Tashi India Ltd

We have audited the attached Balance Sheet of Tashi India Limited as on 31st March,2009 and also the Profit and Loss Account of the Company for the year ended on that dateannexed thereto and the Cash Flow Statement for the year ended on that date, which we havesigned under reference to this report. These financial statements are the responsibilityof the Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

1. 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 anddisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

2. As required by the Manufacturing and other Companies (Auditor's Report) Order, 2003and the Companies (Auditor's Report) (Amendment) Order, 2004 issued under the CompaniesAct, 1956, and on the basis of the such checks as we consider appropriate we enclose inthe Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we reportthat;

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 account as required by law has been kept by theCompany so far as appears from our examination of books.

c) The Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt withby this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and the Profit & Loss Account comply with theAccounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act,1956, to the extent applicable and

e) On the basis of the written representation received from the Directors and taken onrecord by the Board of Directors, we report that none of the Directors are disqualified ason 31st March, 2009 from being appointed as Directors in terms of clause (g) ofsub-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 said account together with the notes thereon give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fairview , in conformity with the accounting principles generally accepted in India:

i. In case of the Balance Sheet, of the state of the Company's affairs as at 31stMarch, 2009 and,

ii. In the case of the Profit and Loss Account, of the Profit of the Company for theyear ended on that date.

iii. In the case of Cash Flow Statements of the Cash Flows for the year ended on thatdate

(Referred to in Paragraph 1 of our report of even date)

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

(b) As explained to us, all the fixed assets were physically verified during the yearby the management. According to the information and explanations given to us, no materialdiscrepancies were noticed on such verification.

(c) During the year, in our opinion, a substantial part of fixed assets has not beendisposed off by the Company.

2. (a) As explained to us, the fixed assets were physically verified during the year bythe management. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, theprocedures for physical verification of inventories followed by the management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) According to the information and explanations given to us, in our opinion, theCompany has maintained proper records of inventory. The discrepancies noticed onverification between the physical stocks and the book records were not material, havingregard to the size of the operations of the Company.

3. The Company has not granted or taken any loans, secured or unsecured to / fromcompanies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly sub-clauses (b), (c), (d), (0 and (g) of para 4 (iii)are not applicable.

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 the business with regards to purchases of inventory, fixed assets and withregard to the sale of goods. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in internal controls.

5. Based upon the audit procedures, performed and according to the information andexplanations given to us, there are no transactions that need to be entered into theregister maintained in pursuance of Section 301 of the Companies Act, 1956.

Sub-clause (b) of para 4 (v) is not applicable.

6. The Company has not accepted any deposits from the public to which the provisions ofSection 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules,1975 apply.

7. During the year the Company has no internal audit system, as in the opinion ofmanagement, considering the size and nature of its business and personal supervision bythe Directors, the same is considered to be adequate and commensurate with its size andnature of its business.

8. The Central Government has not prescribed the maintenance of cost records underSection 209(1 )(d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and on the basis ofrecords of the Company, the Company is regular in depositing with appropriate authoritiesundisputed statutory dues, including Provident Fund, Investor Education Protection Fund,Employees' State Insurance, Income-Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty,Excise-Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanation given to us, the disputed statutorydues aggregating to Rs 28.46 lacs, the have not been deposited on account of matterspending before appropriate authority is as under.

10. The Company does not have any accumulated losses and has not incurred cash lossesin the current financial year and in the immediately preceding financial year.

11. The Company has not taken any loans from any Financial Institutions or Banks orDebenture holders.

12. According to the information and explanations given to us, the Company has notgranted any loans or advances on the basis of security by way of pledge of Shares,Debentures and other Securities.

13. The Company is not a chit fund or a nidhi/mutual benefit fund/society.

14. As per the information and explanations given to us, the Company is not dealing ortrading in shares, securities, debentures and other investment. The shares and securitieshave been held in its own name.

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

16. According to the information and explanations given to us, there are no term loansraised by the Company during the year.

17. According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company, in our opinion, no funds raised onshort-term basis have been used for long-term investment.

18. According to the information and explanations given to us, during the year theCompany has not made any preferential allotment of shares to parties and companies coveredin the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the Company has notissued any debentures during the year.

20. According to the information and explanations given to us, the Company has notraised any money through public issues during the year.

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

Looking to the nature of activities being carried on, at present, by the Company andalso considering the nature of matters referred to the various claues of the Companies(Auditor's Report) Order, 2003, and the Companies (Auditors Report) (Amendment) Order2004, Clauses (ii) of paragraph 4 of the aforesaid order is in our opinion, not applicableto the Company.