1.  We have audited the attached Balance Sheet of Birla Machining &
 Toolings Limited (Formerly Dagger Forst Tools Limited), as at 31st
 March 2011, and also the Profit and Loss Account and the 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 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 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.  Without qualifying our opinion, we invite attention to the
 following notes to Schedule “19” :
 
 1) note no 8 regarding delay in project implementation and capital
 expenditures (including project advances) amounting to Rs.9,50,40,090.
 No provision for impairment is considered necessary based on the
 representation given by the management.
 
 2) note no 11 regarding the Company having sold all its undertakings
 and preparing the accounts on going concern basis, as explained in note
 mentioned therein.
 
 4.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) issued by Central Government of India in terms of Section
 227(4A) of the Companies Act 1956, we give in the Annexure hereto a
 statement on the matters specified in the paragraphs 4 and 5 of the
 said order, to the extent applicable to the Company.
 
 5.  Further to our comments in the Annexure referred to in paragraph
 (3) above, we state that:- a) 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;
 
 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 the
 books;
 
 c) the Balance Sheet, Profit & 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 & Loss Account and Cash
 Flow Statement dealt with by this report are in compliance with the
 Accounting Standards referred to in sub section (3C) of Section 211 of
 the Companies Act, 1956;
 
 e) On the basis of written representation 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 of the Company are 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;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts together with 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 Loss of the
 Company for the year ended on that date; and (iii) In the case of 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) i.  a) The
 Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) According to the information and explanation given to us, all the
 fixed assets have been physically verified by the management at
 reasonable interval, which in our opinion is reasonable having regard
 to the size of the Company and nature of its assets. No material
 discrepancies were noticed on such physical verification.
 
 c) In our opinion, the Company has not disposed off substantial part of
 its fixed assets during the year.
 
 ii. As explained to us, there is no physical inventory in existence and
 hence the question of physical verification and comparison with the
 inventory records does not arise.
 
 iii. a) During the year the Company has granted unsecured loans to four
 Companies, covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year is
 aggregating to Rs.13,01,85,958 and year end balance of aforesaid loans
 is amounting to Rs 7,50,00,000.
 
 b) The Company has not taken any loans, secured or unsecured loans from
 the companies, firms or parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 c) In our opinion the rate of interest and other terms and conditions
 of above loans are prima facie not prejudicial to the interest of the
 Company.
 
 d) The principal and interest is payable on demand.
 
 iv. In our opinion and according to the information and explanation
 given to us, there are adequate internal control System commensurate
 with the size of the Company and nature of its business for the
 purchase of fixed assets, sales of goods .The Company has not purchased
 any inventory nor given any services during the year. During the course
 of our audit, we have not observed any continuing failure to correct
 major weaknesses in internal controls System.
 
 v. a) According to information and explanation given to us, we are of
 the opinion that the transactions made in pursuance of contracts or
 arrangement referred to in section 301 of the Companies Act, 1956 have
 been entered into a register required to be maintained under that
 section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions of purchase of goods & material and sale
 of goods, materials & services made in pursuance of contracts or
 arrangement required to be entered in the register maintained under
 section 301 of the Companies Act, 1956 aggregating during the year to
 Rs.5,00,000 (Rupees Five Lacs only) or more in respect of each party,
 has been made at prices which are reasonable having regard to the
 prevailing market prices.
 
 vi. The Company has not accepted deposits from public, hence directives
 issued by the Reserve Bank of India and the provisions of section 58A
 and 58AA or any other relevant provisions of the Companies Act, 1956
 and rules framed there under are not applicable for the year under
 audit.
 
 vii.  In our opinion, the company internal audit system is commensurate
 with its size and nature of business.
 
 viii. The Central Government has not prescribed maintenance of cost
 records under section 209(1)(d) of the Companies Act, 1956 in respect
 of activities carried on by the Company. hence the provisions of clause
 4 (viii) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the Company.
 
 ix. a) According to the records of the Company, undisputed statutory
 dues, including Provident Fund, employees State Insurance Dues,
 Investor education and Protection Fund, Income Tax, sales Tax, Wealth
 Tax, Service Tax, Custom Duty, excise duty, Cess and other material
 statutory dues have generally been regularly deposited, by the Company
 during the year with the appropriate authorities in India. According to
 the information and explanation given to us, no undisputed amounts
 payable in respect of the aforesaid dues were outstanding as at March
 31, 2011 for a period of more than six months from the date of becoming
 payable. .
 
 b) As at March 31, 2011, there have been no disputed dues which have
 not been deposited with the respective authorities in respect of Income
 Tax, Custom Duty, Wealth Tax, Service Tax, excise duty and Cess other
 than the following:
 
 Name of Statute     Nature of the   Amount (Rs. )  Period 
                                                    to which  Forum where
                                                              dispute is 
                                                              pending
                       dues                         amount 
                                                    relates
 
 Central excise Act  Service Tax     13,76,365    2006-07 to
                                                  2007-08    Commissioner  
                                                             of Central 
                                                             excise
                                                             Aurangabad
 Sales Tax Act       BST and CST     70,09,147    2004-05    Joint 
                                                             Commissioner  
                                                             of Sales Tax  
                                                             (Appeals)
                                                             Aurangabad
 
 x. In our Opinion, the accumulated losses of the Company are not more
 than fifty percent of it''s net worth as at March 31, 2011, and the
 Company has incurred cash loss during the financial year and in the
 immediately preceding financial year.
 
 xi. The Company has not borrowed money from any financial institution
 or bank or by issue of debentures and hence defaulting in repayment of
 its dues does not arise. Accordingly, the provision of clause 4 (xi) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 xii. In our opinion and according to the information and explanation
 given by us, no loans and advances have been granted by the Company on
 the basis of the security by way of pledge of shares, debentures and
 other securities.
 
 xiii. In our opinion, the Company is not a chit fund, a nidhi or a
 mutual benefit society. Therefore, the provision of clause 4 (xiv) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 xiv. In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provision of clause 4 (xix) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 xv. According to the information and explanation given by the
 management, there is no outstanding guarantee given by the Company for
 loan taken by others from banks or financial institution. Therefore,
 the provision of clause 4 (xv) of the Companies (Auditor''s Report)
 Order, 2003 are not applicable to the Company.
 
 xvi. According to the information and explanations given to us, the
 company has not accepted any term loan during the year. Therefore, the
 provision of clause 4 (xvi) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 xvii. According to information and explanation given to us and on an
 overall examination of the Balance Sheet of the Company as at 31st
 March, 2011, no funds raised on short-term basis have been used for
 long-term investment.
 
 xviii. According to the information and explanation given to us, the
 Company has not made preferential allotment of shares to parties and
 companies, covered in the register maintained under section 301 of the
 Companies Act, 1956. Therefore, the provisions of clause 4(xviii) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company.
 
 xix. The Company has not issued any debentures, hence clause 4(xix) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 xx. We have verified the end use of money raised by right – cum –
 public issue and the same has been disclosed in the notes to the
 financial statements (Refer note no.3 of Schedule 19).
 
 xxi. According to the information and explanation given to us, no fraud
 on or the Company has been noticed or reported during the year.
 
 For CHATURVEDI & SHAH 
 Chartered Accountants 
 Registration No:101720W
 
 PARAG D. MEHTA
 
 Partner
 
 Membership No.: 113904
 
 Place: Mumbai
 
 Dated: 8th August, 2011