1.  We have audited the attached Balance Sheet of ACCURATE TRANSFORMERS
 LIMITED as at 31st March, 2010 and also the Profit & Loss Account for
 the year ended on that date annexed thereto and the cash flow statement
 for the year ended on that date. Theses financial statements are the
 responsibility of the Management of the Company. Our responsibility is
 to express an opinion on these financial statements based on our audit.
 
 2.  We conducted our 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
 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 well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of section
 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order to the extent applicable.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 a.  We have obtained all the information and explanation which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b.  In our opinion, subject to paragraph 5.1 and 5.2 below, proper
 books of account as required by law have been kept by the company so
 far as appears from our examination of the books ;
 
 c.  The Balance Sheet and Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 d.  In our opinion, subject to paragraph 5.3 and 5.4, Balance Sheet and
 Profit & Loss Account dealt with by this Report comply with the
 Accounting standards referred to in sub-section (3C) of Section 211 of
 the companies Act, 1956;
 
 e.  On the basis of the written representation received from the
 directors and taken on the record by the Board of Directors, we report
 that none of the director of the Company is disqualified as on 31st
 March, 2010 from being appointed as a director under clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956 with
 reference to the matters relating to the Company;
 
 f. In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts read together with
 accounting policies and notes thereon and attached thereto, give the
 information required by the Companies Act, 1956 in the manner so
 required and subject to our comments in paragraph 5 below, give
 respectively, a true and fair view in conformity with the accounting
 principles generally accepted in India :
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2010; and
 
 (ii) in the case of the Profit & Loss Account, Profit for the year
 ended on that date; and
 
 (iii) in the case of cash flow statement, of the cash flows for the
 year ended on that date.
 
 5.1 Income Tax Authorities has conducted search proceedings under
 section 132 of the Income Tax Act, 1961 on 26th July 2006. The
 Assessment proceeding has been completed. The Company has gone in
 appeal in all cases. Now the matter is pending before CIT (Appeals).
 
 5.2 During the Search Proceedings, the Company has offered Rs. 175 lacs
 as additional income, and the same has been taken into consideration in
 F.Y. 2006-07.  The Company has taken the same under the Head Other
 Income (in F.Y. 2006-07) and corresponding amount has been shown as
 other current assets. The exact of the same would be taken into the
 Accounts when the appeal is decided by CIT (Appeals).
 
 5.3 The liability towards the retirement benefits i.e. gratuity and
 leave encashment was provided by the Company on cash basis, contrary to
 the AS-15, issued by ICAI, the effect of the same is not ascertainable
 as the amount of liability is not available.
 
 5.4 That the company not follows the Accounting Standard (AS-17),
 Segment Reporting as company deals in Manufacturing of the
 Transformers, Trading of Iron & Steel and Electrification Project
 (erection).
 
 Annexure referred to in paragraph (3) of the Auditors Report of even
 date on the accounts of Accurate Transformers Limited for the year
 ended 31st March, 2010.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative detail and situation of fixed
 assets.
 
 (b) The management has carried out a physical verification of most of
 its fixed assets during the year. In our opinion, the frequency of
 verification is reasonable having regard to the size of the Company and
 the nature of its fixed assets. The discrepancies noticed on such
 verification were not material and have been properly dealt with in the
 book of account.
 
 (c) In our opinion and according to the information and explanations
 given to us, during the year there was no substantial disposal of fixed
 assets during the year.
 
 (ii) (a) During the year, the inventories have been physically verified
 by the management except for inventory lying with third parties.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of stocks followed
 by the management are reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 (c) On the basis of our examination of the record of inventories, we
 are of the opinion that, the Company is not maintaining proper records
 of inventories.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured during the
 year to companies, firms or other parties covered in the Register
 maintained under section 301 of the Act during the year.
 
 (b) According to the information and explanations given to us, the
 Company has not taken unsecured loans during the year from the
 companies, firms or other parties covered in the Register maintained
 under section 301 of the Act during the year.
 
 (c) In our opinion, in case of loans, secured or unsecured granted or
 taken to/from companies, firms or other parties covered in the Register
 maintained under section 301 of the Companies Act, 1956 in the previous
 years, we are not making any comments because the terms of repayment
 and/or interest have not been specified.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to the purchase of inventories and fixed assets and with regard to sale
 of goods and services. Further on the basis of our examination and
 according to the information and explanations given to us, we have
 neither come across nor have been informed of any instances of major
 weaknesses in tha aforesaid internal control procedures.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars or arrangement
 referred to in section 301 of the Act transactions that need to be
 entered into the register maintained under section 301 of the Companies
 Act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakh have been entered into
 during the financial year at prices which are reasonable having regard
 to prevailing market price at the relevant time.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not invited deposits from the public.
 
 (vii) In our opinion, the internal audit system of the Company is
 commensurate with its size and nature of its business.
 
 (viii) The company has informed to us to maintain the cost records, in
 pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1 )(d) of the Companies
 Act, 1956. We have not examined the records with a view to determine
 whether they are accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 records of the Company examined by us, the Company is generally regular
 in depositing, except in few cases, undisputed statutory dues including
 employees provident fund, income tax, service tax and other material
 statutory dues applicable to it (Refer note no. 5 (iii) to the schedule
 16).
 
 (b) According to the information and explanations given to us and the
 records of the Company,
 
 (x) According to the information and explanations given to us and the
 records of the Company, the following are the particulars of disputed
 dues on account dues on account of Excise duty, Income Tax, and Sales
 Tax matters that have not been deposited by the company as at March 31,
 2010.
 
 S.  Name of         Nature         Amount     Period to     From where
 No. the Statute      of            (Rs. In    which         dispute is
                     Duties         Lacs)      the amt.        pending
                                               related
 
 1  Central Excise
    Tax            Excise Duty      0.51       2003-04     High Court of
                                                           Allahabad
 
                                  161.00       2002-06   Customs, Excise
                                                         & Service Tax
                                                      Appellate Tribunal
 
                                   36.00       2002-06      Commissioner
                                                               (Appeals)
 
                                   66.28       2008-09      Commissioner
                                                               (Appeals)
 
 2  Income Tax     Income Tax      23.88       2001-02   Commissioner of
                                                         Income Tax
 
                                   15.85       2002-03        -Do-
 
                                   52.87       2003-04        -Do-
 
                                   38.42       2004-05        -Do-
 
                                  136.57       2005-06        -Do-
 
                                  361.78       2006-07        -Do-
 
                                  187.36       2007-08        -Do-
 
 3  Sales Tax      Sales Tax/       0.32       2007-08  Jt. Commissioner
                    VAT                                  (Appeals)
 
                                    1.92       2007-08        -Do-
 
                                    2.40       2008-09  Dy. Commissioner
                                                        (Appeals)
 
                                    1.92       2008-09  Jt. Commissioner
                                                        (Appeals)
 
                                    0.93       2009-10        -Do-
 
                                    0.42       2009-10        -Do-
 
                                    0.68       2009-10        -Do-
 
                                    8.23       2009-10        -Do-
 
                                    0.72       2009-10        -Do-
 
                                    0.33       2009-10        -Do-
 
 (xi) The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses during the financial
 year and in the immediately preceding financial year.
 
 (xii) According to the records of the company examined by us and the
 information and explanations given to us, the Company during the year
 has not defaulted in repayment of dues to financial institution, banks
 or debenture holders.
 
 (xiii) As the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities, paragraph 4 (xii) of the Order is not applicable.
 
 (xiv) The provisions of any special statue as specified under paragraph
 4 (xiii) of the Order are not applicable to the Company.
 
 (xv) As the Company is not dealing or trading in shares, securities,
 debentures and other investments, paragraph 4 (xiv) of the Order is not
 applicable.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from bank or financial institution.
 
 (xvii) In our opinion and according to the information and explanations
 given to us, terms loans were applied for the purpose for which loans
 were obtained.
 
 (xviii) In our opinion and according to the information and
 explanations given to us, funds raised on short term basis have, prima
 facie, not been used during the year for long- term investments.
 
 (xix) As the Company has not made any preferential allotment of shares
 during the year, paragraph 4 (xviii) of the Order is not applicable.
 
 (xx) As the Company has not issued any debentures, paragraph 4 (xix) of
 the Order is not applicable.
 
 (xxi) As the Company has not raised any money by way of public issue,
 paragraph 4 (xx) of the Order is not applicable.
 
 (xxii) 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 course of our audit
 for the year ended March 31, 2010.
 
 FOR S. LAL & COMPANY
 
 Chartered Accountants
 
 Sohan Lal, F.C.A.
 
 Partner
 
 M. No. 017310
 
 Ghaziabad 
 
 Dated : 03.09.2010