Batliboi

We have audited the attached balance sheet of Batliboi Ltd., as at 31st
 March, 2009 and also the profit and loss account and the cash flow
 statement for the year ended on that date annexed thereto. 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.
 
 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 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 reasonable basis for
 our opinion.
 
 As required by the Companies Auditors Report Order, 2003, issued by
 the Company Law Board in terms of sub-section (4A) of section 227 of
 the Companies Act, 1956 as amended by the Companies (Auditors Report)
 (Amendment) Order, 2004, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 1.  Attention is invited to Note No.12(c) of Schedule 17(11) regarding
 remuneration paid to the Chairman & Managing Directorin excess of the
 ceiling under Schedule XIIIofthe Companies Act 1956by Rs.27.64 Lacs,
 pending approval of the Central Government
 
 2.  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 purposes of our
 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
 those books and proper returns adequate for the purposes of our audit
 have been received from the branches not visited by us;
 
 iii. the reports on the accounts of Udhana Plant audited by the branch
 auditors of the Company have been forwarded to us and have been
 appropriately dealt with in preparing our report;
 
 iv. the balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account
 and with the audited returns received from the branch of the Company,
 
 v. in our opinion, the balance sheet, profit and loss account and cash
 flow statement dealt with by this report comply with the mandatory
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956;
 
 vi. on the basis of written representations received from the directors
 and taken on record by the Board of Directors, we report that none of
 the directors of the Company is disqualified as on 31st March, 2009
 from being appointed as director of the Company under Clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 vii. in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts subject to the effect
 of the matter referred to in para (1) above read with the significant
 accounting policies and notes to accounts in schedule 17 give the
 information required by the Companies Act, 1956, in the manner so
 required and give a true and fair view in conformity with accounting
 principles generally accepted in India:
 
 (a) In the case of the balance sheet, of the state of affairs of the
 Company as at 31 * March, 2009.
 
 (b) in the case of the profit and loss account, of the loss for the
 year ended on that date; and
 
 (c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in our report to the Members of Batliboi Ltd. for
 the year ended 31st March. 2009
 
 Our statement on the matters specified in para4and5of the Companies
 (Auditors Report) Order, 2003 (the Order) as amended by the Companies
 (Auditors Report) (Amendment) Order, 2004, is given below.  In
 preparing the said statement, we have considered the statements made
 under the aforesaid order by the branch auditors who audited the
 accounts of the Companys Udhna plant.
 
 1.  a.  The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  On the basts of the information and explanations given to us, we
 are of the opinion that the fixed assets have been physically verified
 by the management during the year at reasonable intervals having regard
 to the size of the Company and the nature of its assets. The
 discrepancies noticed on such verification were, in our opinion, not
 material and have been properly dealt with in the books of account.
 
 c.  The disposal by the Company of its fixed assets during the year
 cannot, in our opinion, be regarded as substantial and do not affect
 the going concern assumption.
 
 2.  a.  On the basis of the information and explanations given to us,
 we are of the opinion that the physical verification of inventory has
 been conducted by the management at reasonable intervals during the
 year except in case of inventory lying with third parties where
 confirmations have been obtained.
 
 b.  In our opinion and according to the information and explanations
 given to us, 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 records of inventory, we are
 of the opinion that, the Company is maintaining proper records of
 inventory. Discrepancies noticed on physical verification of inventory
 were, in our opinion, not material, and the same have been properly
 dealt with in the books of account
 
 3.  According to the information and explanations given to us, the
 Company has, during the year, not granted any loans, secured or
 unsecured to companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956.  Therefore
 paragraph 4(iii)(b), (c) and (d) of the Order is not applicable.
 
 4.  a.  According to the information and explanations given to us, the
 company has taken unsecured loan from a party covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs. 149.30 Lacs and the year end
 balance aggregates Rs.  59.70 Lacs.
 
 b.  ln our opinion, the rate of interest and other terms and conditions
 on which the aforesaid loans have been taken are prima facie, not
 prejudicial to the interests of the company.
 
 c.  The Company is regular in repaying the principal amounts as
 stipulated and has been regular in the payment of interest
 
 5.  On the basis of our examination of the books and records of the
 Company and according to the information and explanations given to us
 and having regard to the explanation (hat some of the items purchased
 are under specific marketing arrangements or goods of technical
 specification in respect of which comparable alternative quotations are
 not available, in our opinion, 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 and fixed assets and for the
 sate of goods and services. We have either come across nor been
 informed of any continuing failure to correct major weakness in the
 aforesaid internal control system.
 
 6.  a In respect of contracts and arrangements referred to in Section
 301 of the Companies Act 1956, the transactions under those contracts
 and arrangement have been entered in a summarised form in the register
 required to be maintained under that section.
 
 b. In our opinion the transactions in pursuance of contracts and
 arrangements referred to above made during the financial year have been
 made at prices which are reasonable having regard to the prevailing
 market prices at the relevant timeexcept in case ofsometransacfions
 where we are unabletocomment owing to the specialised nature of the
 items involved and absenceof any comparable prices.
 
 7.  Duririg the year.the Company has not accapted any deposits from the
 public in this regard there has not been any order by Company Law
 Board, National Company Law Tribunal or Reserve Bank of India or any
 Court or any other Tribunal
 
 8.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 9.  As explained to us maintenance of cost records has not been
 prescribed by the Central Government under clause (d) of sub-
 section(1) of section 209 of the Companies Act, 1956.
 
 10.  a.  During the year the Company has generally been regular in
 depositing undisputed statutory dues including Employees State
 insurance. Income-tax, investor Education Protection Fund, Sates-tax,
 Wealth Tax, Service Tax, Custom Duty and Excise Duly and other material
 statutory dues applicable to it with the appropriate authorities.
 
 b. According to the information and explanations given to us and the
 records of the Company examined by us, there were no dues as at 31 st
 March, 2009, of income tax, weallh tax, service tax, customs duty or
 cess that have not been deposited on account of any dispute. In respect
 of sales tax and excise duty dues not deposited on account of disputes,
 the details of amounts involved and the forum where the disputes are
 pending, are as under:-
 
 Forum where dispute is pending                 Amount (Rs. Lacs)
 
 Sales Tax Appellate/Revistonal                   54.04
 Authority-up to Commissioner Level
 Sales Tax Appellate Authority-Tribunal           40.05
 Central Excise Appellate Tribunal                 1.23
 
 11.  The Company does not have accumulated losses as at 31stMarch,
 2009. The Company has incurred cash loss during the current financial
 year.  However the company has not incurred cash loss in the
 immediately preceding financial year.
 
 12.  On the basis of the information and explanations given to us and
 the records of the Company examined by us, except in respect of the
 installments of term bans aggregating Rs. 124.58 Lacs due in March
 2009, in respect of which the Company has paid Rs. 22:82 Lacs, (The
 company has made written representation to the banks after detailed
 discussions with them for reschedulement of the remaining amount which
 is under consideration), the Company has not defaulted in repayment of
 its dues to Banks during the year. The Company has not taken any loans
 from financial institutions and has not issued any debentures during
 the year.
 
 13.  According to the information and explanations given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 14.  The provisions of special statute applicable to chit fund / mutual
 benefit fund / societies ate not applicable to the Company.
 
 15.  In respect of the Companys dealing in shares and other
 investments, proper records have been maintained of the transactions
 and contracts and timely entries have been made therein. The shares,
 securities, debentures and other investments held by the Company have
 been held in its own name except to the extent of the exemption granted
 under section 49 of the Companies Act, 1956.
 
 16.  In respect of guarantees given by the Company for loans taken by
 other parties from banks, having regard to the explanation that the
 Company has strategic business relationship with the parties and the
 parties have extended reciprocal guarantee / financial assistance on
 behalf of / to the Company, the terms and conditions of the guarantees
 are, in our opinion, not prima fade considered prejudicial to the
 interests of the Company.
 
 17.  According to the information and explanations given to us and the
 records of the Company examined by us, in our opinion, wherever the
 purpose is stipulated by the lender, the term loans raised during the
 year have been applied for such purpose.
 
 18.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we are of
 the opinion that prima-facie, as on 31st March, 2009, funds raised on
 short term basis have not been utilised for long term investments.
 
 19.  The Company has not made any preferential allotment of shares
 during the year to parties and companies covered in the register
 maintained under section 301 of the Companies Act, 1956.
 
 20.  The Company has not issued any secured debentures during the year,
 and accordingly, no securities were required to be created.
 
 21.  The Company has not raised any money by public issues during the
 year. Therefore the requirement of disclosure by the management on the
 end use of money raised by public issues and verification of the same
 is not applicable.
 
 22.  During the course of our examination of the books and records of
 the Company earned out in accordance with the generally accepted
 auditing practices in India and according to the information and
 explanations given to us, no material fraud on or by the company has
 been noticed or reported during the year.
 
                                           For V. Sankar Alyar & Co.  
                                              Chartered Accountants
 
                                                       (G. Sankar)
                                                          Partner
                                             Membership No.: 46050
 
 Place: Mumbai 
 Date : 8th May, 2009