1.  We have audited the attached Balance Sheet of IVRCL Limited (the
 Compaq) as at March 31, 2011, the Profit and Loss Account and the Cash
 Flow Statement of the Company for the year eroded on that date, both
 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 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we give in the Annexure a statement on the matters
 specified in para graphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (i) 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;
 
 (ii) in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3(1) of the
 Companies Act, 1956;
 
 (v) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 (b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 Directors as on March 31, 2011 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 a director in terms of Section
 274(1 )(g) of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Compamy''s busimess/aetivities
 daises (viii), (x), (xii), (xiii), (xiv), (xviii), (xix)and(xx)of
 CARO are mot applicable.  
 
 (ii) In respect of its fixed assets:
 
 (a) The Compaq has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 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 no material discrepancies were noticed on physical
 verification.
 
 (iv) In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register under
 Section 301 of the Companies Act, 1956, according to the information
 and explanations given to us:
 
 (a) The Company has granted loans aggregating Rs. 160.58 million to two
 parties during the year. At the yearend, the outstanding balances of
 such loans aggregated Rs. 1,035.36 million and the maximum amount
 involved during the year was Rs. 1,062.17 million.
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interests of
 the Company.
 
 (c) In accordance with the terms of loan, the principal, along with
 interest thereon is receivable in five annual instalments after a
 moratorium of five years from the date of disbursement, or earlier.
 Accordingly Rs. 55.73 million has been received during the year.
 
 (d) The company has not taken any loan, secured or unsecured from
 companies, firms or other parties listed in the Register maintained
 under section 301 of the Companies Act, 1956. Consequently, clauses
 (iii) (e), (f) and (g) of CARO are not applicable.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining 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 purchases of
 inventory and fixed assets and the sale of goods and services.  During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in 
 respect of any party, the transactions (other than the loans reported 
 under paragraph (iv) above) have been made at prices which are prima 
 facie reasonable having regard to the prevailing market prices at the
 relevant time except in respect of certain purchases for which
 comparable quotations are not available and in respect of which we are
 unable to comment.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provision of Sections 58A & 58AA or any other relevant provisions of
 the Companies Act, 1956 except for a delay in filing the annual return
 for the year ended March 31, 2010, required under Rule 1 o of the
 Companies (Acceptance of Deposits) Rules, 1975.
 
 (viii) In our opinion, the imtermal audit function carried out durimg
 the year by firms of Chartered Accountants appointed by
 the Management have been commensurate with the size of the Company and
 the mature of its business.  
 
 (ix) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Incometax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Incometax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at March 31,2011 for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Incometax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 March 31, 2011 on account of disputes are given below:
 
 Statute       Nature of    Forum where      Period to which    Amount 
                                                                Involved
               dues         Dispute is 
                            pending          the amount 
                                             relates