We have audited the attached Balance Sheet of Indo Asian Fusegear
 Limited as at 31st March 2011, the 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.
 
 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.
 
 As required by the Companies (Auditors Report) Order, 2003 issued by
 the Central Government in terms of section 227 (4A>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.
 
 Further to ourcomments in the Annexure referred to in paragraph 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 & 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 the
 Cash Flow Statement are in compliance with the mandatory Accounting
 Standards, referred to in Section 211 (3C) of the Companies Act, 1956,
 to the extent applicable.
 
 e) On the basis of the 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 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.
 
 f) 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 and attached thereto 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 Balance Sheet, of the state of affairs of the company
 as at 31st March 2011; ii) in the case of Profit and Loss Account, of
 the profit forthe 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 the Auditors Report on the accounts of Indo Asian Fusegear
 Limited for the year ended 31st March, 2011 as 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) The fixed assets have been physically verified by the management at
 the year-end. We are informed that no material discrepancies have been
 noticed by the management on such verification as compared with the
 record of fixed assets maintained by the Company.
 
 (c) Consequent upon the slump sale of its Switchgear business as stated
 in Note No. 23 of Schedule 18 of the Notes on Accounts, the Company has
 sold its fixed assets at Murthal (excluding Land and Building ), Noida
 and Haridwar during the year covered by our report. According to the
 information & explanations given to us, the company has identified
 business opportunities which are futuristic in technology and have
 substantial growth prospects and where the available funds would be
 deployed. In view of the above, the going concern status of the company
 is not affected.
 
 (ii) (a) The inventory (excluding stocks with third parties) has been
 physically verified by the management during the year. In respect of
 inventories lying with the third parties, these have substantially been
 confirmed by them. In our opinion frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of the inventory followed
 by the management are reasonable and adequate in relation to size of
 the Company and nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stock and
 the book records were not material and have been properly dealt with in
 the books of account.
 
 (iii) (a) The Company has not granted any loan, secured or unsecured,
 to companies, firms or other parties in the register maintained under
 Section 301 of the Companies Act, 1956. Accordingly, clause 3(b), (c)
 and (d) of the Order are not applicable to the Company for the current
 year.  (b) The Company has not taken any loan, secured or unsecured,
 from companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly,
 clause 3(f) and (g)of the Order are not applicable to the Company for
 the current year.  
 
 
 (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 with regard
 to purchases of inventory, fixed assets and with regard to the sale of
 goods. The Company has not undertaken any service activity during the
 year. Further, in our opinion, there is no continuing failure to
 correct major weaknesses in internal control.
 
 
 (v) According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Companies Act, 1956 during the year to be entered in the register
 maintained under that section. Accordingly commenting on transactions
 made in pursuance of such contracts or arrangements does not arise.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted deposits from the public
 during the year within the meaning of Sec 58A & 58AA or any other
 relevant provisions of the Companies Act, 1956 and the rules framed
 thereunder.
 
 (vii) The Company has an internal audit system commensurate with its
 size and nature of its business.
 
 (viii) On the basis of the records produced, we are of the opinion
 that, prima facie, the cost accounting records prescribed by the
 Central Government under section 209(1) (d) of the Companies Act, 1956
 in respect of CFL and Wire units have been maintained by the Company.
 However, we are not required to and have not carried out any detailed
 examination of such records.  
 
 (ix) (a) The Company is generally regular in depositing with
 appropriate authorities undisputed statutory dues including Provident
 Fund, Investor Education Protection Fund, Employees State Insurance,
 Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Custom
 Duty and other statutory dues applicable to it and there are no
 undisputed liabilities as on 31st March 2011 outstanding for a period of
 more than six months from the date they became payable.  
 
 (b) According to the information and explanations given to us, the
 particulars of dues of Excise Duty matters as at 31st March 2011 which
 have not been deposited on account of any dispute are as follows:
 
 Nature of       Demand in       Amount deposited   Period to which 
 Dues            Dispute (Rs.)       (Rs.)          amount relates
 
 Excise Duty      1,810,652          515,000        August, 1998 to
 including Penalty                                  December, 1998
 
 Excise Duty     10,450,866        2,500,000        2007-2008
 including Penalty
 
 Excise Duty     39,484,604             -           May, 2004 to
 including 
 Penalty                                            September, 2004
 
 Excise Duty        568,024             -           April, 2001 to
 including Penalty                                  August, 2004
 
 Total           52,314,146        3,015,000     
 
 
 Nature of Dues               Forum where pending
 
 Excise Duty
 including Penalty         Central Excise and Service Tax
                           Appellate Tribunal, New Delhi
 
 Excise Duty
 including Penalty         Central Excise and Service Tax
                           Appellate Tribunal, New Delhi
 
 Excise Duty
 including Penalty         Central Excise and Service Tax
                           Appellate Tribunal, New Delhi
 
 Excise Duty
 including Penalty         Central Excise and Service Tax
                           Appellate Tribunal, New Delhi
 
 Total
 
 (x) The Company has no accumulated losses as at March 31,2011. The
 Company has not incurred cash losses in the financial year ended on
 that date and in the immediately preceding financial year.
 
 (xi) According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to a financial
 institution or bank.
 
 (xii) According to the information and explanations 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.
 
 (xiii) In our opinion and according to information and explanations
 given to us, the provisions of any special statute applicable to chit
 fund, nidhi, mutual benefit fund, societies are not applicable to the
 Company. Therefore, the provisions of clause 4 (xiii) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the Company.
 
 (xiv) The Company is not dealing or trading in shares, securities,
 debentures and other investments. Therefore, the provisions of clause 4
 (xiv) of the Companies (Auditors Report) Order, 2003 are not
 applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has given Corporate guarantees of Saudi Riyals Five Million
 Five Thousand only to The Saudi British Bank, Riyadh, Saudi Arabia and
 Saudi Riyals Three Million Two Hundred Thousand only to Saudi
 Industrial Development Fund for securing the banking facilities
 extended by it to M/s Saudi National Lamps and Electricals Company
 Limited, a Joint Venture Company in which the Company is having 20%
 ownership interest. The terms and conditions thereof are not
 prejudicial to the interest of the Company.
 
 (xvi) According to the information and explanations given to us, on an
 overall basis, 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, we are
 of the opinion that the Company has not utilized any funds raised from
 short-term sources towards long-term investments.
 
 (xviii) According to the information and explanations given to us, the
 company has made preferential allotment of shares to parties covered in
 the register maintained under Section 301 of the Companies Act, 1956.
 In our opinion, the price at which shares have been issued is not
 prejudicial to the interest of the company.
 
 (xix) The Company has not issued any debentures during the year.
 
 (xx) The Company has not made any public issue during the year.
 
 (xxi) During the course of examination of the books and records of the
 Company, carried out in accordance with the Generally Accepted Auditing
 Practices in India, and according to the information and explanation
 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.
 
                                                  Rajesh Sethi
 
                                                       Partner
 
                                                  M. No. 85669
 
                                         Firm Reg. No: 001111N
 
                                          For and on behalf of
 
 Place : Noida                                 J C Bhalla & Co.
 
 Dated: 19th April, 2011                 Chartered Accountants