We have audited the attached Balance Sheet of Silver Smith India Ltd.
 as on 31st March 2011, the related Profit & Loss Account and 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. 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
 disclosure 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.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 issued by the Central Government in terms of section 227 (4A) of the
 Companies Act, 1956 we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 & 5 of the said order.
 
 2.  Further to our comments in the Annexure referred to 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, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of
 those books.
 
 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 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 the written representation received from the
 directors, as on 31st March 2011, we report that none of the directors
 is disqualified as on 31s'' 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 give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i.  in so far as relates to the Balance Sheet of the state of affairs
 of the Company as at 31st March 2011.
 
 ii.  in so far as relates to the Profit & Loss Account, on the Loss of
 the company for the year ended on that date ; and
 
 iii.  in so far as relates to the Cash Flow Statement, of the cash flow
 for the year ended on the date.
 
 Annexure referred to in paragraph 1 of the Auditors'' Report to the
 Members of Silver Smith India Ltd. on the Accounts for the Year ended
 31st March 2011.
 
 i) a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) The Fixed Assets of the Company have been physically verified by the
 management during the year and 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 the Company during the year.
 
 ii) a) The inventory has been physically verified by the management
 during the year.  In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion, 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, in our
 opinion, the company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 iii) a) As informed, the Company has taken Unsecured loan from two
 Companies covered in the register maintained under Section 301 of the
 Companies Act, 1956. The Maximum amount involved during the year was
 Rs.l 10 Lakh- and year ended balance of loan taken from such party was
 Rs.100 Lakh.
 
 b) As informed, the Company has not taken any loan from Companies,
 firms or other parties covered in the register maintained under Section
 301 of the Companies Act, 1956 and as such clause 4(iii) (a) to 4 (ii)
 (d) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
 not applicable.
 
 c) In our opinion, the rate of interest and other terms and conditions
 on which loan has been taken from company listed in the register
 maintained under section 301 of the Companies Act, 1956 are not, prima
 Facie, prejudicial to the interest of the company.
 
 d) The Company is regular in repaying the principal amounts as
 stipulated and has been regular in payment of interest.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weakness in internal control system
 of the Company.
 
 v) a) According to the information and explanations given to us, we are
 of the opinion that the particulars of all contracts or arrangements
 that need to be entered into the register maintained in section 301 of
 the Act have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of Rs.5 Lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 vi) The Company has not accepted any deposits from the public.
 Accordingly, paragraph 4 (vi) of order is not applicable.
 
 vii) In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii) The Central Government of India has not prescribed the
 maintenance of cost records under clause (d) of sub- section (1) of
 Section 209 of the Act for any of the products of the Company.
 
 ix) a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing with appropriate authorities
 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 and other material
 statutory dues applicable to it except delays of few days in TDS.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or .  otherwise
 of the Company in depositing the same.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, service tax, customs duty and excise duty were in arrears as at
 31s1 March 2011 for a period of more than six months form the date they
 became payable.
 
 c) According to the information and explanations given to us, there are
 no dues of sales tax, income tax, customs duty, wealth tax, service
 tax, excise duty and cess, which have not been deposited on account of
 any dispute.
 
 x) In our opinion, the accumulated losses of the Company are not more
 than 50% of its net worth and it has not incurred any cash losses
 during the financial year ended on that date or in the immediately
 preceding financial year.
 
 xi) According to the records of the Company examined by us and the
 information and explanations given to us, the company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 xii) According to the information and explanations given to us and
 based on the documents and records produced 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.
 
 xiii) 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.  Therefore, the provisions of clause 4(xiii) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 xiv) In our opinion, the company is not dealing or trading in shares,
 securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 xv) In our opinion, and according to the information and explanations
 given to us, the company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 xvi) According to the information and explanations given to us, the
 Company has not taken any term loan.  Accordingly, the provisions of
 clause 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the Company.
 
 xvii) According to the information and explanations given to us, the
 Company and on overall examination of the Balance Sheet of the company,
 we report that the no funds raised on a short-term basis which have
 been used for long-term investment.
 
 xviii) According to the information and explanations 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. Accordingly, the provisions of clause 4(xvi)
 of the Companies (Auditor''s Report) Order, 2003 are not applicable to
 the Company.
 
 According to the information and explanations 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. Accordingly, the provisions of clause 4(xvi) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 According to the information and explanations given to us, during the
 period covered by our audit report, the Company has not issued any
 debentures.
 
 During the period covered by our Audit Report, the Company has not
 raised any money by public issues.  Therefore, the provisions of clause
 (xx) of the Companies (Auditor''s Report) Order 2003 are not applicable
 to the Company.
 
 Based upon the audit procedure performed for the purpose of reporting
 the true and fair view of the financial statements and as per the
 informations 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.
 
 for Khanna Gulati & Associates
 
 Chartered accountants
 
 Firm Registration No 012190N
 
 (Rohit Khana)
 
 Partner
 M. No. 084878
 
 Place: New Delhi
 Date : 31st May, 2011