1.  We have audited the attached balance sheet of Vulcan Engineers
 Limited (the Company) as at 31 December 2011 and also 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 the 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 test basis, evidences 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.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003
 (''the Order'') issued by Central Government of India in terms of
 section 227(4A) of the Companies Act, 1956 (''the Act''), on the
 basis of such checks of the books and records of the Company as we
 considered appropriate and according to information and explanations
 given to us, we annex hereto a statement on the matters specified in
 paragraphs 4 and 5 of the 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 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, 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, the balance sheet, the profit and 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 Act to the extent applicable except in respect of Accounting
 Standard (AS)-22 ''Accounting for Taxes on Income'' for recognising
 deferred tax assets (net), though there is no virtual certainty
 supported by convincing evidence that sufficient future taxable income
 will be available against which such deferred tax assets can be
 realised, due to which loss after tax for the year is lower by Rs.
 3,762,274; deferred tax assets (net) is higher and profit and loss
 account (debit balance) is lower by Rs. 15,500,050 as at 31 December
 2011.
 
 e) On the basis of written representations received from the directors
 of the Company as on 31 December 2011 and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 31 December 2011 from being appointed as a director in terms of
 clause (g) of sub-section (1) of Section 274 of the Act; and
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, subject to our
 comments in paragraph 4(d) above and read together with other notes
 thereon in Schedule ''18'', give the information required by the Act
 in the manner so required and give a true and fair view in conformity
 with the accounting principles generally accepted in India:
 
 a) in the case of the balance sheet, of the state of affairs of the
 Company as at 31 December 2011;
 
 b) in the case of the profit and loss account, of the loss of the
 Company for the year ended on that date; and
 
 c) in the case of cash flow statement of the cash flows of the Company
 for the year ended on the date.
 
 ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
 REPORT OF EVEN DATE
 
 1.  In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets are physically verified by the management according
 to a phased programme designed to cover all items over a period of
 three financial years, which in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical verification of
 fixed assets have been noticed.
 
 c) During the year, the Company has not disposed off any of its fixed
 assets.
 
 2.  According to the information and explanations given to us, the
 Company doesn''t have any inventory of materials during the year.
 Accordingly, the provisions of clause 4(ii) of the Order are not
 applicable to the Company during the year.
 
 3.  During the year, the Company has not granted/taken any loan,
 secured or unsecured to/from Companies, firms and other parties listed
 in the register maintained under Section 301 of the Act. Accordingly,
 the provisions of clause 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and
 4(iii)(g) of the Order are not applicable to the Company.
 
 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, 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 weaknesses in such internal control
 system.
 
 5.  a) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements that need to be entered into the register maintained under
 Section 301 of the Act have been recorded in the register.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under Section 301 of
 the Act have been made at prices which are reasonable having regard to
 prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from public during the
 year.
 
 7.  In our opinion, the Company has an adequate internal audit system
 commensurate with its size and nature of its business.
 
 8.  As explained to us, the Central Government has not prescribed
 maintenance of cost records under Section 209(1 )(d) of the Act in case
 of the Company.
 
 9.  a) According to the information and the explanations given to us,
 the Company has been generally regular in depositing undisputed
 statutory dues including provident fund, investor education and
 protection fund, employees'' state insurance, income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 material statutory dues with the appropriate authorities, wherever
 applicable. There are no undisputed amounts payable in respect of such
 statutory dues which have remained outstanding as at 31 December 2011
 for a period of more than six months from the date they became payable.
 
 b) According to information and explanations given to us, there are no
 dues on account of income tax / sales tax / wealth tax / service tax /
 custom duty / excise duty / cess which has not been deposited on
 account of any dispute.
 
 10.  The accumulated losses of the Company at the end of the financial
 year are not more than fifty percent of its net worth and the Company
 has incurred cash loss during the current financial year but not in the
 immediately preceding financial year.
 
 11.  According to information and explanations given to us, the Company
 has not defaulted in repayment of dues to the banks.  The Company does
 not have any borrowing from financial institutions and by way of
 debentures.
 
 12.  According to the information and explanations given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures, and other securities.
 
 13.  According to the information and explanations given to us, the
 Company is not a chit fund or a nidhi / mutual benefit fund / society.
 Accordingly, provision of clause (xiii) of paragraph 4 of the Order is
 not applicable to the Company.
 
 14.  In our opinion and according to information and explanations given
 to us, the Company is not dealing or trading in shares, securities,
 debentures and other investments. Accordingly, provision of clause 4
 (xiv) of the Order is not applicable to the Company.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks and financial institutions during the year.
 
 16.  According to information and explanations given to us, the Company
 has not taken any term loan during the year.
 
 17.  According to information and explanations given to us and on an
 overall examination of the balance sheet of the Company, we report that
 as at 31 December 2011, no funds raised on short-term basis have been
 used 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 Act.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  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
 explanations given to us, we have neither come across any instances of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such cases by the management.
 
 FOR SURESH SURANA & ASSOCIATES
 
 Chartered Accountants
 
 Firm Reg. No.: 121750W
 
 (Vinod Varma)
 
 PARTNER
 
 Membership No. 105545
 
 Place of Signature : Pune
 
 Dated : 22 February 2012