Yuvraj International Ltd

TO

THE MEMBERS of YUVRAJ INTERNATIONAL LIMITED

We have audited the attached Balance Sheet of YUVRAJ INTERNATIONAL LIMITED as at 31^st March 2009 and also the Profit & Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as ill as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, as amended, issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in the paragraph 4 and 5 of the said order.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief are necessary for the purposes of our audit;

b. In our opinion, the Company has kept proper Books of Account as required by law so far, as appears from our examination of the Books of the Company;

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the Books of Accounts of the Company;

d. In our opinion, the Profit and Loss Account and Balance Sheet comply with the Accounting Standards referred to in the sub-section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors, as on 31^st March 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31^st March 2009 from being appointed as a director 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 explanations given to us, the said accounts read together with the Notes thereon 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 accounting principles generally accepted in India:

a. In case of the Balance Sheet of the state of affairs of the Company as at 31^st March, 2009;

b. In case of the Profit & Loss Account of the Loss of the Company for the year ended on that date.

c. In case of the Cash Flow Statement of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

Annexure referred to in the Auditors' report to the members of Yuvraj International Limited for the year ended March 31, 2009. We report that:

I) There are no Fixed Assets held by the company. Hence the question of Physical verification does not arise. The Management is hopeful of reviving business and is working on new business plans.

II) No inventory is held by the company and hence the question of reporting on physical verification of inventory or maintenance of records does not arise.

III) The company has not granted loans to companies, firms or other parties covered in the registers maintained under Section 301 of the Companies Act, 1956.

IV) No business activity is carried on during the year, we are unable to form an opinion on the internal control procedures of the Company and the nature of its business.

V) In our opinion and according to the information and explanations given to us, there were no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

VI) The company has not accepted any deposit from the public and hence the question of applicability of directives issued by the Reserve Bank of India and the provisions of section 58 A & 58 AA of the Companies Act, 1956 & the rules framed there under, does not arise.

VII) In our opinion, based on the information & explanations given to us, the company does not seem to have an internal audit system commensurate with its size and nature of its business operations.

VIII) Maintenance of cost records has not been prescribed by the Central Government.

IX) The Income Tax Department has raised a penalty demand of Rs. 9,08,762/-against the company for A.Y. 2001-02, against which the company has preferred a appeal with the CIT (A) and the matter is pending with the Appellate Authority. The Company has provided Rs.6,77,137/- towards Income Tax and the same is still unpaid.

X) The Company has accumulated losses to the extent of Rs. 1,442 Lakhs and it has exceeded 50% of the net worth. The company has also incurred cash loss of Rs. 31,850/- during the year under consideration which is mainly due to legal expenses and cash loss of Rs. 1,88,652/- during the year immediately preceding the financial year.

XI) The company has defaulted in repayment of Rs.9.90 Crores (as restated during the year) in respect of loans including interest to State Bank of Saurashtra and Jankalyan Sahakari Bank Ltd. dues to Banks, which are shown outstanding in the Balance Sheet. These loans are NPA for the Bank. The company has not provided for any interest on the loans outstanding as on 31^st March, 2009, as the same has not been charged by the bank. (Refer Note 11 of Schedule 'L' - Notes to Accounts).

XII) According to the information & explanations given to us & based on the documents and records produced before us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. As such the question of maintenance of documents and records does not arise.

XIII) In our opinion the company is not a chit fund, nidhi or mutual benefit fund, society. Therefore the provisions of the clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XIV) In our opinion the Company is not dealing or trading in shares, securities, debentures and other investments, accordingly the provisions of the clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XV) According information and explanations given to us, the company has not given, during the year, any guarantee for loans taken by others from bank or financial institutions. As a result, the question of our commenting Whether the terms &conditions are prejudicial to the interest of the Company does not arise.

XVI) In our opinion & according to information and explanations given to us, the Company has not received any term loans during the year.

XVII) In our opinion & according information and explanations given to us, there were no funds raised during the year.

XVIII) During the year the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

XIX) During the year the company has not issued any debentures & therefore the question of creating any security in respect thereof does not arise.

XX) During the year the company has not made any public issue & therefore the question of disclosing the end use of money raised by public issue does not arise.

XXI) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.