We have audited the attached Balance Sheet of M/S. JYOTI OVERSEAS
 LIMITED., INDORE (M.P.) as at March 31st, 2011 and also Profit & Loss
 Account and the 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.
 
 1) 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.
 
 2) 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.
 
 3) 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.
 
 (c) The Balance Sheet and Profit and Loss Account and Cash flow
 statement dealt with by this report are in agreement with the Books of
 accounts.
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement read with Notes 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) The Company is a Sick Industrial Company within the meaning of Sick
 Industrial Companies (Special Provisions ) Act,1985.  However, in view
 of the facts indicated in note no. 3 in schedule 19, the accounts of
 the Company have been prepared on going concern basis.
 
 (f) Attention is drawn to the following notes in schedule 19 to
 accounts whose impact on Company''s Loss/reserves is indicated in the
 respective notes below:
 
 i) Note no. 7 regarding non availability of balance confirmation
 certificate from some of the Debtors, Creditors and Loans & Advances;
 ii) Note No. 2 & 3 regarding non ascertainable effect, if Company is
 not able to continue as a going concern, iii) Note No.  24 regarding
 provision of gratuity on accrual basis and non ascertainment of
 liability as per actuarial valuation as required by AS 15. iv) Note no.
 4 for non provision of Interest on Term Loans taken by the Company from
 Financial Institutions of Rs. 322.98 Lacs for the Year and total amount
 not provided for till the date of Balance Sheet Rs. 4346.03 Lacs.
 
 Without considering item no. (i) ,(ii) & (iii) above, whose impact on
 Company''s loss/reserves is not presently ascertainable, had the impact
 of item no. (iv) been considered, a) Loss for the year would have been
 higher by Rs. 322.98 Lacs and consequently term Loans would have been
 higher by same amount, b) If the Total amount would have been provided
 for, the accumulated Losses would have been higher by Rs. 4346.03 Lacs
 and Consequently Secured Loans would have been higher by Same amount.
 
 (g) On the basis of information and explanations given to us, we report
 that none of the directors is disqualified as on the date of Balance
 Sheet date from being appointed as a director in terms of clause (g) of
 sub- section (1) of section 274 of the Companies Act, 1956;
 
 (h) Subject to the above and read together with other notes on
 Accounts, in our opinion and to the best of our information and
 according to the explanations given to us, the said accounts read with
 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:
 
 (a) In the case of the Balance Sheet, of the State of affairs of the
 Company as at 31st March, 2011;and
 
 (b) In the case of the Profit and Loss Account, of the Loss for the
 year ended on that date; and
 
 (c) In the case of Cash flow Statement of the Cash Flows of the Company
 For the year ended on that date.
 
 ANNEXURETOTHE AUDITOR''S REPORT
 
 With reference to the Annexure referred to in paragraph 2 of our report
 of even date to the members of M/S. JYOTI OVERSEAS LIMITED, for the
 year ended on 31st March, 2011, We report that, in our opinion and to
 the best of our information and explanations furnished to us and the
 books and records examined by us in the normal course of Audit:
 
 1. a. The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b. As explained to us, the fixed assets have been physically verified
 by the management during the year, which in our opinion is reasonable,
 having regard to the size of the Company and nature of its asset We
 were informed that no material discrepancies were noticed on such
 physical verification.
 
 c. There has been no disposal of substantial part of the Fixed Assets
 during the year & the going concern status of the Company is not
 affected.
 
 2. a. Inventories have been physically verified by the management at
 reasonable intervals during the year.
 
 b. In our opinion, the procedures of 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. The Company has maintained proper records of inventories. The
 discrepancies noticed on verification between physical stock and book
 stock were not material having regard to the size of the operations of
 the company and have been properly dealt with in Books of Accounts.
 
 3. a. The Company has taken Loan from One party covered in the register
 maintained under section 301 of the Act, At the year end Outstanding
 balance of such loan taken aggregated to Rs. 67.26 Lacs and the maximum
 Amount involved during the year was Rs.  74.76 Lacs, Further Company
 has not granted Loans to Companies, firms or other parties covered in
 the register maintained under Section301 of the Companies Act, 1956.
 
 b. In our opinion and according to the information and explanations
 given to us, the Loans are Interest free and other terms and conditions
 of the aforesaid Unsecured loans taken by the Company are not prima
 facie prejudicial to the interest of the Company.
 
 c. In respect of Loans taken by the Company, the payment of Principal
 amount is regular.
 
 d. In respect of Loans taken by the Company, these were no overdue
 amount. The Company has not given the Loan.
 
 4. In our opinion and according to the information and explanation
 given to us, there is adequate internal control procedure commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and also for the sale of goods.
 During the course of our audit, we have not observed any major
 weaknesses in internal controls.
 
 5. Based on the Audit Procedures applied by us and according to the
 information and explanations given to us, there were no transactions
 that need to be entered into the register maintained in pursuance of
 section 301 of the Companies Act, 1956.
 
 6. The Company has not accepted any deposits from the public within the
 meaning of Section 58 A and 58 AA of the Companies Act, 1956 and the
 rules framed there under. Accordingly, there have been no proceedings
 before the Company Law Board in this matter nor any order has been
 passed.
 
 7. In our opinion, the Internal Audit System is generally adequate and
 commensurate with the size of the Company.
 
 8. The Central Government has prescribed maintenance of cost records
 under section 209(1) (d) of the Companies Act,1956 in respect of
 manufacturing activity of the Company. We have broadly reviewed the
 accounts and records of the Company in this connection and are of the
 opinion, that prima facie, the prescribed accounts and records have
 been made and maintained. We have not, however made a detailed
 examination of the same with a view to determine whether these records
 are complete and correct.
 
 9. a. According to the records of the Company, undisputed Statutory
 dues including Income Tax, Wealth Tax, Customs Duty, Excise Duty,
 Provident fund and other statutory dues except for Sales Tax, Entry
 Tax, Professional Tax and Cess duty have been generally regularly
 deposited with the appropriate authorities. According to the
 information and explanations given to us, no arrears of undisputed
 amounts payable in respect of the aforesaid dues were outstanding as on
 the date of Balance sheet for a period of more than six months from the
 date they become payable except for MPCT/CST Rs. 43,48,239, Entry Tax
 Rs. 1,20,17,890, Professional Tax Rs. 5,22,097 and Cess duty Rs.
 2,13,140.
 
 b. According to the information and explanations given to us, the dues
 in respect of Sales Tax that has not been deposited with the
 appropriate authorities on account of disputes as on the date of the
 Balance Sheet and the forum where the disputes are pending are as
 under:
 
 Sr.  Name of     Nature of    Forum where    Amount for      Amount
 No.  the Statue  the Dues     dispute is     Which dispute   Not
                  pending.     is pending     is pending      Deposited
                                             (Rs. in lacs)   (Rs. in lacs)
 
 1.   M.P. Comm. 
      Tax Act     MPCT         High Court       158.40          158.40
                               Year 99-00 
                               to 04-05
 
 2.   M.P. Comm. 
      Tax Act     Entry Tax    High Court, 
                               Indore            40.69           40.69
                               1997-98
 
 10. The accumulated losses of the Company at the end of the financial
 year are more than fifty percent of its net worth. The Company has not
 incurred any cash losses during this financial year, but the company
 incurred cash loss in the immediately preceding financial year.
 
 11. The Company has defaulted in repayment of dues to ARCIL and EXIM
 Bank. The entire amount of outstanding Rs. 2678.11 Lacs and interest
 not provided for of Rs. 4346.03 Lacs is in default.
 
 12. According to the information and explanations given to us, the
 Company during the year has not granted Loans and Advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 13. The Company is not a nidhi/mutual benefit fund/ society to which
 the provisions of special statue relating to chit fund are applicable.
 
 14. The Company is not dealing or trading in Share, Securities,
 Debentures and other investments..
 
 15. According to the information and explanation given to us, The
 Company has not given any guarantees for Loans taken by others from
 Banks or Financial Institutions.
 
 16. The Company has not raised any term loans during the year & the
 term loan outstanding at the beginning of the year, were applied for
 the purpose for which they were raised.
 
 17. According to the information and explanation given to us and on an
 overall examination of the Balance Sheet of the Company, we are of the
 opinion that Prima facie the Company has not utilised the funds raised
 from short term sources towards Long term investment and vice versa.
 
 18. During the year, the Company has not made any preferential
 allotment shares to parties and Companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 19. The Company did not have issued debentures and therefore question
 of creating of Securities does not arise.
 
 20. The Company has not raised any money by way of Public issue during
 the year.
 
 21. In our opinion and according to the information and explanation
 given to us, no fraud on or by the Company has been noticed or reported
 during the year that causes the financial statements to be materially
 misstated.
 
                                           For S. P. MOONDRA & CO., 
 
                                             CHARTERED ACCOUNTANTS
 
                                                 (S.P. MOONDRA)
 
                                                    PROPRIETOR
 
 PLACE : INDORE                                   M. NO. 073747
 
 DATED THE : 25th August, 2011                    FRN No.04879C