2. We conducted our audit in accordance with the 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 evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Auditors Report) Order. 2003 issued by the Central Government of India, in terms of sub section (4A) of Section 227 of the Companies Act, 1956. We enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the Annexure referred to above and subject to the notes given in Schedule - "Q" we state that.

(i) We have obtained all the information and explanations, which to the best of our knowledge belief were necessary for the purpose of our audit.

(ii) In our opinion, the Company as required by law, has kept proper books of account so far as appears from our examination of the books.

(iii) The balance sheet and profit and loss account dealt with, by this report are in agreement with the books of accounts as submitted to us.

(vi) In our opinion, the Balance sheet and profit and loss account dealt with, by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representation received, from the directors as on 31st March 2007, and taken on records by the Board of Directors, we report that none of the directors is disqualified, as on 31st March 2007 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations gives to us, the said accounts read along 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.

(a) In the case of the balance sheet of the state of the affairs of the Company, as at 3 1st March 2007;

(b) In the case of the profit and loss account of the profit for the year ended on that date.

(c ) In the case of cash flow statements, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Re: SHREE RAJIV LOCHAN OIL EXTRACTION LTD.

(Referred to in paragraph 1 of our report of even date)

I.

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Management during the year has physically verified all the assets. No material discrepancies were noticed on such verification.

c) The Company has not disposed off any assets during the year. Therefore the going concern status of the company has not been affected.

II.

a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

b) In our opinion and according to the explanation given to us, the procedures of physical verification of inventories 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 records of inventories, we are of the opinion that, the company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book record were not material and has been properly dealt with in the books of accounts.

III.

a) (i) The company has not taken any unsecured loans from parties, listed in the register maintained U/s 301 of Companies Act, 1956.

b) (ii) There is one Company covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted loans. The maximum amount involved during the year was Rs.2500000/- and the year end balance of loans granted to such parties was Rs.2500000/-.

c) (i) Above 3(a)(i) loans are interest free and without any stipulation as to the time of payment.

IV. In our opinion and according to the information & explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business for the purchase of inventory and 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 internal control system

V.

a) According to the information & explanations given to us, we are of the opinion that transactions which need to be entered in the register maintained u/s 301 of the Companies Act, 1956.have so been entered.

b) In our opinion and According to the information & explanations given to us, the transaction made in pursuance of contract or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. Five lakh in respect of any party during the year have been made at prices which are reasonable having regards 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 of the companies Act, 1956 and the rules framed thereunder. Therefore, the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003 is not applicable to the company. Further we are informed that no order has been passed by the Company Law Board, or Company National Law Tribunal, or Reserve Bank of India or any court or any other Tribunal.

VII. In Our opinion , the company has internal audit system commensurate with its size & the nature of its business.

VIII. In our opinion and according to the information and explanations given to us, maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 are not applicable to the company. Therefore the provisions of clause 4(viii) are not applicable to the company.

IX.

a) As explained to us, the company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, excise duty, cess, wealth tax, service tax and other material statutory dues applicable to it. Except provident fund , E.S.I.C.

b) According to the information & explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were in arrears as at 31st March 2007 for a period of more than six months from the date they became payable.

c) According to the information given to us, there are no dues of sales tax, income tax ,wealth tax, service tax , custom duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

X. The company does not have accumulated losses as at the end of the financial order exceeding fifty percent of its net worth and has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

XI. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to bank or any financial institutions.

XII. In our opinion and according to the information and explanations given to us & based on the documents, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII In our opinion & according to the explanation given to us, the company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XIV In our Opinion , The company is not dealing in or trading in shares , securities , debenture and other investments Accordingly the provisions of clause 4(xv) of the Companies (Auditors 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. Accordingly the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XVI In our opinion & according to the explanation given to us, the term loans have been applied for the purpose for which they were used.

XVII According to the information and explanations given to us and on an overall examination of the balance sheet & cash flow of the company, we report that the no funds raised on short-term basis have been used for long term investment & vice versa.

XVIII The company has not made allotment of shares to any parties during the year. Therefore, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XIX The company has not issued any debentures during the year. Therefore the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

XX The company has not raised any money by way of public issue during the year. Therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the companys.

XXI In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year. Therefore, the provisions of clause 4(xxi) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

Place: Raipur                        For S.K. BHAMKAR & ASSOCIATES
Date : 7.08.2007                          Charted Accountants

                                          (SANTOH BHAMKAR)
                                              Proprietor
                                        Membership No. 076457