1.  We have audited the attached balance sheet of Indo Tech
 Transformers Limited (the Company) as at March 31,2011, 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 Companys 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 (Auditors Report) Order, 2003, as
 amended, 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.
 
 4.  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 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 of account;
 
 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 comply with the Accounting Standards referred to in
 sub-section (3C) of section 211 of the Companies Act, 1956;
 
 e.  on the basis of written representations received from the directors
 as on March 31,2011 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 2011
 from being appointed as director in terms of clause (g) of sub-section
 (1) of section 274 of the Companies Act, 1956; and
 
 0 in our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements give the
 information required by the Companies Act, 1956, in the manner so
 required, 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 loss 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 To The Members
 INDO TECH TRANSFORMERS LIMITED
 
 i. a) The Company has maintained records showing full particulars and
 situation of fixed assets. However the Company needs to further
 strengthen its records so as to include comprehensive details of
 quantitative information.
 
 b) The Company has a regular programme of physical verification of its
 fixed assets by which all fixed assets are verified in a phased manner
 over a period of two years. In our opinion, this periodicity of
 physical verification is reasonable having regard to the size of the
 Company and the nature of its assets. No material discrepancies were
 noticed on such verification.
 
 c) Fixed assets disposed off during the year were not substantial and
 therefore do not affect the going concern assumption.
 
 ii. a) The inventory, except stocks lying with third parties, has been
 physically verified by the management during the year. In our opinion,
 the frequency of verification is reasonable. For stocks lying with
 third parties at the year-end, written confirmations have been
 obtained.
 
 b) In our opinion, the procedures for the physical verification of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 c) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company has maintained proper records of
 inventory. The discrepancies noticed on verification between physical
 stocks and the book records were not material and have been properly
 dealt with in the books of account.
 
 iii. The Company has neither granted nor taken any loan, secured or
 unsecured to or from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act,1956. Thus,
 paragraph 4(iii) of the Order is not applicable.
 
 iv. In our opinion and according to the information and explanations
 given to us, and having regard to the explanation that purchases of
 certain items of inventories are for the Companys specialised
 requirements and similarly certain goods sold are for the specialised
 requirements of the buyers and suitable alternative sources are not
 available to obtain comparable quotations, there is an adequate
 internal control system commensurate with the size of the Company and
 the nature of its business with regard to purchase of
 
 inventories and fixed assets and with regard to the sale of goods and
 services. In our opinion and according to the information and
 explanations given to us, there is no continuing failure to correct
 major weaknesses in internal control system.
 
 v. In our opinion and according to the information and explanations
 given to us, there are no contracts and arrangements particulars of
 which need to be entered into the register maintained under section 301
 of the Companies Act, 1956.
 
 vi. The Company has not accepted any deposits from the public.
 
 vii. In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 viii.We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules prescribed by the Central Government for
 maintenance of cost records under section 209(1 )(d) of the Companies
 Act, 1956 in respect of power transformers and are of the opinion that
 prima facie, the prescribed accounts and records have been made and
 maintained. However, we have not made a detailed examination of the
 records.
 
 ix. a) According to the information and explanations given to us and on
 the basis of our examination of the records of the Company, amounts
 deducted/accrued in the books of account in respect of undisputed
 statutory dues including provident fund, employees state insurance,
 income-tax, sales-tax, excise duty, customs duty, service tax, and
 other material statutory dues have generally been regularly deposited
 during the year by the Company with the appropriate authorities except
 in respect of income tax deductible at source estimated at Rs. 4.6
 million which has not been deducted / paid. As explained to us, the
 Company did not have any dues on account of wealth tax and investor
 education and protection fund. There were no dues on account of cess
 under section 441A of the Companies Act, 1956 since the aforesaid
 section has not yet been made effective by the Central Government.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees
 state insurance, income tax, sales tax, excise duty and other material
 statutory dues were in arrears as at March 31,2011 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
 following dues of income tax, sales tax, and customs duty have not been
 deposited by the Company on account of disputes:
 
 Name of the 
 Statute       Nature of the 
               dues              Amount     Period to 
                                            which the     Forum where 
                                                          dispute
                                (In Rs.)    amount 
                                            relates       is pending
 
 The Customs 
 Act, 1962    Customs Duty    1,417,317*   FY 2004-05    Custom Excise
                                                       and Service Tax
                                                      Appellate Tribunal, 
                                                               Chennai
 
 The Central  Central Sales
              Tax                441,618   FY 1996-97  Madras High Court
 Sales Tax 
 Act, 1956
 
 TNGST, 1959     Penalty          15,607   FY 1996-97  Appellate Assis
                                                       tant Commission
 
 Income-tax 
 Act, 1961    Income tax       5,548,581   AY 2005-06  Commissioner of
                                                       Income Tax
                                                       (Appeals)
 
 Income-tax 
 Act, 1961    Income tax       6,334,963   AY 2006-07  Commissioner of
                                                       Income Tax
                                                       (Appeals)
 
 Income-tax 
 Act, 1961    Income tax       5,129,608   AY 2008-09  Commissioner of
                                                       Income Tax
                                                       (Appeals)
 
 The Customs 
 Act, 1962     Penalty        29,395,120    2003 to 
                                            2005       Joint Director
                                                       General of
                                                       Foreign Trade,
                                                       Chennai
 
 * net of amount paid under protest.
 
 x. The Company does not have any accumulated losses at the end of the
 financial year. However, it has incurred cash losses in the current
 financial year and 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 its
 bankers. The Company did not have any outstanding dues to any financial
 institution or debenture holders during the year.
 
 xii. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 xiii.ln our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi / mutual benefit
 fund / society.
 
 xiv. According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures,
 and other investments.
 
 xv. 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.
 
 xvi. In our opinion and according to the information and explanations
 given to us, the term loans taken by the company have been applied for
 the purpose for which they were raised.
 
 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 funds raised on short-term basis have not been
 used for long-term investments.
 
 xviii.The Company has not made any preferential allotment of shares to
 companies / firms / parties covered in the register maintained under
 Section 301 of the Companies Act, 1956.
 
 xix. The Company did not have any outstanding debentures during the
 year.
 
 xx. The Company has not raised any money by public issues during the
 year.
 
 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 B S R and Co
 Chartered Accountants
 Firm registration No. - 128510W
 
 S Sethuraman
 Partner
 Membership No.: 203491
 
 Place: Chennai
 Date :May 13, 2011