1.  We have audited the attached Balance Sheet of Texmo Pipes and
 Products Limited (the Company) for the year ending on 31s, March,
 2011 and the related Profit & Loss Account and Cash Flow Statement of
 the Company for the year ended on that date annexed thereto, which we
 have signed under reference to this report. 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 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(s). 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 ouraudit provides a reasonable basis
 forouropinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003, as
 amended by the Companies (Auditors'' Report) (Amendment) Order 2004,
 issued by the Central Government of India in terms of Section 227 (4A)
 of the Companies Act, 1956 and on the basis of such checks of the books
 and records of the Company as we considered appropriate and according
 to the information and explanations given to us during the course of
 the audit, we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said order.
 
 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 necessaryforthepurposeofourAudit;
 
 (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, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreementwiththebooksof account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and 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 to the extent applicable;
 
 (e) On the basis of the written confirmations received from the
 Directors and taken on record by the Board of Directors, we report that
 none of the Directors of the Company is disqualified as on 31.03.2011
 from being appointed as a Director of the Company in terms of Clause
 (g) of Subsection (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 financial statement read
 together with the notes thereon, 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 the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March,2011;
 
 (ii) in the case of the Profit & Loss Account, of the Profit of the
 Company 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 THE AUDITORS REPORT
 
 (As referred to in paragraph 03 of our Report to the members of Texmo
 Pipes and Products Limited on the accounts as at and for the year ended
 31st March 2011)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of its fixed
 assets;
 
 (b) As explained to us all the fixed assets have been physically
 verified by the management during the year, which in our opinion is
 reasonable having regard to the size of the Company and nature of its
 assets. No material discrepancies were noticed on such verification as
 compared with the book records.
 
 (c) During the year, the Company has not disposed off substantial part
 of fixed assets and the going concern status of the Company is
 notaffected;
 
 (ii) (a) The inventory has been physically verified at reasonable
 intervals during the year by the Management;
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verification of inventory
 followed by the Management is 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 bookrecordswerenotmaterial.
 
 (iii) (a) The Company had granted unsecured loans to two Companies
 covered in the register maintained under Section 301 of the Companies
 Act, 1956. The maximum amount involved was Rs.9,00,00,000/- to two such
 Companies.The year end balance is of Rs.2,32,39,999/-;
 
 (b) The Company had outstanding unsecured loan from a Company covered
 in the register maintained under Section 301 of the Companies Act,
 1956. The outstanding maximum amount was Rs. 1,71,94,530/-from one such
 Company. The year end balance is of Rs. 1,68,745/-.
 
 (c) In our opinion, the rate of interest and other terms and conditions
 on which loans have been given to and taken from such parties listed in
 the register maintained under section 301 of the Companies Act, 1956
 are not, prima facie, prejudicial to the internal the company;
 
 (d) There is no stipulation as to the repayment of loan and interest
 thereon, hence reply to Clauses (iii)(c) & (iii)(d)isnil;
 
 (iv) In our opinion, there is adequate internal control system
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory, fixed assets and for the
 sale of goods. During the course of our audit, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system;
 
 (v) (a) Based on the audit procedures applied by us and according to
 the information and explanations given to us, we are of the opinion
 that the transactions that need to be entered into the register
 maintained under section 301 ofthe Companies Act, 1956 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
 rupees five lakhs in respect of any party during the year have been
 made at prices which are reasonable having regard to prevailing market
 prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Section 58A, 58AA or any other relevant provisions ofthe
 Companies Act, 1956 and the rules framed there under;
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) The requirement of maintenance of cost records as prescribed by
 the Central Government u/s 209(1) (d) of the Companies Act, 1956 is not
 applicable to the Company.
 
 (ix) (a) According to information and explanations given to us and
 records of the Company examined by us, the Company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including provident fund, employees'' state insurance, income tax, sales
 tax, custom duty, excise duty, cess and other statutory dues to the
 extent applicable to it. There are no undisputed statutory dues as
 referred to above as at 31 * March 2011 outstanding for a period of
 more than six months from the date they become payable.  (b) According
 to the information and explanations given to us and the records of the
 Company examined by us, there are no dues in respect of income tax,
 sales tax, wealth tax, service tax, custom duty, excise duty, cess
 which have not been deposited on account of any dispute except for the
 following:
 
 S   Name of the Statue   Nature of    Forum where    Period to  Amount    
 No                         dues     dispute pending  which       in
                                                      relates   Rs.lakhs
 
 1.  Entry Tax Act        Entry Tax   MP High Court,  2007-08     39.23
                                      Jabalpur
 
 2.  MP VAT Act           VAT         MP High Court,  2007-08    125.88
                                      Jabalpur
 
 3.  Central Sales
     Tax Act              CST         MP High Court,  2007-08     91.22
                                      Jabalpur
 
 (x) Clause (x) of paragraph 4 of the order is not applicable to the
 Company;
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted inrepayment of dues to bank.
 The Company had no transactions with financial institutions and had no
 debentures outstanding during the year;
 
 (xii) The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and othersecurities;
 
 (xiii) The nature of activities of the Company does not attract any
 special statute applicable to chit fund and nidhi / mutual
 benefitfund/societies;
 
 (xiv) The Company does not deal or trade in shares, securities,
 debentures and other investments;
 
 (xv) On the basis of the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks orfinancial institutions;
 
 (xvi) On the basis of the records examined by us, and relying on the
 information compiled by the Company for co- relating the funds raised
 to the end use of term loans, we have to state that, the Company has,
 prima facie, applied the term loans for the purposes for which they
 were obtained;
 
 (xvii) According to information and explanations given to us and on an
 overall examination of the financial statements of the Company and
 after placing reliance on the reasonable assumptions made by the
 Company for classification of usage of funds, we are of the opinion
 that, prima-facie, as at the close of the year, short term funds have
 not been utilized for long term investment;
 
 (xviii) The Company has not made any preferential allotment of shares;
 
 (xix) During the year, the Company has not issued any debentures;
 
 (xx) We have verified the end use of money raised by Public Issue as
 disclosed in Note. 05 of Schedule 22.  Pending Utilization of the funds
 raised through Public Issue a sum of Rs. 288.52 Lakhs has been
 temporarily invested in Bank Deposits.
 
 (xxi) Based upon the audit procedures performed in accordance with the
 generally accepted auditing practices in India and according to the
 information and explanations given to us, we report that we have
 neither come across any instances of fraud on or by the Company,
 noticed or reported during the year, nor we have been informed of such
 cases by the Management.
 
 Place :Burhanpur (MP)
 
 Date: 11th August2011
 
 For Pankaj Somaiya& Associates
 
 Firm Registration No. 010081C
 
 Chartered Accountants
 
 CA Pankaj Somaiya
 
 Partner
 
 Membership No.079918