Cords Cable Industries Ltd

Auditor's Report to the Members of M/S. CORDS CABLE INDUSTRIES LTD.

We have audited the attached Balance Sheet of CORDS CABLE INDUSTRIES LIMITED, asat March 31, 2011, and also the Profit & Loss Account and Cash Flow Statement for theyear ended on that date annexed thereto. These financial statements are the responsibilityof the Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

As required by the Companies (Auditor's Report) Order, 2003, as further amended by theCompanies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government ofIndia in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the said Order to the extentapplicable to the Company.

Further to our comments in the Annexure referred to above, we report that:

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

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

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementcomply with the Accounting Standards referred to in sub-section (3C) of Section 211 of theCompanies Act, 1956, to the extent applicable; and

v) On the basis of written representation received from the Directors of the Company ason March 31, 2011 and taken on record by the Board of Directors, we report that none ofthe Directors are disqualified from being appointed as Director of the Company underclause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi) In our opinion, and to the best our information and according to the explanationsgiven to us, the said financial statements give the information required by the CompaniesAct, 1956, in a manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

a. in the case of the Balance sheet, of the state of affairs of the Company as at March31, 2011;

b. in the case of the Profit and Loss Account, of the profit for the year ended on thatdate.

c. in the case of the cash flow statement, of the cash flows for the year ended on thatdate.

Annexure to Auditor's Report.

With reference to the Annexure referred to in the Auditor's report, to the members ofthe company on the financial statements for the period ended March 31, 2011, we reportthat:

1. In respect of its fixed assets:

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

b) All the assets have been physically verified by the Management during the yearaccording to a regular program of verification, which in our opinion is reasonable havingregard to the size of the company and the nature of its assets. No material discrepancieshave been observed on such verification.

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

2. In respect of its inventories:

a) The inventory (excluding stocks with third parties) has been physically verified bythe management during the year. In respect of inventory lying with third parties, thesehave substantially been confirmed by them. In our opinion, the frequency of verificationis reasonable.

b) In our opinion, the procedures of physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of its business.

c) In our opinion and according to the information and explanations given to us, theCompany is maintaining proper records of inventory and no material discrepancies werenoticed on verification between the physical stocks and the book records.

3. As informed to us, the Company has neither granted nor taken any loans, secured orunsecured, to companies, firms or other parties covered in the register maintained undersection 301 of the Companies Act, 1956. Accordingly clause 4(iii) of the Companies(Auditor's Report) order, 2003 as amended by the Companies (Auditor's Report) (Amendment)Order, 2004 is not applicable to the company for the current year.

4. In our opinion, and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the company and thenature of its business, for the purchase of inventory and fixed assets and for sale ofgoods and services. During the course of our audit, we have not observed any instance ofmajor weaknesses in internal controls.

5. In respect of the contracts or arrangements referred to in Section 301 of thecompanies Act, 1956:

a) To the best of our knowledge and belief and according to the information andexplanation given to us, we are of the opinion that the particulars of contracts orarrangements, that need to be entered into the register maintained under Section 301 ofthe Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, thetransaction made in pursuance of such contracts or arrangements have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning ofSection 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

7. The Company has an internal audit system, which in our opinion is commensurate withthe size and nature of its business.

8. We are of the opinion that prima facie, the cost record and accounts prescribed bythe Central Government under Section 209 (I) (d) of the Companies Act, 1956 have been madeand maintained. We have not, however, carried out a detailed examination of the recordswith a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) The company is generally regular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees State Insurance.According to the information and explanations given to us and on the basis of ourexamination of the records of the Company, amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Income Tax and other materialstatutory dues have generally been regularly deposited during the year by the company withthe appropriate authorities. As explained to us, the Company did not have any dues onaccount of Provident Fund, Investor Education and Protection Fund, Employee's StateInsurance, Sales Tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty. There were nodues on account of Cess under Section 441A of the Companies Act, 1956 since the aforesaidsection has not yet been made effective by the Central Government. According to theinformation and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Investor Education and Protection Fund, Employees State Insurance, IncomeTax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise Duty, Cess and any otherstatutory dues, as at March 31, 2011 for a period of more than six months from the datethey became payable.

b) According to information and explanations given to us, details of dues of ExciseDuty and Sales Tax which have not been deposited on account of a dispute are given below:

10. The company does not have accumulated losses at the end of the financial year andit has not incurred cash losses in the current and immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, thecompany has not defaulted in repayment of dues to bank and financial institution. Thecompany has not borrowed any sums by way of debentures.

12. According to the information and explanations given to us and based on thedocuments and records produced to us, the company has not granted any loans and advanceson the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or a nidhi/mutual benefitfund/society.

14. In our opinion, the company is not dealing in or trading in shares, securities,debentures and other investments.

Accordingly the provisions of paragraph 4(xiv) of the Order are not applicable.

15. The company has not given any guarantee for loans taken by others from bank orfinancial institutions.

16. In our opinion and according to the information and explanations given to us, theterm loans taken by the company were applied for the purpose for which the loans wereobtained.

17. According to the information and explanations given to us, and on an overallexamination of the balance sheet of the company, we are of opinion that there are no fundsraised on short-term basis that have been used for long-term investment.

18. According to information and explanation given to us, the company has not madepreferential allotment of shares to parties covered in the register maintained undersection 301 of the Companies Act,1956.

19 The company has not issued any debentures. Accordingly, paragraph 4(xix) of theOrder is not applicable.

20 The management has disclosed the end use of money raised by public issue in note 16of Schedule 18(C) and the same has been verified by us.

21. During the course of our examination of the books and records of the Company, andaccording to the information and explanations given to us by the management, we reportthat no material fraud on or by the Company has been noticed or reported during the courseof our audit.