1. We have audited the attached Balance sheet of alicon Castalloy limited
 (the Company) as at 31st march, 2011, the profit and loss account and
 the Cash Flow statement for the year ended on that date both 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.
 
 2.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. those standards require that we plan and perform
 audit to obtain reasonable assurance about whether the financial
 statements are free from material misstatement. an audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosure 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 statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.
 
 as required by the Companies (auditor''s report) order, 2003, (as
 amended by DCA notification g.s.r. 766(e), dated November 25, 2004)
 issued by the Central government of India in terms of sub-section (4a)
 of section 227 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 in paragraph (3)
 above, we report that:
 
 a. We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit unless stated otherwise;
 
 b. in our opinion, proper books of account as required by law have been
 kept by the Company so far as appears from our examination of such
 books unless stated otherwise;
 
 c. the Balance sheet, the profit & loss account and the Cash Flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 d. in our opinion, the Balance sheet, the profit & loss account and the
 Cash Flow statement dealt with by this report comply in all material
 respects with the accounting standards
 
 (as) referred to in sub-section (3C) of section 211 of the Companies
 act,1956, unless stated otherwise in statement of significant
 accounting policies and notes to accounts;
 
 e. on the basis of written representations received from the directors
 as at 31st march 2011 and taken on record by the Board of directors, we
 report that none of the directors was disqualified as at 31st march,
 2011 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 explanation given to us, the said accounts read together with and
 subject to significant accounting policies and 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:
 
 i. in the case of the Balance sheet, of the state of affairs of the
 Company as at 31st march, 2011;
 
 ii. in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 iii. in the case of the Cash Flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 on the basis of such checks of the books and records of the Company, as
 we considered appropriate and according to the information and
 explanations given to us, we state that:
 
 I.
 
 a. the Company is maintaining records showing details and situation of
 fixed assets. however, asset numbering exercise is stated to be under
 completion.
 
 b. as explained to us, a major portion of the fixed assets has been
 physically verified by the management during the year in accordance
 with a phased programme of verification which, in our opinion, is
 reasonable having regard to the size of the company and the nature of
 its assets.
 
 c. a substantial part of the fixed assets has not been disposed off
 during the year.
 
 II.
 
 a. the inventories comprising semi-finished goods, raw materials,
 stores and spares have been physically verified by the management at
 the end of each month of the financial year covered by the audit. in
 our opinion, the frequency of verification is reasonable.
 
 b. in our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c. the Company needs to improve its inventory records so as to contain
 all details of each transaction and for each item of the stock. the
 closing inventory is established on the basis of year- end physical
 verification.
 
 III.
 
 a. in our opinion and according to the information and explanations
 given to us, during the year, the Company has not granted any loan,
 secured or unsecured, to companies, firms or other parties listed in
 the register maintained under section 301 of the Companies act, 1956.
 
 b. in our opinion and according to the information and explanations
 given to us, during the year, the Company has not taken any loan,
 secured or unsecured, from companies, firms or other parties listed in
 the register maintained under section 301 of the Companies act, 1956.
 
 I V. in our opinion and according to the information and explanations
 given to us, there exists internal control system commensurate with the
 size of Company and the nature of its business with regard to purchase
 of inventory, fixed assets and for the sale of goods.
 
 V.
 
 a. in our opinion and according to information, explanation and
 management representation provided to us, the particulars of contracts
 or arrangements referred to in section 301 of the Companies act, 1956
 have been entered in the register maintained under that section.
 
 b. according to the information and explanations given to us, the
 transactions in pursuance of such contracts or arrangements and
 exceeding the value of rupees five lacs in respect of any party during
 the year have been made at prices which are prima facie reasonable
 having regard to the prevailing market prices at the relevant time, to
 the extent that such comparative prices are available and where items
 purchased/sold are of special nature for which suitable alternative
 sources do not exist.
 
 VI.
 
 the Company has not accepted any deposit from the public during the
 year.
 
 VII.
 
 the Company has an internal audit system commensurate with its size and
 nature of its business.
 
 VIII.
 
 according to the information and explanations given to us and
 test-verification of records, the Company has initiated the exercise of
 maintaining the cost records required to be maintained under section
 209(1)(d) of the Companies act, 1956. We, however, have not made
 detailed examination of the records.
 
 Ix.
 
 a. Based on test-verification of records and information and
 explanations given to us, the Company is generally regular in
 depositing with appropriate authorities undisputed amount of statutory
 dues including provident Fund, Workmen Compensation, income-tax,
 Wealth-tax sales-tax, Value added tax, Custom duty, excise duty and
 service tax.
 
 b. according to the information and explanations given to us, there are
 no dues payable by the Company under the employees state insurance
 scheme.
 
 c. according to the information and explanations given to us, no
 undisputed materials amounts payable in respect of income-tax, Customs
 duty/ excise duty were in arrears as at 31 march, 2011 for the period
 more than six months from the date they became payable.
 
 d. according to the information and explanations given to us, there are
 no dues, to the extent applicable, of sales-tax,/ income-tax// Customs
 duty/ Wealth tax / excise duty /Cess, which have not been deposited on
 account of any dispute.
 
 x.
 
 the Company does not have any accumulated losses as at the end of the
 financial year under audit. the Company has not incurred cash losses
 during the financial year covered by our audit and in the immediately
 preceding financial year.
 
 xI.
 
 Based on our audit procedures and on the information and explanations
 given by the management, the Company has not defaulted in repayment of
 dues to the banks. the Company has not borrowed money in the form of
 debentures.
 
 xII.
 
 Based on our examination of records and according to the information
 and explanations given to us, the Company has not granted loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 xIII.
 
 the Company is not a chit/nidhi/mutual benefit fund/society and
 therefore provisions of clause 4 (xiii) of the order are not applicable
 to the Company.
 
 xIV.
 
 the Company is not dealing or trading in shares, securities, debentures
 and other investments.
 
 xV.
 
 in our opinion and according to the information and explanations given
 to us, the terms and conditions of the guarantees given by the Company,
 for loans taken by others from banks and financial institutions during
 the year, are not prejudicial to the interest of the Company.
 
 xVI.
 
 in our opinion and according to the information and explanations given
 to us and on overall examination of the Balance sheet of the Company,
 we report that, the term loans have prima-facie been applied for the
 purpose for which they were obtained.
 
 xVII.
 
 according to the information and explanation given to us, management
 representations and on overall examination of the balance sheet of the
 Company read with notes there upon, we are of the opinion that no funds
 raised on short-term basis have prima facie been used for long-term
 investment. as informed to us, and more appropriately explained in
 notes to accounts, overseas group payables classified under current
 liabilities, have not been considered as short-term for reporting under
 this clause.
 
 xVIII.
 
 during the year under audit, the Company has not made any preferential
 allotment of shares to parties and companies covered in the register
 maintained under section 301 of the act.
 
 xix.
 
 the Company did not have any outstanding debentures at the year-end.
 
 xx.
 
 the Company has not raised any money by public issues during the year
 under audit.
 
 xxi.
 
 during the course of our examination of the books and records of the
 Company, carried out in accordance with the generally accepted auditing
 practices in India, and according to the information and explanations
 given to us, we have neither come across any instance of material fraud
 on or by the Company, noticed or reported during the year, nor have we
 been informed of such case by the management.
 
 
 
 For Asit Mehta & Associates
 
 Chartered accountants
 
 Firm regn no. 100733W
 
 Sanjay Rane
 
 partner
 
 membership no 100374
 
 Place: shikrapur
 
 Date: may 13, 2011