Anant Raj Industries

1.  We have audited the attached Balance Sheet of Anant Raj industries
 Limited as on March 31, 2009, the related Profit and Loss Account and
 also the Cash Flow Statement for the year ended on that date 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 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
 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 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 by the Companies (Auditors Report) (Amendment) Order, 2004,
 [Order], issued by the Central Government of India in terms of sub-
 section (4A) of section 227 of the Companies Act, 1956 and 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 give in the Annexure a statement on the matters specified in
 paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in 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.
 
 (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
 those books.
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 (d) 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 sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 (e) On the basis of written representations received from the directors
 and taken on record by the Board of Directors, none of the directors is
 disqualified as on March 31, 2009 from being appointed as a director in
 the 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 financial statements read
 together with accounting policies and notes thereon and attached
 thereto give in the prescribed manner the information required by the
 Companies Act, 1956, 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 March 31, 2009; 
 
 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 AUDITORS REPORT
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Anant Raj Industries Limited on the financial statements for
 the year ended March 31, 2009]
 
 i) In respect of fixed assets:
 
 a) The Company is maintaining proper fixed assets records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) The fixed assets were physically verified by the management at
 reasonable intervals during the previous year and no material
 discrepancies were noticed on such verification as compared to book
 records.
 
 c) In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 ii) In respect of inventories:
 
 a) The inventory of raw materials, stores and spares and finished goods
 were physically verified by the management at reasonable intervals
 during the year. The verification of raw materials lying in loose form
 like clay was carried out based upon parameters of volume and weight.
 
 b) In our opinion, 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 inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material and have been properly dealt with in
 the books of account.
 
 iii) a) The Company has granted unsecured loans to 42 (forty two)
 companies covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was
 Rs. 98,483.71 lacs and the yearend balance of loans granted to such
 companies was Rs. 48,476.61 lacs.
 
 b) There are no stipulations as to the rate of interest, repayment or
 other terms and conditions of the loan given by the Company to its
 subsidiaries.  Hence we cannot express an opinion whether the same are
 prima facie prejudicial to the interest of the Company.
 
 c) As per the information and explanations given to us, the aforesaid
 advances taken by the Company were repayable on demand and repayments
 made during the year were as mutually agreed.
 
 d) There is no overdue amount of loans granted to companies, firms or
 other parties listed in the register maintained under section 301 of
 the Companies Act, 1956.
 
 e) The Company has taken unsecured loans from its directors covered in
 the register maintained under section 301 of the Companies Act, 1956.
 The maximum amount involved during the year was Rs. 56.67 lacs and the
 year end balance of loans taken was Nil.
 
 f) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 g) In respect of such unsecured loans taken by the Company, the loan
 amount is payable on demand. The loan taken is interest free.
 
 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 for the
 purchase of inventory, fixed assets and for the sale of goods. Further,
 on the basis of our examination of the books and records of the
 Company, and according to the information and explanations given to us,
 we have neither come across nor have been informed of any continuing
 failure to correct major weaknesses in the aforesaid internal control
 systems.
 
 v) In respect of contracts or arrangements referred to in section 301
 of the Companies Act, 1956:
 
 a) According to the information and explanations given to us, the
 transactions made in pursuance of contracts or arrangements that need
 to be entered in the register maintained under section 301 of the
 Companies Act, 1956, have so been entered.
 
 b) Transactions made in pursuance of such contracts or arrangements
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 vi) The Company has not accepted any deposits from public within the
 meaning of sections 58A, 58AA or any other relevant provisions of the
 Companies Act, 1956 and the rules framed there under.
 
 vii) In our opinion, 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, the
 Central Government has not prescribed the maintenance of cost records
 under clause (d) of sub- section (1) of section 209 of the Companies
 Act, 1956 for the products of the Company.
 
 ix) a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 provident fund, employees state insurance, income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 statutory dues as applicable with the appropriate authorities and there
 was slight delay in deposit in few instances.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees
 state insurance, income tax, sales tax, wealth tax, service tax, custom
 duty, excise duty, cess and other statutory dues were outstanding, as
 at March 31, 2009, for a period of more than six months from the date
 they became payable.
 
 c) According to the information and explanations given to us, there are
 no dues of wealth tax, service tax, custom duty, excise duty and cess
 that have not been deposited with appropriate authorities on account of
 dispute. There are dues of income tax, sales tax and value added tax
 that have not been deposited with appropriate authorities on account of
 dispute. The forum where the disputes are pending are given below:
 
 Name of the          Nature of        Amount          Period to
 Statue               dues               Rs.           which amount
                                                       relates
 
 Haryana              Sales tax      8,550,807         2002-03
 General Sales
 tax Act, 1973
 
 Haryana              Value added    13,164,978        2003-04
 Value Added tax
 Tax Act, 2003
 
 Income tax           Income tax     27,912,346        1997-98
 Act, 1961                                             1998-99
                                                       1999-2000
 Aroum where          Present status as on the date of
 disput is pending    this report
 
 Honble High         Writ petition filed by the
 Court of             Company is pending before
 Punjab &             the Honble High Court of
 Haryana,             Punjab & Haryana, Chandigarh
 Chandigarh
 
 Honble High Court   Writ petition filed by the
 of Punjab &          Company is pending before the
 Haryana,             Honble High Court of Punjab
 Chandigarh           & Haryana, Chandigarh
 
 Honble High Court  Appeal filed by the Company
 of Delhi            is pending before the
                     Honble High Court of 
                     Delhi.
 
 - Amounts are net of payments made and without considering interest for
 the overdue period, if any, as may be levied if demand as raised is
 upheld.
 
 - Excluding interest and additional tax.
 
 x) The Company has no accumulated losses as at the end of the year and
 it has not incurred any cash losses during the financial year covered
 by our audit and in the immediately preceding financial year
 
 xi) According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to its Bankers.
 
 xii) According to the information and explanations given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 xiii) The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/ societies are not applicable to the
 Company.
 
 xiv) According to the information and explanations given to us, the
 Company does not deal or trade in shares, securities or debentures.
 Proper records have been maintained of the transactions and contracts
 in respect of the investments made by the Company.  The investments are
 held by the Company in its own name.
 
 xv) According to the information and explanations given to us, the
 Company has given a guarantee of Rs.  1,500.00 lacs to State Bank of
 India to secure the credit facility extended by the bank to its
 subsidiary, Anant Raj Cons. & Development Pvt. Ltd.
 
 xvi) In our opinion and according to the information and explanations
 given to us, term loans have been applied for the purpose for which
 they were obtained.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, no funds
 raised on a short term basis have been used for long term investment.
 
 xviii) According to the information and explanations given to us, the
 Company has not made any preferential allotment of equity shares to
 parties and companies covered under register maintained under section
 301 of the Companies Act, 1956.
 
 xix) The Company has not issued any debentures during the year.
 
 xx) The Company has not raised any money by way of public issue during
 the year. The funds raised through issue of Global Depository Receipts
 are being utilized for the purpose for which they were raised.
 
 xxi) During the course of our examination of the books and record 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
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 PU-53, Vishakha Enclave                        B. Bhushan & Co.
 Pitam Pura,                                    Chartered Accountants
 New Delhi-110088.                              By the hand of
 
 June 29, 2009                                   Kamal Ahluwalia
                                                 Partner
                                                 Membership no. 093812