Fusion Fittings (I) Ltd

To the Members of

Fusion Fittings (India) Limited.

New Delhi

1. We have audited the attached Balance Sheet of Fusion Fittings (India) Ltd as at 31^stMarch, 2010 together with the Profit & Loss Account and the Cash Flow Statement forthe year ended on 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.

2. 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 the management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovernment of India in terms of sub-section (4A) of section 227 of the Companies Act,1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5of 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 ourknowledge and belief were necessary for the purpose of our audit ;

b) In our opinion, proper books of accounts as required by law have been kept by thecompany, so far as appears from our examination of the books;

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and the 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;

e) On the basis of the written representations received from the directors as on 31^stMarch, 2010 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31^st March, 2010 from being appointed as adirector in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act,1956;

f) In our opinion and to the best of our information and according to the explanationsgiven to us, the Balance Sheet and the Profit & Loss Account read with the Schedulesand Notes thereon, give the information required by the Companies Act, 1956 in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31^stMarch, 2010;

ii) in the case of the Profit and Loss Account, of the profit for the year ended onthat date; and

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

Annexure to the Auditor's report

Annexure referred to in paragraph (3) of the Auditor's Report of even date to theMembers of Fusion Fittings (India) Ltd for the year ended 31^st March, 2010.

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

(b) As explained to us, the fixed assets have been physically verified by themanagement during the year in a phased periodical manner, which in our opinion isreasonable having regard to the size of the company and nature of its assets. No materialdiscrepancies between the book records and the physical inventory were noticed in respectof the assets physically verified.

(c) In our opinion, the company has not disposed off substantial part of fixed assetsduring the year and the going concern status of the company is not affected.

2 The company had no inventory.

3 (a) The company has not granted any loans, secured or unsecured, to any company, firmor other party covered in the register maintained under section 301 of the Companies Act,1956.

(b) The company has taken unsecured, interest free loan from one company covered in theregister maintained under section 301 of the Companies Act, 1956. The aggregate amount ofloans taken at year end and aggregate maximum outstanding balance at any time during theyear amounted to Rs. NIL and Rs.20,41,242.64 respectively.

(c) In our opinion and according to information and explanations given to us the termsand conditions of interest free loan obtained are not prima facie prejudicial to theinterest of the company.

(d) In respect of loan taken by the company the interest payment and principal amountrepayable are regular.

4 In our opinion and according to the information and explanations given to us, thereare adequate internal control systems commensurate with the size of the Company and thenature of its business with regard to purchase of inventory and fixed assets and for thesale of goods and services. During the course of our audit, no major weakness has beennoticed in the internal control system in respect of these areas.

5 (a) According to the information and explanations given to us, we are of the opinion,that the transactions that needed to be entered into the register maintained under section301 of the Companies Act, 1956 have been so entered, (b) In our opinion and according tothe information and explanations given to us, the transactions made in pursuance ofcontracts or arrangement entered in the register maintained under section 301 of theCompanies Act,1956 exceeding the value of Rupees five lakhs in respect of any party duringthe year have been made at prices, which are reasonable having regard to the prevailingmarket prices at the relevant time.

6 The Company has not accepted any deposits from the public to which the provisions ofSection 58A & Section 58AA or any other relevant provisions of the Companies Act, 1956and the Rules framed there under apply.

7 The Company did not have any internal audit system.

8 To the best of our knowledge and according to the information and explanations givento us, the Central Government has not prescribed the maintenance of cost records underSection 209(1) (d) of the Companies Act, 1956.

9 (i) 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 have been regularlydeposited with the appropriate authorities.

(ii) According to the information and explanations given to us, no undisputed amountspayable in respect of Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty, ExciseDuty and Cess were outstanding at the year end for a period of more than six months fromthe date they became payable.

(iii) According to the record of the company and information and explanation given tous, there were no disputed dues outstanding as at 31^st March, 2010 in respectof Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess.

10 The company has no accumulated losses as at 31^st March 2010. The companyhas not incurred cash losses during the year nor in the immediately preceding financialyear.

11 In our opinion and according to the information and explanation given to us, thecompany has not defaulted in repayment of dues to financial institutions, bank ordebenture holder.

12 According to the information and explanations given to us, the Company has notgranted any loans and advances on 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. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor'sReport) Order, 2003 are not applicable to the company.

14 In our opinion, the company is not dealing in or trading in shares, securities,debentures and other investments. Accordingly, the provisions of clause 4(xiv) of theCompanies (Auditor's Report) Order, 2003 are not applicable to the company.

15 In our opinion and according to the information and explanation given to us, theterm and conditions on which the company has given guarantees for loans taken by others(subsidiary upto 30.03.2010) from banks or financial institutions are not prejudicial tothe interest of the company.

16 The company has not raised any term loan during the year.

17 According to the information and explanations given to us and on an overallexamination of the Balance Sheet and Cash Flow Statement of the company, we report that nofunds raised on short-term basis have been used for long term investments.

18 The company has not made any preferential allotment of shares to parties orcompanies covered in the register maintained under section 301 of the Companies Act, 1956,during the year.

19 No secured debenture were issued by the company. Therefore, no securities have beencreated.

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

21 According to the information and explanation given to us, no fraud on or by theCompany has been noticed or reported during the year.