1.  We have audited the attached Balance Sheet of Shantivijay Jewels
 Limited as at March 31, 2011 and related Profit and Loss Account and
 the cash flow statement for the year ended on that date annexed
 thereto. These financial statements are the responsibility of the
 management of the Company.  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 includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall presentation of the
 financial statements. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order 2003, issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Act and on the basis of such checks as we considered appropriate and
 according to the information and explanations given to us, we give in
 the Annexure a statement on the matters specified in paragraphs 4 and 5
 of the said Order to the extent applicable to the Company.
 
 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 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
 these 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
 account:
 
 d.  In our opinion, Balance sheet and Profit & Loss A/c and cash flow
 statement dealt with by this report comply with applicable Accounting
 Standards referred to in section 211-(3) (C) of the Companies Act 1956.
 
 e.  Based on the representations made by all the Directors of the
 Company as on March 31, 2011 and taken on record by the Board of
 Directors of the Company and in accordance with the information and
 explanations as made available, the Directors of the Company do not,
 prima facie, have any disqualification as referred to in Clause (g) of
 subsection (1) to Section 274 of the Act on the said date.
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, the Balance Sheet and Profit and Loss
 Account together with the Notes thereon and attached thereto give in
 the prescribed manner the information required by the ‘Act’ and also
 give respectively, 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 March 31, 2011
 
 (ii) In the case of the Profit and Loss Account of the Profit for the
 year ended on that date and
 
 (iii) In the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO AUDITORS REPORT
 Referred to in Paragraph No.3 of our report of even dated.
 
 1.  In respect of its fixed assets:
 
 i) The Company has maintained proper records showing full particulars
 including quantitative details and situations of Fixed Assets on the
 basis of available information.
 
 ii) As explained to us, the management during the year has physically
 verified the fixed assets. No material discrepancies were noticed on
 such physical verification.
 
 iii) In our opinion, the Company has not disposed off a substantial
 part of its fixed assets during the year and the going concern status
 of the company is not affected.
 
 2.  In respect of its inventories:
 
 i) As explained to us, inventories have been physically verified by the
 management at regular intervals during the year. In our opinion, the
 frequency of verification is reasonable.
 
 ii) In our opinion and according to the information and explanations
 given to us, The procedures of physical verification of inventories
 followed by management are reasonable and adequate in relation to the
 size of the company and the nature of its business.
 
 iii) The Company has maintained proper records of inventories. As
 explained to us, there were no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 3. In respect of loans, secured or unsecured, granted or taken by the
 Company to/from Companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956.
 
 i) According to information & explanations given to us during the year
 the company has not granted any loans, secured/unsecured to the
 Companies, Firms & other parties covered by section 301 of the
 Companies Act 1956.
 
 ii) During the year Company had not taken any fresh loans from such
 parties, maximum amount involved and year end balance of loans taken
 from such one party was Rs. 11.62 lacs.
 
 iii) Loans are unsecured & free of interest. In our opinion and
 according to the information and explanations given to us terms &
 conditions are not prima facie prejudicial to the Company.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control system 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 &
 services. During the course of our audit, we have not observed any
 major weaknesses in internal control system.
 
 5.  In respect of transaction covered under Section 301 of the
 Companies Act, 1956:
 
 i) According to the information and explanations given to us, we are of
 the opinion that the particulars of contracts or arrangements referred
 to in Section 301 of the Act have been so entered in the register
 required to be maintained under that section.
 
 ii) According to the information and explanations given to us, during
 the year company has not entered into any transaction exceeding Rs. 5
 lacs with such parties.
 
 6.  During the year company have not accepted any fresh deposits from
 the public. Old deposits are in compliance with Provisions of Section
 58A, 58AA or any other relevant provisions of the Act. No order has
 been passed by CLB, National law tribunal or RBI or any other court or
 Tribunal.
 
 7.  In our opinion, according to the information & explanations given
 to us the internal audit system of the Company is commensurate with its
 size and nature of its business.
 
 8.  Maintenance of cost records has not been prescribed by Central
 Govt. U/S 209(1) of the Companies Act, 1956.
 
 9.  In respect of statutory dues:
 
 i) According to the information and explanations given to us and books
 & records produced & examined by us, in our opinion, undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
 statutory dues have been generally regularly deposited with the
 appropriate authorities. According to the information and explanations
 given to us, no undisputed amounts payable in respect of the aforesaid
 dues were outstanding as at 31st March, 2011 for a period of more than
 six months from the date of becoming payable.
 
 ii) According to the information and explanations given to us, The
 disputed statutory dues aggregating to Rs. 63.82 lacs, that have not
 been deposited on account of matters pending before appropriate
 authorities are as under:
 
 Sr. Name of the   Nature of the   Forum where         Amount
     Statute       dues            dispute is Pending  (Rs. in Lacs)
 
 1   Indian Income MAT             CIT (A)             27.37 
     Tax Act 1961. A.Y.1999-2000
 
 2   —Do—          Penalty         ITAT                31.94
                   A.Y 2000-2001
 
 3   Customs 
     excise        Custom Duty     Custom & Service 
                                   tax                  4.51 
     & Service 
     Tax Act                       Appellate 
                                   Tribunal
 
 10.  The Company do not have accumulated losses at the end of the year.
 The Company has not incurred cash loss during the year under audit,
 there was a cash loss in immediate preceeding year.
 
 11.  Based on our audit procedures and according to the information and
 explanation given to us, we are of the opinion that the Company has not
 defaulted in repayment of dues to Bank.
 
 12.  In our opinion and according to the information and explanations
 given to us, no loans and advances have been granted by the Company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 13.  In our opinion, the Company is not a chit fund or a nidhi / mutual
 benefit fund/society. Therefore, clause 4 (xiii) of the Companies
 (Auditors Report) Order 2003 is not applicable to the Company.
 
 14.  Proper records of dealing/ trading in shares, securities,
 investments etc have been maintained, timely entries have been made.
 All investments are in the name of the company.
 
 15.  According to information and explanations given to us, Company has
 not given any guarantee for loans taken by others from any bank or
 financial institute.
 
 16.  Based on examination of the records and information and
 explanations given to us, no term loans have been obtained by the
 Company.
 
 17.  According to the information and explanations given to us and on
 the basis of records examined by us & as represented to us by
 management, on over all basis, funds raised on short term basis have,
 Prima facie, not been used during the year for long term investments.
 
 18.  During the year, 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.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  Based on the audit procedure performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, which have
 been relied upon by us, we report that no fraud on or by the Company
 has been noticed or reported during the course of our audit.
 
                                                  For B.F. CHORDIA & CO.  
                                                   Chartered Accountants
 
                                                                    Sd/-
                                                             B.F.Chordia
                                                  Proprietor (M.No.9026)
 
 Place: Mumbai 
 Dated: 30th May 2011