1.  We have audited the attached balance sheet of BALAJI GALVANISING
 INDUSTRIES LIMITED as at 31st March, 2011, the profit & loss account
 and also the cash flow statement of the company 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 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 (Auditor''s Report) Order, 2003 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
 as we considered appropriate and according to the information and
 explanations given to us, 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:
 
 i. We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 ii. In our opinion, proper books of account as required by iaw have
 been kept by the company, so far as appears from our examination of
 those books;
 
 iii. The balance sheet, profit & loss account and the cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 iv. In our opinion, the balance sheet, profit & loss account and the
 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;
 
 v On the basis of written representations received from the directors,
 as on 31st March, 2011, and taken on record by the Board of Directors,
 we report that none of the directors of the company is disqualified 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 Companies Act,
 1956;
 
 vi. Advances, creditors and other liabilities include certain old
 balances which require review, re- calculation and adjustments. In the
 absence of the same, consequential adjustments are not carried out in
 the books of accounts. The relevant impact on the accounts is not
 ascertainable.
 
 vii. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 significant accounting policies and other 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, subject to note
 no.4(vi)
 
 a) in the case of the balance sheet, of the state of affairs of the
 company as at 31st March, 2011;
 
 b) in the case of the profit & loss account, of the profit for the year
 ended on that date; and
 
 c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO AUDITOR''S REPORT
 
 (Referred to in paragraph 3 of our Report of Even date)
 
 1a. The company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b.  As explained to us, the fixed assets have been physically verified
 by the management during the year and no material discrepancies were
 noticed on such physical verification.
 
 c.  During the year the company has not disposed off any
 substantial/major part of fixed assets.
 
 2a. As explained to us, the inventory has been physically verified by
 the management at regular intervals during the year. 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 inventory
 followed by the management are reasonable and adequate in relation to
 size of the company and the nature of its business.
 
 c.  The company has maintained proper records of inventory and
 discrepancies between the physical inventory and the book records,
 which have been properly dealt with in the books of account, were not
 material.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 company to/from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956:
 
 a.  The company has not granted any loan but has accepted loan from a
 company covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was Rs
 39.93 lacs and the year end balance of loan taken from such party was
 Rs. Nil.
 
 b.  In our opinion and according to the information and explanations
 given to us, the rate of interest, wherever applicable and other terms
 and conditions on which such loan has been taken are not prima facie
 prejudicial to the interest of the company.
 
 c.  In respect of loans taken by the company, the interest payments are
 regular and the principal amount has been repaid.
 
 d.  There is no overdue amount in respect of loan taken by the company
 as this loan has been repaid on demand.
 
 4.  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 for the purchase of inventory, fixed assets and also for the
 sale of goods. During the course of our audit, we have not observed any
 major weaknesses in internal controls.
 
 5a. In our opinion and according to the information and explanations
 given to us, the particulars of contracts and arrangements that need to
 be entered into the register maintained under Section 301 of the
 Companies Act, 1956 have been so entered
 
 b. According to the information and explanations given to us, the
 transactions made in pursuance of such contracts have been made at
 prices which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 6.  The company has not accepted any deposits from the public.
 
 7.  In our opinion, the company''s present internal audit system is
 commensurate with its size and nature of its business.
 
 8.  According to the information given to us, the company, being a
 small scale industrial undertaking, it is exempt from maintaining cost
 records under Section 209(1 )(d) of the Companies Act, 1956 for its
 
 9 In respect of statutory dues:
 
 a.  According to the records of the company and as per the information
 and explanations given to us, the company has generally been regular in
 depositing with appropriate authorities undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees'' state insurance, income tax, sales tax, service tax, wealth
 tax, customs duty, excise duty, cess and other material statutory dues
 as are applicable to the company, with the appropriate authorities
 during the year.
 
 b.  According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, service tax, customs duty and cess were in arrears as at 31.03.11
 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 sale tax, income tax, customs duty, wealth tax, service
 tax, excise duty and cess which have not been deposited on account of
 any dispute.
 
 10.  In our opinion, the accumulated losses as at 31st March, 2011 are
 less than fifty percent of its net worth. The company has not incurred
 any cash loss during the financial year covered by our audit and also
 in the immediately preceding financial year.
 
 11.  According to the records of the company examined by us and
 explanations given to us, the company has not defaulted in repayment of
 dues to financial institutions, banks or debenture holders during the
 year.
 
 12.  In our opinion and 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.
 
 13.  The provisions of any special statute applicable to a chit
 fund/nidhi/mutual benefit fund/society are not applicable to the
 company.
 
 14.  In our opinion, the company is not a dealer or trader in shares,
 securities, debentures or other investments.
 
 15.  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 banks or financial Institutions during the year.
 
 16.  The company has not raised any term loan during the year.
 
 17.  On the basis of an overall examination of the balance sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on short term basis
 which have been used for long term investment, and vice versa.
 
 18.  During the year, 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.  The company has not issued any debentures so far.
 
 20.  The company has not raised any money by way of public issue during
 the year.
 
 21 During the course of our examination of the books of account carried
 out in accordance with the generally accepted auditing practices in
 India, we have not come across any instance of fraud on or by the
 company nor have we been informed by the management of any such
 instance being noticed or reported during the year.
 
 Place : Secunderabad                          For Dagliya & Co.,
 
                                               Chartered Accountants,
 
 Date : 31.05.2011                                (F.R.N 671S)
 
                                               (JITENDRA KUMAR JAIN)
 
                                                      Partner
 
                                                    M.No:18398