We have audited the attached Balance Sheet of BGIL FILMS & TECHNOLOGIES
 LIMITED as at 31st March, 2011 and the Profit and Loss Account for the
 year ended on that date annexed thereto and the Cash Flow Statement for
 the year ended on that 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.
 
 1.  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 misstatement. An audit
 includes examining, on 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 and report thereto:
 
 2.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government in terms of section 227 (4A) of the Companies
 Act, 1956 and on the basis of such checks of the books and records of
 the company, as we considered appropriate, and in terms of the
 information and explanations given to us, we enclose in the annexure a
 statement on the matters specified in paragraph 4 and 5 of the said
 order to the extent applicable to the company.
 
 3.  Further to our comments in annexure referred to in paragraph (3)
 above, we report that:
 
 (a) 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.
 
 (b) In our opinion, the company as required by law, has kept proper
 books of account so far as appears from our examination of such books.
 
 (c) The Balance Sheet and Profit & Loss Account dealt with by this
 report are in agreement with the books of account.
 
 (d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report, comply with the Accounting
 Standards referred in sub – section 3(C) of section 211 of the
 companies Act, 1956.
 
 (e) On the basis of written representations received from the directors
 as on 31.03.2011 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31.03.2011 from
 being appointed as directors in terms of clause (g) of sub-section (1)
 of section 274 of the Companies Act, 1956.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said statements of accounts together
 with the notes appearing in Schedule of Notes subject to Non-provision
 of retirement benefits as detailed in Note no. 15 of Notes on accounts
 (Schedule No.  14), give the information required by the Companies Act,
 1956 in the manner so required and give a true and fair view in
 conformity with the accounting principles generally accepted in India:-
 
 i) In the case of Balance Sheet, of the state of affairs of the company
 as at 31st March,2011;
 
 ii) In the case of Profit and Loss Account, of the profit for the year
 ended on that date, and; 
 
 iii) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 Referred to in paragraph 3 of our report of even date,
 
 (i) (a) The company has generally maintained proper records showing
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, the Fixed Assets are physically verified by the
 management at reasonable intervals in a phased verification programme,
 which in our opinion, is reasonable having regard to the size of the
 company and the nature of its business. No material discrepancies were
 noticed on such verification.
 
 (c) During the year, the company has not disposed off any part of its
 Fixed Assets so as to affect its going concern.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventories 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.
 
 (iii) (a) According to the information and explanations given to us,
 the company has neither granted nor taken any loans, secured or
 unsecured to/from companies, firms or other parties, covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our audit, no major
 weakness has been noticed in internal controls.
 
 (v) (a) On the basis of the audit procedures performed by us and
 according to the information, explanations and representations given to
 us, we are of the opinion that, the transactions in which directors
 were interested as contemplated under section 297 and sub-section (6)
 of section 299 of the Companies Act, 1956, and which were required to
 be entered in the register maintained under section 301 of the
 Companies Act, 1956, have so entered.
 
 (b) According to the information and explanations given to us,
 transactions exceeding the value of Rs.  5,00,000/- have been made at
 prices which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 (vi) The company has not accepted any deposits as defined under
 sections 58A of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) According to the information and explanations given to us,
 maintenance of cost records have not been prescribed by the Central
 Govt. under section 209 (1) (d) of the Companies Act, 1956.
 
 (ix) (a) According to the records of the company, in our opinion the
 company is generally regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 and protection fund, employee''s state insurance, income tax, sales tax,
 wealth tax, custom duty, excise duty, cess and any other statutory dues
 applicable to it.
 
 (b) According to the information and explanations given to us, there
 are no undisputed amount payable in respect of income tax, sales tax,
 customs duty, wealth tax and excise duty were outstanding as on 31st
 March, 2011 for a period of more than six months from the date becoming
 payable except the following:
 
 Name of      Nature of Dues     Amount      Period 
 the          the amount         in Lacs     to which
 Statute      relates
 
 Service      Service Tax        30.34       01.10.2008 to
 Tax Act                                     31.03.2010
 
 Income       Income Tax         18.15       01.04.2008 to 
 Tax Act                                     31.03.2010
 
 (x) The company has no accumulated losses as at 31st March, 2011 and it
 has not incurred any cash losses during the financial year ended on
 that date or in the immediately preceding financial year.
 
 (xi) According to the records of the company examined by us and the
 information and explanations given to us, the company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 (xii) The company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) In our opinion, the company is not a chit fund or a nidhi/mutual
 benefit fund/society.
 
 (xiv) In respect of shares, securities, debentures and other
 investments, dealt in or traded by the company, proper records have
 been maintained in respect of transactions and contracts, and timely
 entries have been made therein.
 
 (xv) 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.
 
 (xvi) The Company has not obtained any term loans during the current
 year.
 
 (xvii) Based on the information and explanations given to us and on an
 overall examination of the balance sheet of the company, in our
 opinion, there are no funds raised on a short term basis which have
 been used for long term investment and vice-versa.
 
 (xviii) According to the information and explanations 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
 Act during the year.
 
 (xix) According to the information and explanations given to us, during
 the period covered by our audit report, the company has not issued any
 debentures.
 
 (xx) The company has not raised money by way of public issues during
 the year.
 
 (xxi) Based on the audit procedures performed and information and
 explanations given to us, we report that no fraud on or by the company
 has been noticed or reported during the course of our audit.
 
                                                     For SNMG & CO.
                                             Chartered Accountants
                                                 (Firm No. 004921N)
 
                                                     (NEERAJ GUPTA)
                                                           PARTNER
                                            Membership No. 87004
 
 Dated : 01-09-2011 
 Place : New Delhi