We have audited the attached Balance Sheet of FRONTLINE CORPORATION
 LIMITED as on 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 Company''s
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 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 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.
 
 In accordance with the provisions of Section 227 of the Companies Act
 1956, we report that:
 
 1.  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, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 2.  Further to our comments in the annexure referred to 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 and proper returns adequate for the purpose of our audit
 have been received from the branches not visited by us. The Report of
 Branch Auditors of Kolkata Division has been forwarded to us and has
 been appropriately dealt with;
 
 (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
 and with the audited reports from the Kolkata Division;
 
 (d) The Balance Sheet, Profit and Loss Account 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 Companies Act, 1956;
 
 (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, read together with the
 notes thereon give the information required by the Companies Act, 1956,
 in the manner so required and give 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 Case of Profit and Loss Account, of the profit for the year 
 ended on that date: and 
 
 iii) In case of the Cash Flow Statement, of the cash flow for the year 
 ended on that date.
 
 Annexure to Auditor''s Report
 
 (Referred to in paragraph 1 of our Report of even date to the members
 of FRONTLINE CORPORATION LIMITED)
 
 (i) In respect of Fixed Assets:
 
 (a) The Company is maintaining fixed assets register showing full
 particulars including quantitative details and situation of its fixed
 assets till 31st March 2011.
 
 (b) Management of the company has carried physical verification of
 assets during the financial year 2010-11 and no material discrepancies
 were noticed on such verification.
 
 (c) During the year, the Company has not disposed off major part of the
 fixed assets hence the question of affecting the going concern status
 of the Company does not arise.
 
 (ii) In respect of Inventories:
 
 (a) Inventories of finished goods, stock in trade, raw materials and
 stores spares have been physically verified during the year by the
 management. In our opinion, the frequency of such verification is
 reasonable. In case of stocks of items like Refractory Bricks, due to
 the nature of the stock and the manner of its storage, the actual
 quantities of stocks cannot be measured on physical verification with
 substantial accuracy. However the difference, if any, in actual
 receipts and issues, is accounted for suitably.
 
 (b) The procedures of physical verification of inventories followed by
 the management are, in our opinion, reasonable and adequate in relation
 to the size of the Company and the nature of its business.
 
 (c) According to the records produced for our verification, there were
 no material discrepancies noticed on physical verification of stocks
 referred to in Para (ii) (a) above as compared to book records and the
 same have been properly dealt with in the books of account. The
 shortages and excesses noticed on physical verification as mentioned in
 Para (ii) (a) above are not abnormal and material according to the
 nature of the business of the company.
 
 (iii) 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 had taken loans from One Party. The outstanding at year
 end was 22,11,907/- and Maximum amount outstanding during the year was
 2,09,71,357. The Company has not granted any advance in the nature of
 loan to any party during the year.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 on which loans have been taken / given from / to such parties are not,
 prima facie, prejudicial to the interest of the Company.
 
 (c) In respect of loans taken by the Company, the principal amounts are
 repayable on demand and the interest payments are regular. In respect
 of loan given there is no stipulation as to the repayment and the
 interest is received regularly.
 
 (d) Since there is no stipulation as to repayment on loan given, the
 question of over-due amounts does not arise.
 
 (iv) In respect of Internal Controls:
 
 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 with regard to
 purchase of inventory, fixed assets and with regard to the sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure in correcting major weakness in
 internal controls systems. However the company needs to strengthen
 internal controls over generation and disposal of scrap and accounting
 for fixed assets.
 
 (v) In respect of transactions covered under section 301 of the
 Companies Act, 1956:
 
 (a) According to the information and explanations given to us, we are
 of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 have been entered
 in the register required to be maintained under that section. Total
 income amounting to Rs. 10,88,04,251/- has been generated during the
 year from these parties.
 
 (b) In our opinion and according to the information and explanations
 given to us, the 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 five lacs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time. According to the information and explanations given to us, in
 respect of transaction aggregating to Rs.  10,38,99,507/- with related
 parties approval of appropriate authority is pending as required u/s
 297 of the Companies Act, 1956. However the approval for the same is
 awaited.
 
 (vi) During the year company has not accepted the public deposit within
 the meaning of Section 58A of The Indian Companies Act, 1956.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956, and are of opinion that prima-facie, the prescribed accounts
 and records have been made and maintained.
 
 (ix) In respect of statutory dues:
 
 (a) The Company is regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 and protection fund, income tax, sales tax, wealth tax, customs duty,
 excise duty, service tax, cess and other material statutory dues
 applicable to it though there was a slightly delay in case of Service
 Tax, Professional Tax and Tax Deducted at Source. However, the company
 has not deducted and paid the applicable ESI other than at Haldia
 Branch.
 
 (b) According to the information and explanations given to us, no
 disputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty, service tax and cuss were in arrears as
 at 31st March, 2011 for a period of more than six months from the date
 they become payable except for professional Tax as under:
 
 (v) In respect of transactions covered under section 301 of the
 Companies Act, 1956:
 
 (a) According to the information and explanations given to us, we are
 of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 have been entered
 in the register required to be maintained under that section. Total
 Income amounting to Rs.26,89,429/- from Fairdale Supplies Ltd. and
 Rs.4,89,19,714/- from Falgun Export Limited, Income amounting to
 Rs.17,95,112/- from Centre for Advance Studies in Engineering, Income
 amounting to Rs.1,48,895/- from Neha Trade & Finance Private Limited,
 Income amounting to Rs.6,92,20,778/- from M/s. Fairdeal and Income
 amounting to Rs.1,34,83,246/- from Scientific Weighbridge & Auto Parts
 has been received during the year.
 
 (b) In our opinion and according to the information and explanations
 given to us, the 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 five lacs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time. According to the information and explanations given to us, in
 respect of transaction aggregating to Rs. 13,16,23,738/- with three
 parties approval of appropriate authority is pending as required u/s
 297 for the Companies Act, 1956. The company has already applied for
 approval of the same.
 
 (vi) During the year the company has not accepted the public deposit
 within the meaning of section 58A of The Indian Companies Act, 1956.
 However the company has taken an interest free advances from one party
 shown under the head Deposits and Trade Advances in the Schedule ''D''
 Unsecured Loan, from a partnership firm against supply of material and
 outstanding balance at the year end of Rs. 5,59,09,504/-.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 company pursuant to the rules made by the central government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956, and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.
 
 (ix) In respect of statutory dues:
 
 (a) The Company is regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 and protection fund, income tax, sales tax, wealth tax, customs duty,
 excise duty, service tax, cess and other material statutory dues
 applicable to it though there was a slight delay in case of Service
 Tax, Professional Tax and Tax Deducted at source. However, the company
 has not deducted and paid the applicable ESI other than at Haldia
 Branch in respect of Kolkata Division.
 
 (b) According to the information and explanations given to us, no
 disputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty, service tax and cess were in arrears as
 at 31st March, 2010 for a period of more than six months from the date
 they become payable except for service tax, professional tax and Value
 Added Tax as under:
 
 Nature of Tax   Amount    Period to      Due        Date of
                (Rs.)      which the      Dates      Payment
                           amount
                           Relates
 
 Professional 
 Tax             6038/-    April 10 to   15th of       -
                           August 10     Next Month
 
 (c) According to the information and explanations given to us, the dues
 of income tax and excise duty which have not been deposited on account
 of disputes and the forum where dispute is pending are as under:
 
 name of       Nature of   Amount    Period to which   Forum where dispute
 the Statute   Dues        (Rs.)     mount relates     is pending
 
 Income Tax
 Act, 1961     Income Tax  35,72,862  A.Y. 2005-2006          CIT (A)
 
 Income Tax
 Act, 1961     Income Tax  10,38,853  A.Y. 2006-2007          ITAT
 
 Income Tax
 Act, 1961     Income Tax   5,03,879  A.Y. 2008-2009          ITAT
 
 (x) The Company does not have accumulated losses and has not incurred
 cash losses in the current financial year covered by our audit and the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, bank or debenture holders.
 
 (xii) During the year, 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, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditor''s Report) Order 2003, are not applicable to the
 Company.
 
 (xiv) According to the information and explanations given by the
 management, the Company is not dealing in or trading in shares,
 securities, debentures and other investments. However, the Company is
 holding certain investments in equity shares of companies as long term
 investments.
 
 (xv) According to the information and explanation given to us, we are
 of the opinion that the terms and conditions of the guarantees given by
 the Company, during the year, for the loan taken by others from banks
 or financial institutions are, prima facie, not prejudicial to the
 interest of the Company.
 
 (xvi) In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 (xvii)According to the information and explanations given to us and on
 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. No long-term funds have been used to finance short-term
 assets.
 
 (xviii)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 during the year.
 
 (xix) During the financial year, the Company did not issue any
 debentures. Hence, the provisions of clause 4(xix) of the Companies
 (Auditor''s Report) Order, 2003, regarding creation of security for
 debentures are not presently applicable to the Company.
 
 (xx) The Company has not raised any money by way of public issues
 during the year. Accordingly, the provisions of Clause 4(xx) of the
 Companies (Auditor''s Report) Order, 2003, on the end use of money are
 not presently applicable to the Company.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 course of our Audit.
 
 
                                        For, Paresh Thothawala & Co.
  
                                        Chartered Accountants  
  
                                        FRN: 114777W
 
 
  
                                        Paresh K. Thothawala 
 
                                        Proprietor  
 
 Ahmedabad, September 3, 2011           MembershipNo.48435