1.  We have audited the attached Balance Sheet of Arsis Cosmetics &
 Chemicals Limited as at March 31, 2011 and the Profit & Loss Account of
 the Company tor the year ended on the date.  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.
 
 2.  We conducted our audit in accordance with auditing standards
 require that we plan and perform the audit to obtain reasonable
 assurance about whether the financial statements are tree 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 (Auditor''s Report) Order, 2003
 issued by the Central '' Government of India in terms of sub section
 (4 A) of Section 227 of the Companies Act, 1956,
 
 we give in the Annexure 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 3
 above, we report that:
 
 1.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of
 such books;
 
 2.  In our Opinion, proper books of Accounts as required by Law have
 been kept by the Company so far as appears from our examination of such
 books;
 
 3.  The Balance Sheet and Profit & Loss Account dealt with by this
 reports are in agreement with the books of Accounts;
 
 4.  The Balance Sheet and Profit & Loss Account dealt with by this
 reports, Comply with the Accounting Standard referred to in Sub
 Section, (3C) of Section 211 of the Companies Act, 1956, .  %
 
 5.  On the basis of written representation received from the Directors
 as on 31st March, 2011 and on record by the Board of Directors, we
 report that none of its Director is disqualified as on March 31, 2011
 from being appointed as director in terms of Clause (g) of Sub Section
 (1) of Section 274 of the Companies Act, 1956.
 
 6.  In our Opinion and to the best of our information and according to
 the explanations given to us, the said accounts read 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
 
 Subject to:
 
 1.  Reference is invited to Note No. 15 of Schedule 14 regarding Loans
 and Advances of Rs.  49.34 lacs in respect of which Court has passed
 decree which is pending for execution, Rs.  20.18 lacs in respect of
 which company has filed suit for recovery. We are unable to form an
 opinion regarding the realisebility of the said Loans and Advances and
 Sundry Debtors.
 
 2.  On the basis of written representation received from the directors
 as on march 31, 2011 and taken on the record by the Board of Director,
 We report that none of its Directors are disqualified as on March 31,
 2011 from being appointed as Directors in terms of Clause (g) of Sub
 section 1 of Section 274 of the Companies Act, 1956.
 
 a) In the case of Balance Sheet, of the state of affairs of Company as
 at March 31, 2011 and
 
 b) In the case of Profit & Loss account of the Profit for the year on
 the date.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 (Referred in paragraph (1) of Report of even date)
 
 l. a The Company is maintaining proper r ecords showing full particulars
 including quantitative details and situation of Fixed Assets b As
 explained to us, the Fixed Assets have been physically verified by the
 management during the year and there is regular programmed of
 verification which, in our opinion, is reasonable having regard to the
 size of company and nature its Assets. No material discrepancies were
 noticed during such verification, c In our opinion and according to the
 information explanation given to us, a substantial part of Fixed
 Assets has not been disposed off by the Company during the year
 
 2 a The management has conducted physical verification of inventories
 at reasonable intervals.
 
 b In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of stock followed
 by the management are reasonable and adequate in relation to size of
 company and nature of Business c On the basis of our Examination of the
 record of inventories, we are of the opinion that the Company is
 maintaining proper records of inventories. The discrepancies noticed on
 the physical verification of inventories as compared to books records
 were not material and have been properly dealt with in the books of
 accounts.
 
 3.  a The Company has not granted any Loans, secured or unsecured, to
 the companies, forms or other parties covered in register maintained 
 under section 301 of the Companies Act, 1956.
 
 b The Company has not taken any Loan whether secured or unsecured from
 Companies, forms or other parties covered in register maintained under
 section 301 of the Companies Act, 1956.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control system commensurate
 with the size of the company and nature of Business, for the purpose of
 inventory Fixed Assets and for the sale of goods. During the course of
 our Audit no major weaknesses has noticed in the internal control.
 
 5.  a According to the information and emplane talons given to us, we
 are of the opinion that the transactions that need to be entered into 
 the register maintained under section 301 of the Companies Act, 1956, 
 have been so entered, b In our opinion and according to the information 
 and explanations given to us, the transitions made in pursuance of the 
 contracts or arrangements entered in the register maintained under 
 section 301 of the Companies Act, 1956 and exceeding the value of five 
 lakh rupees in respect of any party during the year have been reasonable 
 having regard to the prevailing market prices at the relevant time.
 
 6 The company has not accepted any deposits from the public and hence
 the provisions of section 58A of the Companies Act 1956, and the Riles
 framed there under are not applicable.
 
 7 In our opinion, the company has an internal audit system commensurate
 with its size and nature of the business.
 
 8 As informed to us, the maintenance of cost records has not been
 prescribed by the Central Government under section 209(1) (d) of the
 Companies Act 1956, in respect of the activities carried on by the
 company.
 
 9 a According to the information and explain action given to us and
 according to the books and records as produced and examined by us, in
 our opinion, the company is regular in depositing undisputed statutory
 dues including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax,
 Customs Duty, Excise Duty, Cess and other material statutory dues as
 applicable with the appropriate authorities.
 
 b According to the records of the company, there are no dues of sales
 Tax, Income Tax, Customs Duty, Wealth Tax or Cess which ha s not been
 deposited on account of any dispute .
 
 10. The company has been registered for a period not less than five
 year and its accumulated losses at the end of the financial year are
 less than fifty percent of its net worth and it has preceding such
 financial year also.
 
 12.  According to the information and explanation 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. Therefore
 the provision of Clause 4(XIV) of the Companies (Auditor''s Report)
 Order, 2003 are not applicable to the companies.
 
 13.  In our opinion, the Company is not a Chit Fund or a Mutual Benefit
 Fund/ Society.  Therefore, the provisions of Clause 4 (XIV) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion, the company is not dealing in or trading in
 securities, debentures or other investments. Accordingly, the
 provisions of Clause 4(XIV) of the Companies (Auditor''s Report)
 Order, 2003 are not applicable to the company.
 
 15.  According to the information and explanation given to us, the
 company has not given any guarantees for loans taken by others from
 banks or financial institutions.
 
 16.  In our opinion and according to the information and explanation
 given to us, the company has not availed any term loan. Therefore the
 provisions of Clause 4(XIV) of the companies (Auditor''s Report)
 Order, 2003 are not applicable to the company.
 
 17.  According to the information and explanation 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 used for long term
 investment. No long term fund has been used to finance short term
 assets except permanent working capital. .
 
 18.  According to the information and explanation given to us, the
 company has not made 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.  During the year, the company has not raised any money by way of
 public issue; paragraph 4(XX) of the Order is not applicable.
 
 21.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the course of our audit
 for the year ended 31st March 2011
 
 
                                     For, N. S. SHAH & ASSOCIATES
                                            Chartered Accountants
 
                                             NARESH S. SHAH
 
 Place:: Ahmedabad                              Proprietor
 
 Date:: 12th August,2011.              Membership # 042658