1.  We have audited the attached balance sheet of Batliboi Ltd., as at
 31st March, 2011 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 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
 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.
 
 3.  As required by the Companies Auditor''s 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 (Auditor''s Report)
 (Amendment) Order, 2004, 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 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 report on the accounts of Udhna 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 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, 2011 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 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) I n the case of the balance sheet, of the state of affairs of the
 Company as at 31s1 March, 2011.
 
 (b) in the case of the profit and loss account, of the profit 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, 2011
 
 Our statement on the-matters specified in para 4 and 5 of the Companies
 
 (Auditors Report) Order, 2003 (the Order) as amended by the
 
 Companies (Auditor''s 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 Company''s Udhna plant.
 
 1.  a.  The Company has maintained proper records showing full
 
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  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.  Since there is no disposal of substantial part of fixed assets
 during the year, the preparation of financial statements on a going
 concern basis is not affected on this account.
 
 2.  a.  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.  The Company is maintaining proper records of inventory.  The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material and the same have been properly dealt
 with in the books of account.
 
 3.  Based on audit procedures applied by us and according to the
 information and explanations given to us, the Company has 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, sub-clause (b) to (d) of sub-para (iii) of para 4
 of the Order is not applicable.
 
 4.  a Based on audit procedures applied by us and according to
 
 the information and explanations given to us, the company has taken
 unsecured loans from four parties covered in the register maintained
 under section 301 of the Companies
 
 Act, 1956. The maximum amount involved during the year wasRs. 132.00 Lacs
 and the year end balance aggrega tes Rs. 122.00 Lacs.
 
 b.  In 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 interest of the company.
 
 c.  The Company is regular in repaying the principal amounts on
 aforesaid loans taken as stipulated and has been regular in the payment
 of interest.
 
 5.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that 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, 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
 sale of goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in the
 internal control system of the Company.
 
 6.  a.  According to the information and explanations given to us,
 
 we are of the opinion that the particulars of all contracts or
 arrangements that need to be entered in the register maintained under
 Section 301 of the Companies Act, 1956, have been so entered in a
 summarized form.
 
 b. In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts and
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956, and exceeding the value of Rs. 5,00,000 in
 respect of any party, during the year, have been made at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 7.  During the year, the Company has not accepted 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 the size and nature of its business.
 
 9.  The Centra! Government has not prescribed maintenance of cost
 records 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 Provident Fund,
 Employees'' State Insurance, Income-tax, Investor Education Protection
 Fund, Sales-tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty
 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, no undisputed amounts payable in
 respect of income tax, wealth tax, service tax, customs duty, excise
 duty or cess were in arrears, as at 31st March 2011 for a period of
 more than six months from the date they became payable.
 
 . c. 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             Rs. Lacs
 
 Sales Tax Appellate / Revisional
 Authority-up to Commissioner Level          53.62
 
 Sales Tax Appellate Authority-Tribunal      35.66
 
 Central Excise Appellate Tribunal            1.24
 
 11.  The Company does not have accumulated losses as at 31st March,
 2011. The Company has not incurred cash loss during the current
 financial year but had incurred cash loss in the immediately preceding
 financial year.
 
 12.  Based on audit procedures applied by us and according to the
 information and explanations given to us, the Company has not defaulted
 in repayment of its dues to Banks during the year.
 
 13.  According to the information and explanations given to us and
 based on our examination of the books of account, 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 are not applicable to the Company.
 
 15.  In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly-the
 provisions of Clause (xiv) of Para 4 of the Order are not appiicable.
 
 16.  In respect of guarantees given by the Company for loans taken by a
 related party from banks, having regard to the
 
 explanation that the Company has strategic business relationship with
 the related party and the party has extended reciprocal guarantee /
 charge on its current assets for financial assistance availed by the
 Company, the terms and conditions of the guarantees are, in our
 opinion, not prima facie 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 and the cash
 flow statement, prima-facie, funds raised on short term basis have not
 been utilised for long term investment.
 
 19.  The Company has made a preferential allotment of Redeemable
 Non-cumulative Preference Shares during the year to parties covered in
 the register maintained under section 301 of the Companies Act, 1956.
 The price at which these shares have been issued is not prejudicial to
 the interest of the company.
 
 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 issue during the
 year. Therefore, the requirement of disclosure by the management on the
 end use of money raised by public issue and verification of the same is
 not applicable.
 
 22.  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, no fraud on or by the company has been
 noticed or reported during the year.
 
                                      For V. Sarvfcar Aiyar & Co.  
                                            Chartered Accountants 
                                            Firm Regn. No-109208W
 
                                                              Sd-
                                                 (S. Venkatraman)
 
 Place: Mumbai                                            Partner
 Date: 18th May, 2011.                      Membership No.:034319