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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes t 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.

As required by the Companies (Auditor's 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 hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to in paragraph 2 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, the Statement of Profit and Loss 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 Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in sub- section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from directors as on 31st March, 2012 and taken on record by the Board of Directors, we are of the opinion that none of the directors are disqualified as on 31st March, 2012 from being appointed as directors in terms of clause (g) of sub-section (1) of section 274 of the Companies Act 1956;

I) Attention is Invited to Note No.24 regarding preparation of financial statements on going concern basis although accumulated losses of the Company exceed its net worth. We are informed that the reference of the Company is registered with the Board for Industrial and Financial Reconstruction under Section 15 of that Act.

ii) Attention is also invited to Note No.5 regarding non-provision of interest expense on term loans and cash credit, Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the ' Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

(ii) in so far as it relates to the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date.

(iii) in so far as it relates to the Cash Flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEXURE TO AUDITOR'S REPORT

Referred to in Paragraph 2 of our report of even date

1. In respect of its fixed assets: -

a. The Company has maintained records showing full particulars including quantitative details and situation of its fixed assets and the same is being updated.

b. As explained to us, the fixed assets have been physically verified by the Management at the end of the accounting 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 physical verification as compared to the book records.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year.

2. In respect of its inventories:

Since there is no stock-in-trade of either raw materials or finished goods during the year under review, above clause is not applicable to the Company.

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:

Company has not taken any loan from parties covered in the register maintained under section 301 of the Companies Act, 1956. Maximum Balance outstanding during the year is Rs.

1,85,606/- and closing balance is Rs. 1,85,606/-. In our opinion and accordinq to the information and explanations given to us the interest and other terms and conditfit said loans are not prima facie prejudicial to the interest of the Company

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public.

7. The Company does not have any formal Internal audit system.

8. During the year Company has not carried out any Manufacturing or Trading activity, and hence, maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 does not arise.

9. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Exdse Duty, Service tax, 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, 2012 for a period of more than six months from the date of becoming payable, except Statutory Bonus Rs. 65,551, Gratuity payable Rs. 1,00,000/- and Leave Encashment Rs.1,63,131/

b. According to the information and explanations given to us, there are no disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities.

10.. The Company has accumulated losses exceeding its net worth and has incurred cash losses during the year and has incurred cash loss in the immediately preceding previous year.

11. The company has defaulted In repayment of dues to banks in respect of term loans and cash credit amounting to Rs. 11,59,01,248/-. No repayment has been made in respect of the same since March 2002. Further, no provision / payment have been made in respect of interest accrued and due on the same.

12. In our opinion and according to the information and explanation 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 (Auditor's Report) Order 2003 is not applicable to the Company.

14. The Company has not entered into transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments.

15. The Company has not given guarantees for loans taken by others from banks or financial Institutions.

16. The Company has not raised any new term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no short-term funds have been utilized for the long-term purpose.

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 during the year. '

20. No new public issue was made by the Company during the year.

21. 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 that causes the financial statements to be materially misstated.

                                           For RAJENDRA & CO.

                                           Chartered Accountants

                                          (Firm Registration 

                                           No. 1Q8355VW.

                                           APURVA R. SHAH 

                                           Partner

PLACE: Mumbai

Dated: 31st August 2012