1.  We have audited the attached Balance Sheet of Allcargo Global
 Logistics Limited as at December 3 I, 2010 and also the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto. These financial statements are the
 responsibility of the Companys management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We have 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 misstatements. 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 well as evaluation of the overall financial statement
 presentation. We believe that our audit provides a reasonable
 basisforouropinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (the
 Order), as amended, issued by the Central Government of India in terms
 of sub-section (4A) of Section 227 of the Companies Act, 1956 (the
 Act), we give in the Annexure, a statement on the matters specified in
 paragraphs 4 and 5 of the said Order.
 
 4.  Furtherto our comments in the annexure referred to in paragraph 3
 above, we report that:
 
 i. We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary forthe purpose of the
 audit;
 
 ii. In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from ourexamination ofthose
 books;
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv. In our opinion the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement, dealt with by this report, comply with the Accounting
 Standards referred to in the Companies (Accounting Standard) Rules,
 2006, issued by Central Government, read together with sub-section (3C)
 of Section 21 I ofthe Companies Act, 1956;
 
 v. In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto, give in the prescribed
 manner, the information required by the Companies Act, 1956 and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India :
 
 a.  in the case ofthe balance sheet, ofthe state of affairs ofthe
 Company as at December 3 1, 2010;
 
 b.  in the case ofthe profit and loss account, ofthe profit for the
 year ended on that date; and
 
 c.  in the case ofthe cash flow statement, ofthe cash flows forthe year
 ended on that date.
 
 5.  On the basis of written representations received from the directors
 and taken on record by the Board of Directors, we report that none
 ofthe Directors is disqualified as on December 31, 2010 from being
 appointed as a director in terms of clause (g) of sub-section (I )of
 Section 274 ofthe Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 i) a.  The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b.  All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification, which
 in our opinion is reasonable having regard to the size of the Company
 and the nature of its assets. No material discrepancies were noticed on
 such verification.
 
 c.  Fixed Assets disposed off duringthe year were not substantial and
 therefore do not affect the going concern assumption.
 
 ii) a.  Inventory has been physically verified by the management during
 the year. In our opinion, the frequency of verification is reasonable.
 
 b.  The procedures of physical verification of inventory 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 is maintaining proper records of inventories and no
 material discrepancies were noticed on physical verification.
 
 iii) According to the information and explanations given to us, the
 Company has neither granted nortaken any loans secured or unsecured, to
 or from companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly
 provisions of clause (iii) b, (iii) c, (iii) d, (iii) f and (iii) g of
 the Order are not applicable..
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of fixed assets and with regard to
 sale of goods and supply of services. Duringthe course of the audit, we
 have not observed any continuing failure to correct major weaknesses in
 internal controls.
 
 v) a. According to the information and explanations given to us, we are
 of the opinion that the 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 contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party duringthe year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 vi) As the Company has not accepted any deposits from the public,
 paragraph 4 (vi)ofthe Order is not applicable.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (I) of Section 209 of the Companies Act, 1956 forthe
 products of the Company.
 
 ix) a. According to the records examined by us, the Company is
 generally regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employees
 State Insurance, Income-tax, Wealth tax, Sales tax, Service tax,
 Customs duty, Excise duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 b. According to the information and explanation given to us, and the
 records examined by us, there are no dues of Income tax, Sales tax,
 Customs duty, Wealth tax, Excise duty, Service tax or Cess which have
 not been deposited on account of any dispute, other than those stated
 hereunder:
 
                     Period to which the        Amount Disputed 
 Sr. 
 No Name
 of the Statute      amount relates             Rs. in thousands
 
   Income Tax Act    Assessment years                672,860
 
                     2003-04, 2004-05,
                     2005-06, 2006-07, 2007-08,
                     2008-09 and 2009-10
 
 
 
 Name                 Amount Paid                  Forum where
                      Rs. in thousands                  pending
 
 Income Tax Act         125,000                  Appellate Authority
                                                 upto Tribunal Level
 
 x) The Company does not have accumulated losses as at the end of the
 year and the Company has not incurred cash losses duringthe current and
 the immediately precedingfinancial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, bank or debenture holders.
 
 xii) 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) ofthe Order is not applicable.
 
 xiii) As the Company is not a chit fund/nidhi/mutual benefit
 fund/society to which the provisions of special statute relating to
 chit fund are applicable, paragraph 4(xiii) ofthe Order is not
 applicable.
 
 xiv) In our opinion, the Company has maintained proper records ofthe
 transactions and contracts in respect of investments purchased and sold
 during the year and timely entries have been made therein. The
 investments made by the Company are held in its own name except
 investments of Rs.4,500 thousand and Rs.I9I,3I7 thousand continued to be
 held in the name of demerged entity and merged entity respectively.
 
 xv) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest ofthe Company.
 
 xvi) In ouropinion, the term loans have been applied forthe purpose for
 which they were raised.
 
 xvii) According to the information and explanations given to us and on
 an overall examination ofthe balance sheet and cashflows ofthe Company,
 we report that funds raised on short-term basis have not been used for
 long-term investment. No long-term funds have been used to finance
 short-term assets except permanent working capital.
 
 xviii) The Company has not made preferential allotment of shares to
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956.
 
 xix) The Company did not have any outstanding debentures duringthe
 year. Accordingly, paragraph 4 (xix) ofthe Order is not applicable.
 
 xx) The Company has not raised any money through a public issue
 duringthe year.
 
 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 duringthe course of our audit
 forthe year ended December 31, 2010.
 
                                   For Appan & Lokhandwala Associates
 
                                                Chartered Accountants
                                          (Registration No.: 117040W)
 
                                                       SR Palaniappan
 
 Place: Mumbai                                                Partner
 
 Dated: April 05, 2011                           Membership No. 38378