1.  We have audited the attached Balance Sheet of MINAL INDUSTRIES
 LIMITED, as at March 31. 2011 and the Profit and Loss Account and 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.
 
 2.  We have 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 the management. as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion,
 
 1. As required by the Companies (Auditor''s Report) Older, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 237 of the Companies Act, 1556 of India and on the basis of
 such checks of the books and records of the Company as we considered
 appropriate and according Id the information and explanations given to
 us, we give In the Annexure a statement on the matters specified in
 paragraphs & and 5 of the said Order.
 
 4, We report that;
 
 a.  We have obtained all the information and explanation, 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 dealt with by this
 report are in agreement with the books of account;
 
 d.  In our opinion, the Balance Sheet and Profit and Loss Account dealt
 with by this report comply with the Accounting Standards referred to in
 sub-section (3c) of Section 211 of the Companies Act 1956 except the
 following
 
 (i) Hon Provision for diminution in value of investment as required by
 Accounting Standard (A5)-13 '' Accounting for investments'' issued by the
 Institute of Charted Accountants of India for reasons mentioned in
 note 3 of Schedule ''17
 
 (ii) Accounting Standard (AS)-I5 Revised Accounting for Retirement
 benefits in the Financial Statements of the Employers issued by the
 Institute of Chartered Accountants of India for reasons mentioned in
 note 4 of Schedule ''17 ''
 
 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 a director in terms of clause
 (9) 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
 the explanations given to us, the said accounts subject to:
 
 i) In respect of non provision of diminution in value of investment of
 Rs. 3.53 Lacs (See note 3)
 
 ii) In respect of non determination and non provision of gratuity
 liability and of liability towards leave encashment upon retirement.
 (See note 4)
 
 and read with the other notes appearing thereon, give the information
 required by the Companies Act 1956 in the manner so required and give a
 true and fair view.
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 11, 2011. and
 
 (b) in the case of the Profit and Loss Account, of the PROFIT for the
 year ended on that date.
 
 (c) in the case of the Cash Row Statement, of the cash flow for the
 year ended on that date.
 
              
 
 
 ANNEXURE TO AUDITOR''S REPORT
 
 (Referred to in paragraph 3 of the Auditor''s Report to the members of
 MINAL INDUSTRIES LIMITED for the year ended 31st March, 2011)
 
 1.  (a) The Company has maintained memorandum of records showing
 details of fixed assets (except furniture and fittings and electrical
 installation). However, comprehensive fixed assets register is being
 complied.
 
 (b) The fixed assets of the Company have been physically verified by
 the management during the year; no material discrepancies between the
 book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of Fixed Assets has not been disposed
 of by Company during the year.
 
 2.  (a) According to the information and explanations given to us,
 inventories have been physically verified by the management at
 reasonable intervals during the year.
 
 (b) According to the information and explanations given to us, 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) According to the information and explanations given to us, the
 Company is maintaining proper records of its inventory. The
 discrepancies noticed on verification between the physical stocks and
 book records were not material and have been properly dealt with in the
 books of account.
 
 3.  (a) According to the information and explanations given to us. the
 Company has granted unsecured loan to two Companies covered
 in the register maintained under Section 301 of the Companies Act, 1956.
 The details of loan are as under:
 
 Name of the Company      Relationship  Maximum Amount  Year end 
                                        involved        Balance
                     
 Minal International FZE  Subsidiary    1,43,28,930     1,43,28,930
                          Company
 (Mahendra Infojewels 
 Limited                  Associate     6,28,21.563     6,26,96,563
                          Company
 
 (b) The Company has granted interest bearing loan of Rs. 1,38,55,117/-
 (net of exchange difference) to its subsidiary company which the
 company has made provision of interest income and the loan given to
 associate company is Interest free In our opinion and according to the
 information and explanations given to us, the rate of interest and
 other terms and conditions on which loans have been granted to the
 above Companies listed in the register maintained under section 301 of
 the Companies Act, 1956 are not, prima facie prejudicial to the interest
 of the Company.
 
 (c) The receipt of the principal amount is regular
 
 (d) There are no overdue amount and hence the provision of sub-clause
 (d) of clause 4(iii) of the Order are not applicable to the Company.
 
 (e) The Company has taken loan from Director covered in the register
 maintained under Section 301 of the Act. The details of loan are as
 under:
 
 No of Directors    Maximum Amount outstanding  Amount outstanding at 
                    during the year             the year end
 
 1                  Rs.6,36,15,000/-            Rs,42,40,000/-
 
 
 (f) No interest is paid and other terms and conditions on which loan
 has been taken from Directors listed in register maintained under
 section 301 are Prima facie not prejudicial for the interest of the
 Company.
 
 (g) The Company is regular in repaying the principal amount as
 stipulated.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, carried out accordance with the auditing
 standards generally accepted in India and according to the information
 and explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control systems.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us. the particulars of contracts or arrangements
 that need to be entered in the register maintained under section 301
 have been properly entered.
 
 (b) In our opinion, and according to the information and explanations
 given to us, the transactions made in pursuance of contracts and
 arrangements referred to in (a) above and exceeding the value of Rs. 5
 lakhs with any party during the year have been made at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 6.  The Company has not accepted any deposit from public within the
 meaning of section 58A and 58AA or any other relevant provisions of the
 Companies Act, 1956 and the rules framed there under.
 
 7.  The company has no internal audit system
 
 8.  The matter specified in clause (viii) of paragraph 4 of the Order
 regarding maintenance of cost records under clause (d) of sub- section
 (1) of section 209 of the Act is not applicable to the Company.
 
 9.  (a) According to the information and explanations given to us, the
 Company is generally regular in depositing undisputed statutory dues
 including provident fund, investor education and protection fund,
 employee''s state insurance, income tax, sales tax, service tax. wealth
 tax, custom duty, excise duty, cess, and other statutory dues applicable
 with the appropriate authorities during the year, and there were no
 such outstanding dues as at March 31, 2011 for a period exceeding six
 months from the date they became payable.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of income tax,
 sales tax, service tax, wealth tax, custom duty, excise duty, cess,
 which have not been deposited on account of dispute.
 
 10.  The Company has no accumulated losses as at March 31,2011 after
 considering the balance in Reserve and Surplus account as at that date
 and has also not incurred any cash losses in the financial year ended
 on that date or in the immediately preceding financial year.
 
 11.  Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 company has not defaulted in repayment of dues to a financial
 institution, banks. There are no debenture holders.
 
 12. According to the information and explanations give to us, the
 Company has not granted any loans and advances on the basis of
 securities by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund and nidhi/mutual benefit
 fund/societies.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities debentures and other investment and hence, requirement of
 paragraph 4(xiv) are not applicable to the Company.
 
 15.  According to the records of the company and the information and
 explanations provided by the management, the company has not given any
 guarantee For loans taken by others from banks or Financial
 institutions.
 
 16.  According to the records of the company, the company has not
 obtained any term loans during the year.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that no funds raised on short-term basis have been used for long-term
 investment by the company.
 
 18.  According to the records of the company and the information and
 explanations provided by the management, 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,
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money through a public issue during
 the year.
 
 21. Curing the course of our explanations of the books and records of
 the Company, earned out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 
                                        FOR R. H. MODI & CO.
                                       CHARTERED ACCOUNTANTS 
                                  (Registration no. 106486W)
 
                                                  R. H. MODI
                                                  PROPRIETOR
                                        Membership No. 37643
 
 Place : Mumbai 
 Date  : 31/05/2010