companies (Auditors Report) (Amendment) Order. 2004 (together the"Order"), issued by the Central Government of India in terms of sub-section (4A)of section 227 of the Companies Act, 1956. and on the basis of such checks of the booksand records of the Company as we considered appropriate and according to the informationand explanations given to us. we give in the Annexure a statement on the matters specifiedin paragraphs 4 and 5 of the Order

Further we report that:-

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

ii In our opinion, proper books of accounts as required by law have been kept by thecompany so far as appears from our examination of those books.

iii The Balance Sheet. Profit & Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of accounts

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

v On the basis of written representation received from directors and taken on record bythe Board of Directors, we report that none of the Directors is disqualified as on 31stMarch. 2011 from being appointed as a director in terms of clause (g) of sub-section (1)of section 274 of the Companies Act. 1956.

vi.In our opinion and to the best of our information, and according to the explanationgiven 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 accountingprinciples generally accepted in India:

a)in the case of the Balance Sheet, of the state of affairs of the company as at 31stMarch. 2011:

b) in the case of the Profit & Loss Account, of the Profit for the year ended onthat date: and

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

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in our report of even date to the members of Artech PowerProducts Limited on the accounts for the

(i) The company does not have fixed assets. Therefore, the provisions of clause (i)(a)to (i)(c) of paragraph 4 of the said Order are not applicable to the company.

(ii) The company does not have any inventories. Therefore, the provisions of clauses(ii)(a) to (ii)(c) of paragraph 4 of the said Order are not applicable to the company.

(iii) The company has not granted any loans, secured or unsecured to companies, firms,or other parties, covered in the register maintained under section 301 of the Act. Clauses(iii)(b) to (iii)(d) of paragraph 4 of the said Order are not applicable to the company.

e) The company has taken unsecured loans from 2 parties. At the year end. theoutstanding balance of such loans taken aggregated to Rs.650521 and the maximumamount involved during the year was Rs.917,521.

f) The rate of interest and other terms and conditions of such loans are. in ouropinion, prima facie not prejudicial to the interest of the company.

g) The terms of repayment for the above loans Live not been stipulated, but the sameare stated to be reapayable on demand. Since the company is stated to have receded nodemand for repayment of the above loans, there has been no default on the part of thecompany.

(iv) In our opinion and according to the information and explanations given to us.there are adequate internal control systems commensurate with the size of the company andnature of its business for the purchase of inventory and fixed assets and for sale ofgoods and services. During the course of our audit, no major weaknesses have been noticedin the internal controls.

(v) In our opinion and according to the information and explanations given to us. thereare no contracts and arrangements referred to in section 301 of the Companies Act. 1956during the year that need to be entered in the register maintained under that section.Accordingly. Clause (v) (b) of the paragraph 4 of the Order is not aplicable to thecompany for the current year.

(vi) The company has not accepted any deposit from public within the meaning of section58 A and 58 AA or any other relevant provisions of the Act and the Companies (Acceptanceof Deposits) Rules. 1975 framed thereunder. The appeal filed by the Registrar ofCompanies. Kerala against the company with the Hon'ble Kerala High Court, as specified inpoint no.4 of Notes to Accounts forming part of Schedule 11 to financials statements, isyet to be disposed off.

(vii) In our opinion, the company's internal audit system is commensurate with its sizeand its nature of activities,

(viii) The provisions regarding maintenance of cost records under section 209(l)(d) ofthe Companies Act. 1956 are not applicable to the company.

(ix) a) According to the information and explanations provided to us. the company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund, investor education and protection fund, employees' stateinsurance, income tax wealth tax. service tax. customs duty, excise duty, cess and othermaterial statutory dues, applicable to it. The following were outstanding for a period ofmore than six months on the last day of the financial year.

b) There is no amount payable in respect of the aforesaid statutory dues that have notbeen deposited on account of any disputes.

(x) The accumulated losses of the company at the end of the financial year is more thanfifty percent of the net worth; but the company has not incurred cash losses during thecurrent financial year and in the immediately preceeding financial year.

(xi) As per the information and explanations given to us. the company has not availedany loans from banks or financial institutions or through debentures.

(xii) The company has not granted any loans and advances on the basis of security byway of pledge of shares.debentures and other securities,

(xiii) The provisions of any special statute applicable to Chit Fund or Nidhi or MutualFund Society are not applicable to the company.

(xiv) In our opinion and according to the explanations given to us. the company is nota dealer or trader in securities.

(xv) As explained to us, the company has not given any guarantee for loans taken byothers from bank or financial instiutions. the terms and conditions whereof, areprejudicial to the interest of the company,

(xvi) According to the information and explanations given to us, the term loans takenby the company hane been applied for the purpose for winch they were obtained,

(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the company, we report that no funds raised on shortterm basis have been used for long term investments.

(viii) The company has not made any preferential allotment of shares to parties coveredin the register maintained under section 301 of the Companies Act. 1956 during the year

(xix) In our opinion the company has not issued any debentures during the year.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) According to the information and explanations given to us. during the year, nofraud on or by the company has been noticed or reported.