1.  We have audited the attached Balance Sheet of ARUNJYOTI ENTERPRISES
 LIMITED, as at March 31, 2011, the Profit and Loss Account and also the
 related Cash Flow Statement 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.
 
 2.  We conducted our audit in accordance with the 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 signifcant 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 (Auditor''s Report) Order, 2003 as
 amended (''the Order'') issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956
 (''the Act''), we enclose in the Annexure, a statement on the matters
 specifed in paragraphs 4 and 5 of the said Order.
 
 4.  Further to 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 for the purposes of our
 audit;
 
 (ii) 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;
 
 (iii) The Balance Sheet, Profit and Loss Accounts 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 Accounts 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 Act.
 
 (v) On the basis of written representations received from the
 directors, as on March 31, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualifed as on
 31st March 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts together with the notes
 thereon give the information required by the Act, in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 (b) In the case of Profit and Loss Account, of the Profit for the year
 ended on that date; and
 
 (c) In the case of the Cash flow Statement, the cash flow for the year
 ended on that date;
 
 Annexure to the Auditors'' Report (referred to in paragraph 3 of our
 Report of even date to the Members of ARUNJYOTI ENTERPRISES LIMITED for
 the year ended March 31, 2011)
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) Fixed Assets have been physically verifed by the management and, in
 our opinion, the verifcation is reasonable having regard to the size of
 the company and the nature of its assets. There is no discrepancies
 were noticed on such verifcation.
 
 (c) No substantial part of fixed assets has been disposed off during the
 year.
 
 2.  (a) The inventory excluding materials in transit, has been
 physically verifed by the management during the year. In our opinion,
 the frequency of the verifcation is reasonable.
 
 (b) In our opinion, procedures of physical verifcation of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the company and nature of the its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the company is maintaining proper records of inventory. In our
 opinion, the discrepancies noticed on physical verifcation of inventory
 as compared to the book records were not material and have been
 properly dealt with in the books of account.
 
 3.  (a) As informed the Company has neither granted nor taken any
 loans, secured or unsecured to and from companies, frms or other
 parties covered in the register maintained under Section 301 of the
 Companies Act, 1956. Accordingly, clauses 4(III) (b) to (d) of the
 Order are not applicable.
 
 (b) The company has not taken any loans, secured or unsecured, from
 companies, frms or other parties covered in the re register maintained
 under Section 301 of the Companies Act, 1956. Accordingly, clauses
 4(III) (f) and (g) of the Order are not applicable.
 
 4.  On the basis of checks carried out during the course of audit and
 as per explanations given to us, we are of the opinion that there are
 adequate internal control procedures commensurate with the size of the
 company and the nature of its business; for the purchases of inventory
 and fixed assets and for the sale of goods. During the course of our
 audit, no major weakness has been noticed in the internal controls.
 
 5.  a) In our opinion and according to the information and explanations
 given to us, we are of the opinion that the transactions that need to
 entered into the register maintained under Section 301 of the Companies
 Act, 1956 have been so entered. Accordingly, clause (v)(b) of paragraph
 4 of the Order is not applicable to the company.
 
 b) In our opinion and according to the information and explanations
 given to us, 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 fve lakhs in
 respect of each party during the year have been made at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposits within the
 meaning of Sections 58A and 58AA of the Companies Act, 1956 and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public.
 
 7.  In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  To the best our knowledge and as explained, the Central Government
 has not prescribed maintenance of cost records under Section 209 (i)
 (d) of the of the Companies Act, 1956 in respect of the Company''s
 nature of business.
 
 9.  (a) According to the records of the company, the company is regular
 in depositing undisputed statutory dues including provident fund,
 employees'' state insurance, Income Tax, Wealth Tax, Customs Duty,
 Excise duty, cess and other material statutory dues applicable at the
 end of the year for a period of more than six months from the date they
 became payable.
 
 (b) According to the information and explanations given to us, there
 are no income tax, wealth tax, sales tax, customs duty and excise duty,
 which have not been deposited on account of any dispute. There were no
 dues on account of cess under 441A of the Companies Act 1956, since the
 date from which the aforesaid section comes into force has not yet been
 notifed by the Central Government.
 
 10.  The company does not have the accumulated losses as at the end of
 the financial year and it has not incurred any cash losses during the
 current financial year covered by our audit and the immediately
 preceding financial year.
 
 11.  Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 company did not have any outstanding dues to financial Institutions,
 Banks or Debenture holders.
 
 12.  According to the information and expiations 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.
 
 13.  In our opinion, the Company is not a chit or a nidhi / mutual
 benefit fund / society.
 
 Therefore, the provisions of clause 4(xiii) of the Order are not
 applicable to the Company.
 
 14.  The company is not in the business of dealing or trading in
 shares, securities, debenture and other instruments. Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable to the
 Company.
 
 15.  The company has not given any guarantee for loans taken by others
 from banks or financial institutions.
 
 16.  The company has not taken term loans from banks.
 
 17.  Based on our examination of the balance sheet of the company as at
 31.03.2011, since there is no loans availed by the company, the
 utilization of funds does not arise.
 
 18.  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.
 
 19.  During the year covered by our audit report, the Company does not
 have any outstanding debentures during the year.
 
 20.  During the year the company has not raised money through the
 Public Issue, the utilization of funds does not arise.
 
 21.  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 M M REDDY & CO.,
 
                                        Chartered Accountants
 
                                        Firm Reg. No. 010371S
 
                                                        Sd/-
 
                                    (CA M. Madhusudhana Reddy)
 
                                                      Partner
                                       Membership no : 213077
 
 Place : Secunderabad
 Date  : 30.05.2011