We have audited the attached balance Sheet of Mis. Krisons Electronic
 Systems Limited as at 31.03.2010 and the Profit & Loss Account for the
 year ended on that date, annexed thereto and Cash Flow Statement for
 the period ended on that date. 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 misstatements. An audit
 includes examining, on a test basis evidence supporting the amounts and
 discloses in financial statements. An audit also includes assessing the
 accounting principles used and 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.
 
 2 As required by the Companies (Auditor''s Report) Order, 2003
 (CARO)issued by the Central Government of India in terms of sub-section
 (4A) of section 227 of the Companies Act,1956. and on the basis of such
 checks as we considered appropriate and according to the information
 and explanations given to us, 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 paragraph 2 above, we state 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 the
 audit.
 
 c) The Balance Sheet and the Profit and Loss Account referred to in
 this report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet and the Profit & Loss Account
 complies with the mandatory accounting standards except Accounting
 Standard 15 on accounting for retirement benefits as referred to in
 Section 211 (3C) of the Companies Act, 1956.
 
 e) In our opinion, and based on information and explanations given to
 us, none of the directors are disqualified as at 31st March, 2010 from
 being appointed as Directors in terms of Section 274(1) (g) of the
 Companies Act, 1956.
 
 f) We draw attention to Note No. 1 in schedule 11 regarding the net
 worth of the company.  
 
 g) No provision for doubtful debts and bans & advances amounting to 
 Rs.99,25,565.53 have been made (Refer Note No.
 
 h) We draw attention to Para 1 of annexure to our report of even date
 regarding going concern status of the Company.
 
 i) In view of the significance of our observations in Para (f), (g) &
 {h) above, we are of the opinion that the said accounts DO NOT GIVE a
 true and fair view:-
 
 (a) In the case of the Balance Sheet of the state of affairs of the
 company as at 31st March, 2010.
 
 (b) In the case of Profit & Loss Account of the loss for the year ended
 on 31st March, 2010.
 
 (c) In so far as it relates to the Cash Flow Statement of the cash flow
 of the Company for the year ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 
 1 The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets. As
 explained to us, the fixed assets have been physically verified by the
 management at all locations at reasonable intervals. According to the
 information and explanation given to us no material discrepancies were
 noticed on such verification. The fixed assets disposed off during the
 year construe a substantial part of the fixed assets of the Company
 and such disposal may affect the going concern status of the Company.
 
 2 According to the information and explanation given to us no
 inventories were held during the year, therefore, the provisions of
 paragraph 4(H) of CARO are not applicable to the Company.
 
 3 According to the information and explanation given to us, the company
 has not granted any loans, secured or unsecured to companies, firms or
 other parties listed in the register maintained under section 301 of
 the companies Act, 1956.
 
 4 According to the information and explanation given to us, the company
 has taken unsecured loan from one party covered in the register
 maintained u/s 301 of the companies Act 1956. The maximum amount
 involved is Rs.2,51,00,495k The year end balance of loan taken is Rs.
 1,98,65,495/-. The terms an.  conditions on which loan was obtained are
 not prime facie, prejudicial to the interest of the company.  No
 interest is being paid on such loan taken by the company. There is no
 stipulation regarding repayment of such loan by the company.
 
 5 In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the company and nature of its business with regard to
 purchases of inventory and sale of goods, and purchases of fixed assets
 during the year.
 
 6 According to the information and explanations given to us, we are of
 the opinion that there are no transactions that need to be entered into
 the register maintained under section 301 of the companies Act, 1956
 exceeding the value of five lakhs rupees in the financial year.
 
 7.  In our opinion and according to the information and explanation
 given to us, the company has not accepted deposits from the public
 during the year.
 
 8.  As explained to us, the company is not having any internal audit
 systems due to lack of business activities.
 
 9.  The Central Government has not prescribed the maintenance of cost
 records by the company under section 209(1) (d) of the Companies Act,
 1956.
 
 10 According to the information and explanations given to us, there is
 no undisputed amounts payable in respect of income tax, wealth tax,
 sales tax, customs duty, service tax and excise duty is outstanding as
 at 31.3.2010 for a period of more than six months from the date they
 became payable.
 
 According to the information and explanations given to us, disputed
 Sales Tax that have not been deposited are as follows:
 
 Name of 
 Statute     Nature of Dues    Amount (Rs.)     Period 
                                                to           Forum where
                                                Which Amt    dispute is
                                                Relates      Pending
 
 KESL Vs 
 Dy.. 
 Comm.       Disputed 
             Trade Tax       Rs. 1,33,46,653/-  1990-91      Joint Comm.
                                                             Trade
 of Trade 
 Tax, Noida.                                                 Tax
                                                            (Appeal)
                                                             Noida
 
 KESL Vs 
 Dy. 
 Comm.       Disputed 
             Trade Tax           Rs.  99,697/-  1996-97      Member of
                                                             Trade Tax
 of Trade 
 Tax, 
 (Appeals)                                                   Tribunal,
                                                             Noida (U.P)
 
 11.  The accumulated losses of the Company, are more than fifty percent
 of its net worth. The company has incurred cash losses during the
 financial year covered by our audit and immediately preceding financial
 year.
 
 12.  According to the information and explanations given to us, there
 were no dues payable to any financial institutions, banks or debenture
 holders during the year.
 
 13.  According to information and explanation given to us, the company
 has not granted Loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 14.  The company is not a chit fund, nidhi or mutual benefit
 fund/Society.
 
 15.  The company is not dealing or trading in shares, securities
 debentures and other investments.
 
 16.  According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 17.  According to the information and explanations given to us, the
 company has not raised any term loans during the year.
 
 18.  According to the information and explanations given to us, the
 funds raised by the company on the short term basis have not been used
 for long term investment and vice versa,
 
 19.  The company has not made any preferential allotment of shares to
 parties and companies covered in the Register maintained under section
 301 of the Companies Act, 1956.
 
 20.  The company has not issued any debentures during the year.
 
 21.  The company has not made any public issue during the year.
 
 22.  According to the information and explanations given to us, any
 fraud on or by the company has not been notice or reported during the
 year.
 
                                             For GUPTA & JHUNJHUNWALA
  
                                                Chartered Accountants
 
                                             (Registration No.003849N)
 
                                                          (MUKESH OUA)
 
                                                              Partner
 
                                                  Membership No.85323
 
 Date : September 28, 2010
 
 Place: New Delhi