1.  We have audited the attached Balance Sheet of ELECON ENGINEERING
 COMPANY LIMITED as at March 31st, 2011 and also the Profit and Loss
 Account and 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 the 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 amended Companies (Auditors'' Report) Order, 2003
 issued by the Central Government of India in terms of Sub-Section (4A)
 of Section 227 of the Companies Act, 1956, we annex hereto a statement
 on the matters specified 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:
 
 (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 the law
 have been kept by the Company so far as it 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 applicable
 Accounting Standards referred to in Sub-Section (3C) of Section 211 of
 the Companies Act, 1956;
 
 (e) Based on representations made by all the Directors of the Company
 as on 31st March, 2011 and taken on record by the Board of Directors of
 the Company and according to the information and explanations made
 available to us by the Company, none of the Directors of the Company
 has any disqualification as referred to in Clause (g) of Sub-Section
 (1) to Section 274 of the Companies Act, 1956; and
 
 (f) 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
 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 March 31, 2011;
 
 (ii) In the case of the Profit and Loss Account, of the Profit of the
 Company 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 THE AUDITORS'' 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 its fixed
 assets.
 
 (b) Certain items of Plant and Machineries were physically verified by
 the management during the year in accordance with a programme of
 verification, which in our opinion provides for physical verification
 of all the fixed assets at reasonable intervals. According to the
 information and explanations given to us no material discrepancies were
 noticed on such verification.
 
 (c) The Company has not disposed off a substantial part of the fixed
 assets during the year under review. Therefore, going concern status of
 the Company has not been affected.
 
 (ii) (a) As explained to us, inventories were physically verified by
 the management during the year.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and discrepancies noticed on physical verification have
 been properly dealt with in the books of account of the Company.
 
 (iii) (a) According to the information & explanations given to us, the
 Company has not granted any secured or unsecured loan to any party
 listed in the register maintained under Section 301 of the Companies
 Act, 1956.
 
 (b) In view of clause (iii) (a) above, this clause regarding interest
 and other terms and conditions is not applicable.
 
 (c) In view of clause (iii) (a) above, this clause regarding repayment
 of loan and interest thereon is not applicable.
 
 (d) In view of (iii) (a) above, this clause regarding overdue amounts
 of such loans and interest thereon is not applicable.
 
 (e) According to the information & explanations given to us, the
 Company has not taken any loan from any party listed in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 (f) In view of clause (iii) (e) above, this clause regarding interest
 and other terms and conditions is not applicable.
 
 (g) In view of clause (iii) (e) above, this clause regarding repayment
 of loan and interest thereon is not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is adequate Internal Control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services.
 
 (v) (a) According to the information and explanations given to us,
 contracts or arrangements with the parties listed in the register
 maintained under Section 301 of the Companies Act, 1956 have been
 entered in the register upon ratification of the same by the Board of
 Directors of the Company.
 
 (b) We are informed that in case of the transactions with the parties
 listed in the register maintained under Section 301 of the Companies
 Act, 1956 no comparison of prices could be made as there was either no
 alternate source of supply or that the management preferred the
 suppliers'' products and services on quality grounds or peculiarity of
 the products sold or services rendered.
 
 (vi) According to the information and explanations given to us,
 applicable provisions of the directives issued by the Reserve Bank of
 India and the provisions of Section 58A, 58AA or other relevant
 provisions of the Companies Act, 1956 and the rules framed thereunder
 have been complied with in respect of the deposits accepted by the
 Company during the year under review.
 
 (vii) The Company has appointed a firm of Chartered Accountants to
 carry out Internal Audit work. The said Internal Audit system operating
 in the Company commensurate with the size of the Company and nature of
 its business.
 
 (viii) According to the information and explanations given to us, the
 Central Government has not prescribed maintenance of cost records under
 Section 209(1 )(d) of the Companies Act, 1956 in respect of any of the
 products of the Company.
 
 (ix) (a) According to the records of the Company, undisputed statutory
 dues including Provident Fund, Investor Education & Protection Fund,
 Employees'' State Insurance, Income Tax, Wealth Tax, Sales Tax, Custom
 Duty, Excise Duty, Service Tax, Cess and other statutory dues have been
 regularly deposited during the period with appropriate authorities.
 There was no outstanding statutory dues as at the end of the year
 outstanding for a period of more than six months from the date they
 became payable.
 
 (b) According to information and explanations given to us, the Company
 has not paid the following statutory dues on account of the demand
 being disputed by the Company.
 
 Sr. No.  Nature of liability Amt. (Rs. in Lacs) Pending Before
 
 1.  Excise Duty, Penalties & Interest thereon 146.49 C.E.S.T.A.T.
 
 2.  Excise Duty, Penalties & Interest thereon 122.89 Central Excise
 
 Commissioner (Appeal)
 
 3.  Sales Tax, Purchase Tax, Works Contract Tax and 347.55 Orissa State
 Sales Interest & Penalty thereon Tax Appellate Tribunal
 
 (x) According to the records of the Company, it has no accumulated
 losses. The Company has not incurred cash losses during the financial
 year under review or during the immediately preceding financial year.
 
 (xi) According to our audit procedure and on the basis of information
 and explanations given by the management, the Company has not defaulted
 in repayment of dues to any Financial Institution or Bank. The Company
 has not issued any Debentures.
 
 (xii) According to our audit procedure and on the basis of information
 & explanations given to us, the Company has not granted any loan on the
 basis of security by way of pledge of shares, debentures and other
 securities. Therefore, the question of adequacy or otherwise of
 maintenance of documents and records in respect thereof does not arise.
 
 (xiii) According to our audit procedure and on the basis of information
 & explanations given to us, the Company has not indulged in any chit
 fund activity during the year under review. Therefore, the question of
 compliance with provisions of any special statute applicable to chit
 fund does not arise.
 
 (xiv) According to our audit procedure and on the basis of information
 & explanations given to us, the Company has not indulged in dealing or
 trading in shares, securities, debentures and other investments. In
 respect of long term investments made by the Company, according to the
 information and explanations given to us, all the investments have been
 held in the name of the Company only.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantee for loans taken by others from Banks or Financial
 Institutions are prima-facie not prejudicial to the interest of the
 Company.
 
 (xvi) In our opinion and according to the information & explanations
 given to us, the term loans obtained during the year under review have
 been applied for the purpose for which they were raised.
 
 (xvii) In our opinion and according to the information & explanations
 given to us, and on an overall examination of the Balance Sheet of the
 Company, we report that no funds raised on short-term basis have been
 used for long-term investment.
 
 (xviii) According to our audit procedure and on the basis of
 information & explanations given to us, during the year under review,
 the Company has not made any preferential allotment of shares to the
 parties or Companies listed in the register maintained under Section
 301 of the Companies Act, 1956. Therefore, the question of impact of
 the prices recovered in respect of such shares on the interest of the
 Company does not arise.
 
 (xix) According to our audit procedure and on the basis of information
 & explanations given to us, during the year under review, the Company
 has not issued any secured or unsecured debentures. Therefore, the
 question of creation of securities or charge in respect thereof does
 not arise.
 
 (xx) According to our audit procedure and on the basis of information &
 explanations given to us, during the year under review, the Company has
 not raised any money byway of public issue of shares. Therefore, the
 question of disclosure and verification of end use of money so raised
 does not arise.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statement and as per
 information and explanations given by the management, no material
 frauds on or by the Company were noticed or reported during the year
 under review.
 
                                              For THACKER BUTALA DESAI
                                                 Chartered Accountants
 
                                                           M. T. DESAI
                                                               Partner 
 Place : Navsari                               Membership No. : 030911
 
 Date : 28-05-2011                              Firm Regn. No. 110864W