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 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 our audit provides a reasonable basis for our opinion.

3. As required by the Company (Auditors' Report) Order, 2003 issued by the Central Government in terms 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 comments in the Annexure referred to above, we report that;

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

ii. 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 these books;

iii. the Balance Sheet and Profit and Loss Account and Cash flow Statement referred to in this report are in agreement with the books of accounts;

iv in our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with accounts standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; v. on the basis of the written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,2010 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 given to us, they 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;

a. in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at March31,2011;

b. in so far as it relates to the Profit & Loss Account, of the profit for the year ended on March 31,2011;and

c. in so far as it relates to the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR' S REPORT (Referred to in Paragraph (3) of our report of even date).

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

b) All the fixed assets have not been physically verified by the management during the year but there is regular program for verification, which in our opinion is reasonable having regards to the size of the Company and nature of its assets. The Company has substantially completed the reconciliation of its physical inventory of Fixed Assets with the book records. No material discrepancies were noticed on physical verification

c) During the year, Company has not disposed off any substantial/major part of fixed assets.

2. a) As explained to us, inventory has been physical y verified during the year by the management. In our opinion frequency of verification is reasonable.

b) In our opinion and according to information and explanation given to us and on the basis of our examination the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to size of the Company and the nature of its business.

c) In our opinion and according to information and explanation given to us and on the basis of our ' examination of records inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

3. a) The company has taken unsecured loans of Rs.29.16 Lacs from 6 directors listed in the Register maintained under 301 of the Companies act, 1956; however company has not granted any loan to parties listed in register maintained under section 301;

b) in our opinion, the rate of interest and terms and conditions on which loans have been taken are not prejudicial to the interest to company.

c) According to information and explanation given to us, in our opinion, parties from whom the loans and advances in the nature of loans have been taken, where stipulations are made, the company is regular in repayment of the principal amount and interest as stipulated.

d) According to information and explanation given to us, in our opinion, there is no overdue amount of loans taken from the parties listed in the Register maintained under section 301 of the Companies Act,1956.

4. In our opinion and according the information and explanation given to us there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regards to the sale of goods. During the - course of our audit, no major weakness has been noticed in the internal control.

5. a) In our opinion, and according to information and explanation given to us, all the transaction that need to the entered into the register maintained in pursuance of section 301 of the act have been so entered; b) As per the examination of records and according to information and explanations given to us the transaction made in pursuance of contract or arrangement entered in the register maintained under section 301 exceeding the value of five lakhs rupees during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to information and explanation given to us, in our opinion, the company has complied with the provisions of section 58Aand 58AAofthe Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975 with regard to the deposits accepted from the public. No order was passed by the National Company Law Tribunal.

7. According to information and explanation given to us, in our opinion, Company has internal audit system commensurate with the size of Company and nature of its business.

8. We have been informed by the management that no cost record have been prescribed by the Central Government under section 209(1 )(d) of the companies act, 1956 in respect of products manufactured by the Company.

9. a) As per the records of the Company, the company is generally regular in depositing with appropriate authority undisputed statutory dues including income tax, excise duty, cess and other statutory dues applicable to it except public provident fund and VAT where there was delay in ' depositing with appropriate authorities. [GST Payable for 2005-06 Rs.7733 & CST Payable for 2005-06Rs.207990,] b) According to information and explanation given, there was no disputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty there was no outstanding, as at 31/03/2011 for the period of more than six months.

10. The Company has accumulated losses of Rs.367.94 Lacs in excess of 50% of its net worth and company has incurred profit during the current year or Rs.64.88Lacs(Previous year Profit of Rs.15.49 Lacs) and cash Profit of Rs.81.69 Lacs(Previous year of Rs.32.40 Lacs)

11. Based on our audit procedure and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in repayments of dues to financial institutions and banks.

12. As per the records of the company, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13. According to information and explanation given to us, we are of the opinion that the company is neither a chit fund nor a nidhi/mutual benefit society. Hence in our opinion, the requirements of Para 4(xiii) of the order do not apply to the Company.

14. As per the records of the company and the information and explanation given to us by the management the company is not dealing in shares, securities, debentures and other investment.

15. According to information and explanation given to us, as per the records of the company, the company has not given any guarantee for loans by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to information and explanation given to us, No term loan was obtained by the Company during the period under review.

17. According to information and explanation given to us; on overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long-term investment by the company. No long term funds have been used to finance short term assets except permanent working capital.

18. The company has not made any preferential allotments to the parties and companies covered under registermaintainedundersection301 of the companies act, 1956.

19. As per the records of the company the company has not issued any debenture.

20. The company has not raised money by any public issues during the year.

21. Based upon the audit procedure performed and information and explanations given by the management, we report that no frauds on or by the company has been noticed or reported during the course of our audit. For Nilkanth Desai & Associates

Place. Surat                     Chartered Accountants

Date: 05/09/2010                   (N.P.Desai)

                                   Proprietor