1.  We have audited the attached Balance Sheet of Allied Resins &
 Chemicals Limited as at 31st March 2010, and the related Profit and
 Loss Account and Cash Flow Statement for the year ended on that date
 annexed thereto, which we have signed under reference to this report.
 These financial statements are the responsibility of the companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 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 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 Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of The Companies Act, 1956 of India (the Act) and on
 the basis of such checks of the books and records of the company as we
 considered appropriate and according to the information and
 explanations given to us, we give in the Annexure, a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Attention is drawn to the below mentioned Notes on Schedule 16 to
 the accounts, consequential effect thereof on the years profit and
 year-end net assets being not ascertainable -
 
 4.1 Note A. 8 regarding accounting of retirement benefits related
 liabilities have not been actuarially ascertained and provided for in
 keeping with Accounting Standard (AS) 15 - Employee Benefits,
 
 4.2 Note B. 5 regarding non-availability of confirmation of balances in
 respect ot Sundry Creditors, Sundry Debtors, Loans and Advances and
 Unsecured Loans,
 
 4.3 Note B. 11 indicating non-recognition of deferred tax to comply
 with Accounting Standard (AS) 22 - Accounting of Taxes on Income.
 
 5.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) Subject to Note B.5 referred to in paragraph 4.2 above 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, Profit and Loss Account and Cash
 Flow Statement dealt with by this report, subject to the Notes A.8 and
 B.11 referred to in paragraphs 4.1 and 4.3 above, comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 (e) On the basis of written representations received from the
 directors, and taken on record by the Board of Directors, none of the
 directors is disqualified as on 31st March 2010 from being appointed as
 a director in terms of clause (g) of sub-section (1) of Section 274 of
 the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto, subject to the Notes
 A.8and B. 11 referred to in paragraphs 4.1 and 4.3 above, give in the
 prescribed manner the information required by the Act and subject to
 our comments in paragraphs 4 above regarding consequential effect of
 the Notes referred thereunder on the years profit and year-end net
 assets being not ascertainable, give a true and fair view in conformity
 with the accounting principles generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st March 2010;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 
 ANNEXURE to the Auditors Report of ALLIED RESINS & CHEMICALS LIMITED
 
 
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 Members of Allied Resins & Chemicals Limited on the financial
 statements for the year ended 31st March 2010]
 
 1.  (a) The company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the company have not been physically verified
 by the management during the year.
 
 (c) In our opinion and according to the information and explanations
 given to us, no fixed asset item has been disposed of by the company
 during the year.
 
 2.  (a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory 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 inventory records, in our
 opinion, the company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  The company has neither granted nor taken any loan, secured or
 unsecured, to and from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, 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. Further, on the basis of our
 examination of the books and records of the company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year to be entered in the register required to be
 maintained under that Section. Accordingly, commenting on transactions
 made in pursuance of such contracts or arrangements does not arise.
 
 6.  The Company has not accepted deposits during the year from the
 public under the directives issued by the Reserve Bank of India and
 provision of Sections 58A and 58AA of the Act, 1956 and the rules
 framed thereunder. However, there are outstanding public deposits
 amounting to Rs.61.75 lacs, which have all matured. Pursuant to the
 negotiated settlement vide Memorandum of Understanding dated 14th
 December 2007, the outstanding amount is payable in 72 installments.
 The company has paid 27 installments till 31st March 2010.
 
 7.  The company has an internal audit system. However, the scope and
 area of the internal audit should be enlarged to make it commensurate
 with the size and nature of the business of the company.
 
 8.  The Central Government has prescribed maintenance of cost records
 under Section 209(1 )(d) of the Act in respect of certain products of
 the company. We have broadly reviewed the books of accounts and records
 of the company and are of the opinion that prima facie, the prescribed
 accounts and records have been maintained.  We have not, however,
 carried out a detailed examination of such accounts records.
 
 9. (a) According to the information and explanations given to us and
 records of the company examined by us, in our opinion, the company is
 not regular in depositing undisputed statutory dues including Provident
 Fund, Investors Education and Protection Fund, Employees State
 Insurance, Income Tax, Sales Tax, Service Tax with the appropriate
 authorities. The extent of the arrears of statutory dues outstanding as
 at 31st March 2010, for a period of more than six months from the date
 they became payable, in respect of sales tax is as follows :-
 
 
 Name of the statute                         Amount(Rs. lacs)
 
 Central Sales Tax                                 15.05
 
 Delhi Sales Tax                                   28.53
 
 
 (b) According to the information and explanations given to us and the
 records of the company examined, the particulars of dues of Income Tax,
 Sales Tax and Excise Duty as at 31st March 2010 which have not been
 deposited on account of disputes are as follows :-
 
 
 Name of the 
 statutes     Nature of dues      Amounts     Period to 
                                              which the   Forum where
                                  (Rs./lacs)  amounts     dispute is
                                              relates     pending
 
 Income Tax 
 Act 1961     Search and seizure 
              conducted            2030.29    1.4.1988 
                                              to 25.8.98  Honble High
              by Income Tax Dept                          Court Calcutta
 
 Central Exc
 ise Act,     Demand pending
 1944         against show           28.60    Feb .06 to
                                              Aug .07      Additional
              cause notice 
              for hearing                                  Commissioner
 
 Central 
 Excise Act,  Demand pending 
 1944         against show           322.75   2008-09      Commissioner
 (Anti Evas
 ion Unit)    cause notice 
              for hearing
 
 Central 
 Excise Act,  Revision of
 1944         Appeal Order            26.58   July 06 to
                                              March 07     Tribunal
 
 Central 
 Excise Act,  Demand pending
 1944         against show            12.50   Jan 06 to
                                              March 08     Tribunal
              cause notice 
              pending before 
              Tribunal
 
 West Bengal 
 Sales Tax    Demand raised 
              by certificate          15.95   1980-1981 
                                              to  1986-    Taxation 
                                                           Revisional
 Act, 1941    officer (Stay 
              granted by                      1987         Board
              Calcutta 
              High Court)
 
 West Bengal 
 Sales Tax    Verification 
              of challans              6.04   1979-80      Assistant
 Act,1941                                                  Commissio
                                                           ner of
                                                           Sales Tax
 
 West Bengal 
 Sales Tax     Stay petition 
               and appeal hearing     868.36  1993-1994
                                                  to       Taxation 
                                                           Revisional 
 Act, 1941                                    1999-2000    Board
 
 
 10.  The company has no accumulated losses as at 31st March 2010 and it
 has not incurred cash losses in the financial year ended on that date
 or in the immediately preceding financial year.
 
 11.  According to the records of the company examined by us and the
 information and explanation given to us, the company has not defaulted
 in repayment of settlement dues to any financial institution or dues to
 bank or debenture holders as at the balance sheet date.
 
 12.  In our opinion and according to the information and explanations
 given to us, the company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/societies are not applicable to the
 company.
 
 14.  In our opinion, the company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  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 during the year.
 
 16.  In our opinion and according to the information and explanations
 given to us and the books and records of the company examined, the
 company has not obtained any term loans during the year.
 
 17.  On the basis of an overall examination of the balance sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  In respect of the debentures issued by the company in earlier year
 the company has created security or charge.
 
 20.  The company has not raised any money by public issues 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 instance of
 fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 
                                                   For L. B. Jha & Co.
 
                                                 Chartered Accountants
 
                                              Registration No. 301088E
 
                                                          K. K. Bhanja
 
 Place: Kolkata                                                Partner
 
 Date: The 28th May, 2010                        Membership No.: 14722