Surana Ventures Ltd

THE SHAREHOLDERS

1. We have audited the attached Balance Sheet of Surana Ventures Limited as at31^st March 2011, the Profit and Loss Account and also the Cash FlowStatement for the year ended on that date annexed thereto. These financial statements arethe responsibility of the Company's Management. Our responsibility is to express anopinion on theses financial statements based on our audit.

2. We conduct our audit in accordance with the 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 mistatement. Anaudit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order,2003 as amended by theCompanies (Auditor's Report) (Amendment) Order, 2004 (Together henceforth referred to asthe 'Order' issued by the Central Government of India in terms of sub-section (4A) ofSection 227 of the Companies Act 1956 (henceforth referred to as the 'Act') is givenbelow.

A. Fixed Assets : Clause 4(i) of the Order

i. The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.

ii. We are informed that management has conducted verification of significant partfixed assets during the course of the year. As per the information and explanations givento us the discrepancies found on such verification are not material.

iii. No fixed assets were disposed of during the year by the company.

B. Inventories : Clause 4(ii) of the Order

i. The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable.

ii. The procedures of physical verification followed by the management are reasonableand adequate in relation to the size of the company and nature of its business.

iii. The Company is maintaining proper records of inventory. The discrepancies noticedon verification between physical stocks and books records were not material.

C. Loans and Advances & Loans against Pledge of Securities (Clauses 4(iii) of 4(xii) of the Order.

i. The Company has not granted any loans Companies / Firms or Other Parties Listed inthe register maintained under section 301 of the 'Act' Hence we have not reported on thematters coverd under sub-clauses 'a to d' of this clause of the order.

ii. The Company has taken loans from 3 Companies / Parties and other firms coveredunder section 301 of the Act. The Maximum and Year end outstanding was Rs. 3,136.95 Lacsand Rs. 1,222.26 Lacs respectively.

iii. In our opinion, the rate of interest and other terms and conditions on which theloans have been taken from such companies, firms or other parties listed under section 301of the 'Act' are not 'prima facie' prejudicial to the interest of the company.

iv. The company is regular in repaying the principal and interest as stipulated in theterms of agreement.

v. We are of the opinion that the company is maintaining adequate records where thecompany has granted loans against security of shares, debentures and other securities.

D. Transactions with parties under section 301 of the Act. Clause 4(v) of the Order:

i. On the basis of our examination of relevant records and on the basis ofrepresentation of the management , we are of the opinion that the particulars of allcontracts or arrangements that need to be entered into the register maintained undersection 301 of the 'Act' have been so entered.

ii. The transactions made in pursuance of such contracts or arrangements have been madeat prices reasonable having to the prevailing market prices at the relevant point of time.

E. Internal Control Clause 4(iv)

In our opinion and according to the information and explanations given to us, thereexists an adequate internal control system commensurate with the size of the Company andnature of its business with regard to purchase of fixed assets and with regard to sale ofservices. During the course of our audit, we have not observed any continuing failure tocorrect weakness in internal control system of the Company.

F. Deposits -Clause 4(vi) of the Order.

During the year the company has not accepted any deposits within the meaning of section58A and section 58AA of the 'Act'.

G. Internal Audit - Clause 4(vii) of the Order.

In our opinion, the Company's internal audit system is commensurate with the size andnature of its business.

H. Cost Records - Clause 4(viii) of the Order

We are informed that the Central Government has not prescribed maintenance of costrecords under section 209(1)d of the 'Act', for the manufacturing activities carried on bythe company during the year.

I. Statutory Payments - Clause 4(ix) of the Order.

i. According to the records of the Company, apart from the certain instances of delaysin depositing undisputed income tax deducted at source, Employee's State Insurance,Provident Fund and Sales tax, the company has been regular in depositing undisputedstatutory dues including Provident fund, Employee State Insurance, Income Tax, Sales Tax,Service Tax, Custom Duty, Excise Duty, cess and other statutory dues with appropriateauthorities.

ii. Based on our audit procedures and according to the information and explanationsgiven to us, there are no arrears of statutory dues which has remained outstanding as at31^st March 2011 for a period of more than six months from the date they becamepayable.

iii. According to the information and explanations given to us and records of theCompany there are no dues of sales tax / income tax / customs duty / wealth tax / servicetax / excise duty / cess, which have not been deposited on account of any dispute.

Further, since the Central Government till date has not prescribed the amount of cesspayable under section 441A of the 'Act', we are not in a position to comment upon theregularity or otherwise of the Company in depositing the same.

J. Losses : Clause 4(x) of the Order

The Company does not have any accumulated losses as at 31^st March 2011. TheCompany has not incurred any cash losses during the financial year covered by our auditand the immediately preceding financial year.

K. Utilisation of Funds : Clause 4(xi), (xvi), (xvii)

i. The Company has not obtained any term loan during the year.

ii. On the basis of review of utilisation of funds, which is based on overallexamination of the Balance Sheet of the Company, related information made available to usand as represented to us by the management, funds raised on short term basis have not beenused for long term investments.

iii. In our opinion and according to the information and explanations given to us, thecompany has not defaulted in repayment of dues to a financial institution, bank ordebenture holders.

L. Miscellaneous : Clause 4(xiii),(xiv),(xv) & (xviii) to (xxi)

i. The Company has not given any Guarantees for loans taken by others from Banks orFinancial Institutions.

ii. The Company is not a chit fund, nidhi / mutual benefit fund and thereforerequirements to such class of companies are not applicable.

iii. The Company is not dealing in or trading in shares, securities debentures andother investments.

iv. The Company has not made any preferential allotment of shares during under section301 of the 'Act'.

v. The Company has not issued any debentures during the year.

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

vii. Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements as the information, representation andexplanations given by the management, we report that no fraud on or by the company hasbeen noticed or reported during the course of our audit.

4. Further to our comments above :

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

ii. In our opinion proper books of account as required by law have been kept by thecompany as 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 Statementdealt with by this report comply with Accounting Standards referred to in section 211(3C)of the 'Act'.

v. On the basis of written representations received from the Directors, as on 31^stMarch 2011 and taken on record by the Board of Directors, we report that none of theDirectors are disqualified as on 31^st March 2011 from being appointed as aDirector in terms of Section 274(1) (g) of the 'Act'.

vi. In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts, together with the Notes thereon and attached thereto, givein the prescribed manner, the information required by the 'Act' , and also give a true andfair view in conformity with accounting principles generally accepted in India.

1. In the case of Balance Seet, the state of affairs of the Company as at 31^stMarch 2011.

2. In the Case of Profit and Loss account the 'Profit' for the year ended on that date.

3. In the case of cash flow statement the Cash flows for the year ended on that date.

For Sekhar & Co.,

Chartered Accountants.

Firm Regn No : 003695-S