We have audited the attached Balance Sheet of Sat Industries Limited,
 as at 31st March, 2011 the Profit and Loss Account for the year ended
 on that date and also the Cash Flow Statement 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.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. These Standards require that we plan and perform the
 audit to obtain reasonable assurance about whether the financial
 statements are free from 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.
 
 In accordance with the provision of section 227 of companies
 act,1956,we report that as required by the companies (Auditor''s Report)
 order,2003 issued by the central government in terms of section 227
 (4A) of The Companies Act 1956 and on the basis of such checks as
 considered appropriate and in terms of the information and explanation
 given to us, we give in the annexure, a statement on the matters
 specified in paragraph 4 & 5 of the said order to the extent applicable
 to the company.
 
 Further to our comments in the Annexure referred 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 purpose of our
 audit.
 
 (b) In our opinion, the Company has kept proper books of account as
 required by law, so far as appear from our examination of such books of
 account.
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account of
 the company and for Company''s foreign branch financial statement for
 the year ended on 31st March, 2011, we have relied upon the local
 auditors who have carried out audit for the year ended as on that date.
 
 (d) In our opinion, the balance sheet, profit & loss account and the
 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, 2011, and taken on record by the Board of
 Directors, we report that none of the director is disqualified as on
 31st March 2011 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
 the explanations given to us the said accounts read together with note
 no. 3 regarding Company''s position on sundry debtors of INR
 38,006,086/- out of which substantial amount of INR 34,394,168/-
 (foreign currency AED 2,789,968/-) is outstanding from its foreign
 branch which has been relied upon by us without any independent
 verification, note no.9 regarding non provision for diminution in value
 of investments in subsidiary companies, note no 10 regarding quantity
 details which are relating to foreign branch are subject to independent
 verification, and note no. 16 regarding non appointment of company
 secretary, and other notes thereon give the information required by the
 Companies Act, 1956, in the manner so required and present a true and
 fair view in conformity with the accounting principles generally
 accepted in India -
 
 (i) In so far as it relates to the Balance Sheet, of the state of
 affairs of the Company as at 31st March, 2011;
 
 (ii) In so far as it relates to the Profit and 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 referred to in our report of even date
 
 (i) (a) The company has maintained fixed assets register showing full
 particulars, including quantitative details and situation of fixed
 assets;
 
 (b) As explained to us, fixed assets have been physically verified by
 the management at reasonable intervals and no material discrepancies
 were found at the time of physical verification
 
 (ii) (a) The physical verification of inventory has been conducted at
 reasonable intervals by the management.
 
 (b) The procedures of physical verification of inventory followed by
 the management as explained to us are reasonable and adequate in
 relation to the size of the company and the nature of its business
 although at the end of the year there are no inventories.
 
 (c) The company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) In our opinion and according to the information and
 explanation given to us, the Company has not granted unsecured loans to
 companies, firms or other parties covered in the register maintained
 U/s 301 of the Act during the year, so the clause iii (b), (c) and (d)
 of the order is not applicable.
 
 (e) In our opinion and according to the information and explanation
 given to us, the company has taken unsecured loans from companies,
 firms or other parties covered in the register maintained under section
 301 of the Act. The number of parties are 9, maximum outstanding during
 the year is Rs.61,906,878 and balance as on 31/03/11 is
 Rs.26,890,088/-.
 
 (f) The terms and conditions of unsecured loans taken are prima facie
 not prejudicial to the interest of the company.
 
 (g) Regular repayment of the interest free principal amount of
 unsecured loans are not applicable as it is repayable on demand.
 
 (iv) In our opinion and according to the information and explanation
 given to us, the company has an adequate internal control procedure
 commensurate with the size and the nature of its business, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services.
 
 (v) (a) In our opinion and according to the information and explanation
 given to us, the company is in the process of updating the register for
 transactions that need to be entered into a register in pursuance of
 section 301 of the Act;
 
 (b) As per information and explanation given to us, the transactions
 entered with the parties covered u/s 301 of The Companies Act, 1956
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 (vi) In our opinion and according to the information and explanation
 given to us, the clause (vi) of the order is not applicable to the
 Company, as the company has not accepted any public deposit.
 
 (vii) In our opinion, the Company has an internal audit system through
 internal controls, however the scope and coverage of which needs to be
 strengthened to make it commensurate with the size of the company and
 nature of its business.
 
 (viii) As explained to us, maintenance of cost records prescribed by
 the Central Government under clause (d) of sub-section (1) of section
 209 of the Act is not applicable to the company.
 
 (ix) (a) As explained to us by the management, since the number of
 employees are falling below the limit, therefore provident fund,
 Investor Education and Protection Fund, Employees State Insurance are
 not applicable to the Company.  The Company is regular in depositing
 undisputed statutory dues relating to Income Tax, Sales Tax, Wealth
 Tax, Service Tax, Customs Duty, Excise Duty, Cess wherever applicable
 and other statutory dues with the appropriate authorities and there are
 no undisputed statutory dues outstanding as at 31st March 2011 for a
 period of more than six months from the date they became payable.
 
 (b) According to the records of the company, the dues of sales tax,
 income tax, customs, wealth tax, service tax, excise duty, cess which
 have not been deposited on account of disputes and the forum where the
 dispute is pending are NIL.
 
 (x) The Company does not have any accumulated losses at the end of the
 financial year and it has not incurred cash losses in current financial
 year and in the immediately preceding financial year.
 
 (xi) The company has not taken any loans from financial institution or
 bank or debenture holders, so the question of default in repayment does
 not arises.
 
 (xii) The clause (xii) of the order is not applicable to the company,
 as the company has not granted loans and advances on the basis of
 security.
 
 (xiii) The clause (xiii) of the order is not applicable to the Company,
 as the company is not a chit fund/nidhi company.
 
 (xiv) The Company has invested in subsidiary''s / associates share
 capital, except this, the company does not have any other investment.
 Investments have been held by the Company in its own name.
 
 (xv) The Company has not received any term loan during the year, so the
 clause (xv) of the order is not applicable.
 
 (xvi) The Company has not given any guarantee for loans taken by others
 from banks or financial institutions, therefore clause (xvi) is not
 applicable.
 
 (xvii)As per information and explanation given to us and on the overall
 examination of balance sheet, we have found that the funds raised on
 short term basis have not been used for long term investment.
 
 (xviii)As per information and explanation given to us, the Company has
 not made any preferential allotment of shares to parties and companies
 covered in the Register maintained under section 301 of the Act during
 the year.
 
 (xix) Since the Company has not issued any debentures during the year,
 the question of security or charge created does not arise.
 
 (xx) The Company has not raised money through public issue and
 therefore clause xx of the order is not applicable to the company.
 
 (xxi) During the course of our examination of the books and records of
 the company carried out in accordance with the generally accepted
 auditing practices in India and according to the information and
 explanation given to us, we have neither come across any instance of
 fraud on or by the Company noticed or reported during the year nor we
 have been informed of such case by the management.
 
                                                  For R.KABRA & CO.
 
                                             Chartered Accountants
 
 Place : Mumbai                                       (DEEPA RATHI)
 
 Dated : 27-08-2011                                        Partner
 
                                             Membership No. 104808
 
                                     Firm Registration No. 104502W