We have audited the Balance Sheet of Alchemist Limited as at 31st
 March, 2012, the related Statement of Profit and Loss and Cash Flow
 Statement 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 these
 financial statements based on our Audit.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. These 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.
 
 We Report that:
 
 1.  As required by the Companies (Auditors'' Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) Amendment Order, 2004,
 issued by the Central Government of India in terms Section 227(4A) of
 the Companies Act, 1956, we enclose in the annexure a statement on the
 matters specified in Paragraph 4 & 5 of the said order.
 
 2.  Further to our comments in the Annexure referred to in paragraph 1
 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 our
 audit
 
 (ii) In our opinion the proper books of account, as required by law,
 have been kept by the Company, so far as appears from our examination
 of those books of account.
 
 (iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement are in agreement with the books of account;
 
 (iv) Based on representations received from the Directors as on 31st
 March, 2012 and taken on record by the Board of Directors, we report
 that none of the Directors is disqualified as on 31st March 2012 from
 being appointed as a Director in terms of clause(g) of sub-section(1)
 of section 274 of the Companies Act, 1956;
 
 (v) In our opinion and to the best of our information and according to
 the explanations given to us, the financial statement dealt within by
 this report comply with the Accounting Standards referred to in Sub
 Section (3C) of Section 211 of the Act and 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 the company''s
 affairs as at 31s1 March, 2012.
 
 (b) in the case of the Statement of Profit & Loss, of the Profit of the
 Company for the year ended on that date and,
 
 (c) in the case of Cash Flow Statement of the cash flow for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 Referred to in Paragraph 1 of the Auditor''s Report to the Members of
 the company as required by the Companies (Auditors'' Report) Order, 2003
 as amended by the companies (Auditor''s Report) Amendment Order, 2004,
 issued by the Central Government of India and on the basis of such
 checks as we considered appropriate and according to the information
 and explanations given to us, we further report that: (i) (a) The
 company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 (b) The company has formulated a regular program of verification by
 which all the assets of company have been physically verified. No
 material discrepancies were noticed on physical verification conducted
 by the management during the year as compared with the book records.
 
 (c) There was no disposal of a substantial part of fixed assets.
 
 (ii) (a) The physical verification of stocks of finished goods, stores,
 spare parts and raw materials was carried out during the year by the
 management.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventories
 followed by the management was reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 (c) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material having regard to the size of
 operations of the company.
 
 (iii) (a) According to the information & explanations given to us the
 company has granted loans to Subsidiary Company, Alchemist Foods
 Limited (Party covered in the register maintained under section 301 of
 the Companies Act, 1956) for which the maximum amount outstanding
 during the year was Rs.  11813.43 Lac and amount outstanding on 31st
 March, 2012 was Rs. 11774.38 Lac, also granted loan to subsidiary
 company, Alchemist Infrastructures Pvt. Ltd. (Party covered in the
 register maintained under section 301 of the Companies Act, 1956) for
 which the maximum amount outstanding during the year was Rs. 7.50 Lacs
 and amount outstanding on 31st March 2012, was Rs. 7.50 Lacs and also
 the Company has taken unsecured loan from KDS Corporation Pvt. Ltd.
 (Party covered in the register maintained under section 301 of the
 Companies Act, 1956) for which the maximum amount outstanding during
 the year was Rs. 37561.69 Lacs and amount outstanding on 31 st March,
 2012 was Rs 27917.69 Lacs.
 
 (b) The Company has taken/given interest free loans and other term and
 conditions of the loan taken/ given by the company to/from parties
 covered in register maintained under Section 301 are not prima-facie
 prejudicial to the interest of the company.
 
 (c) The company is regular in repayment.
 
 (d) There is no overdue amount in respect of the loan taken/given by
 the company.
 
 (iv) In our opinion, the internal control procedures are adequate and
 commensurate with the size and the nature of its business for purchase
 of inventories and fixed assets and with regard to the sale of goods.
 (v) (a) In our opinion and according to the information and
 explanations given to us, the transactions made in the pursuance of
 contracts or arrangements, that need to be entered into the register
 maintained under section 301 of the Companies Act, 1956 for the year
 have been so entered.  (b) In our opinion and according to the
 information and explanations given to us, the transaction made in
 pursuance of contracts or arrangements entered in the register
 maintained under section 301 of the Companies Act, 1956 aggregating
 during the year to Rs.5,00,000/- or more in respect of each party have
 been made at prices which in our opinion, are reasonable having regard
 to prevailing market price at relevant time.
 
 (vi) The Company has not accepted deposits from the public during the
 year covered by our audit report.  However, the deposits have been
 repaid during the year and also the balance stands in the books at the
 year end, the Company has complied with the provisions of Section
 58Aand 58AAof the Act 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) We have
 broadly examined the books of account maintained by the company
 pursuant to the rules by the Central Government for the maintenance of
 cost records under section 209 (l)(d) of the Companies Act, 1956 and
 are of the opinion that, prima facie, the prescribed accounts and
 record have been made and maintained. We have however, not made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.  
 
 
 (ix) (a) Undisputed Statutory dues including provident fund, investors
 education and protection fund, employees state insurance, income tax,
 sales tax, wealth tax, service-tax, customs duty, excise duty, cess and
 other material statutory dues, as applicable, have generally been
 regularly deposited with the appropriate authorities, though there has
 been a slight delay in the few cases. No undisputed amount payable in
 respect thereof were outstanding at the year-end for a period of more
 than six month from the date they became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues outstanding in respect of Sales tax, Income tax, Customs
 Duty, Excise Duty, Cess and any other Statutory Dues to be deposited on
 account of any dispute.  
 
 (x) The company has no accumulated losses and has not incurred any cash
 losses during the financial year and in the immediately preceding
 financial year.  
 
 (xi) According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to financial
 institutions, banks and other securities.
 
 (xii) According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) The Company in not a Chit fund or a nidhi/mutual benefits
 fund/society. Therefore the provisions of Clause 4(xiii) of the Order
 are not applicable to the company.  
 
 (xiv) According to the information and explanations given to us, the
 company is not dealing or trading in shares, securities and debentures.
 Therefore, provisions of clause 4(xiv) of the Order are not applicable
 to the Company.
 
 (xv) In our opinion and according to the information & explanation
 given to us, the terms and conditions on which the company has given
 guarantee to the tune of Rs. 1877 Lacs for loans taken by others from
 banks and financial institutions are prima-facie not prejudicial to the
 interest of the company.
 
 (xvi) In our opinions and according to the information and explanation
 given to us, the term loans have been applied for the purpose for which
 they were raised
 
 (xvii) 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 funds raised on short term basis have been utilized for
 long term investments and vice versa.
 
 (xviii) The Company has made preferential allotment of 6,40,000 shares
 to KDS Corporation Pvt. Ltd., Company covered in the register
 maintained u/s301 of the Companies Act, 1956, during the year. In our
 opinion the price at which shares have been issued is not prejudicial
 to the interest of the company.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any secured debentures during the year.
 Accordingly, the provision of Clause (xix) of the Order is not
 applicable to the Company.  
 
 (xx) During the year, the Company has not raised any money by way of
 the public issue.
 
 (xxi) To the best of our knowledge and belief and according to the
 information and explanation given to us, no fraud on or by the company
 has been noticed or reported during the year.
 
                                                                  sd/-
 
                                                    CA. Ashish Chhabra
 
                                                               Partner
 
                                                 Membership No: 507083
 
                                                 N. Kumar Chhabra & Co.
 
 Dated: 30th August,2012                         Chartered Accountants
 
 Place: New Delhi                        Firm Registration No: 000837N