Kalindee Rail Nirman (Engineers)

1.  We have audited the attached Balance Sheet of M/s KALINDEE RAIL
 NIRMAN (ENGINEERS) LTD, NEW DELHI as at 31st March, 2008, the Profit &
 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.
 
 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 included
 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 issued
 by the Central Government of India in terms of 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 in paragraph 3
 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 purpose of our
 audit;
 
 (b) In our opinion, proper Books of Accounts 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 branches not visited by us;
 
 (c) The Balance Sheet, Profit & 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 & 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 written representations received from the
 Directors, as on 31st March, 2008, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2008, 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
 explanations given to us, the said accounts give the information
 required and 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 31st March, 2008;
 
 (ii) In the case of the Profit & Loss Account, of the Profit of the
 Company for the year ended on that date;
 
 (iii) In the case of the Cash Flow statement, of the Cash Flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORSREPORT
 
 1.  Inrespect of Fixed Assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) As explained to us, all the fixed assets have been physically
 verified by the management in a phased periodical manner, which in our
 opinion is reasonable, having regard to the size of the company and
 nature of its assets. No material discrepancies were noticed on such
 physical verification.
 
 c) The Company has not disposed off any major part of fixed assets
 during the year.
 
 2.  In respect of its inventories:
 
 a) Inventory including stocks with subcontractors in certain locations,
 has been physically verified by the management during the year. In our
 opinion, the frequency of verification is reasonable.
 
 b) The procedures of physical verification of inventory 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 inventory records, we are of
 the opinion that the Company is maintaining proper records of
 inventory. The discrepancies noticed, between the book records and
 physical stocks, on verification as at March 31, 2008, were not
 material.
 
 3.  The Company has neither granted nor accepted any loans, secured or
 unsecured to / from Companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 Accordingly, the provisions of clause 4 (iii)of the Companies
 (Auditors Report) Order ,2003 are not applicable to the Company.
 
 4.  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 and fixed assets and with
 regard to the work executed. During the course of our audit, we have
 not observed any continuing failure to correct major weakness in
 internal controls.
 
 5.  In respect of transactions entered in the register maintained in
 pursuance of section 301 of the Companies Act, 1956:
 
 a) According to the information and explanations given to us, the
 transactions that needed to be entered in register have been so
 entered.
 
 b) In our opinion and according to the information and explanations
 given to us, transactions in excess of Rs 5 lakhs in respect of any
 party during the year, have been made at prices which are prima facie
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 6.  The Company has not accepted any deposits from the public during
 the year.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We are informed that the Central government has not prescribed the
 maintenance of cost records for any of the Companys products under
 Section 209 (l)(d) of the Companies Act,1956
 
 9.  According to the information and explanations given to us in
 respect of statutory dues:
 
 a) The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom
 Duty, Cess and other material statutory dues applicable to it.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Customs Duty and Cess were in arrears, as at 31st March, 2008 for
 period of more than six months from the date they become payable.
 
 c) According to the information and explanations given to us, there are
 no dues of Income tax, Wealth Tax, Sales tax and cess which have not
 been deposited on account of any dispute.
 
 10.  The Company has accumulated reserves (surplus) and has not
 incurred any cash losses either during the current financial year or in
 the immediately preceding financial year.
 
 11 The Company has not defaulted in repayment of dues to the Financial
 Institutions or Banks..
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The Company is not a chit fund or nidhi mutual benefit fund /
 society. Therefore, the provisions of clause 4(xiii) of the Companies
 (Auditors Report) Order 2003 are not applicable to the Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company is not dealing in or trading in shares,
 securities and debentures and other investments. Accordingly the
 provisions of clauses 4(xiv) of the Companies (Auditors Report) Order
 2003 are not applicable to the company.
 
 15.  The Company has not given any guarantee for loans taken by others
 from Financial Institutions.
 
 16 The Company has availed term loan and has specifically used for the
 purpose for which loan was taken.
 
 17.  According to the information and explanation made available to us
 and on an overall examination of the Balance Sheet of the Company, we
 report that no funds raised on short terms basis have been used for
 long-term investments by the Company.
 
 18.  The Company has made preferential allotment of Shares and warrants
 to parties and Companies in accordance with the provisions of Sec 81
 (1A) of The Companies Act, 1956.
 
 19.  The Company has not issued any Bonds during the year under review.
 
 20.  The Company has not raised any money by way of Public issue during
 the year.
 
 21 Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the course of our
 audit.
 
                                                    sd/- 
                                                ARUN JAIN 
                                    B.Com. (Hons), FCA, ACS 
                                            Proprietor 
 
                                       PREM ARUN JAIN & CO.
                                      Chartered Accountants 
 Place: Gurgaon                       Membership No. 81455 
 Date : 31st July, 2008