1.  We have audited the attached Balance Sheet of BLACK ROSE INDUSTRIES
 LIMITED as at 31st March 2012 and also the Statement of Profit and 
 Loss of the Company 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.
 
 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 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 presentation of the
 financial statements. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) (Amendment) Order 2004
 (together the ''Order''), issued by the Central Government of India
 in terms of Section 227(4A) of the Companies Act, 1956, we enclose in
 the Annexure a statement on the matters specified in paragraphs 4 and 5
 of the said Order.
 
 4.  We have to further 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;
 
 iii) The Balance Sheet and the Statement of Profit and Loss dealt with
 by this report are in agreement with the books of account;
 
 iv) In our opinion, the Balance Sheet and the Statement of Profit and
 Loss dealt with by this report comply with the accounting standards
 referred to in sub-section (3C) of section 211 of the Companies Act,
 1956;
 
 v) On the basis of written representations received from the directors,
 as on 31st March, 2012 and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March,
 2012 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31s* March 2012;
 
 (b) in the case of the Statement of Profit and Loss, of the Profit for
 the year ended on that date; and
 
 (c) 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 maintained proper records showing full
 particulars including quantitative
 
 details and situation of fixed assets.
 
 (b) All the assets have not been physically verified by the management
 during the year but there is a regular programmer of verification which,
 in our opinion, is reasonable having regard to the size of the Company
 and the nature of assets. No material discrepancies were noticed on
 such verification.
 
 ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the
 
 frequency of verification is reasonable.
 
 (b) 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 records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. The discrepancies noticed on verification between the
 physical stocks and the book records were not material.
 
 iii) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties in the register maintained under
 section 301 of the Companies Act, 1956 (the Act). Accordingly sub-
 clauses iii(b) to iii(d) of Paragraph 4 of the Order are not
 applicable.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems 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 and services.  During the course of our audit, no major weakness
 has been noticed in the internal controls system.
 
 v) (a) Based on the audit procedures applied by us and according to the
 information and explanations
 
 provided by the management, we are of the opinion that the particulars
 of contracts or arrangements that need to be entered into the register
 maintained under section 301 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the registers maintained under Section 301 and
 exceeding the value of five lacs rupees in respect of any party during
 the year have been made at prices which are reasonable having regard to
 prevailing market prices at the relevant time.
 
 vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Companies Act,
 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
 to the deposits accepted from the public. According to the information
 and explanations given to us, no Order has been passed by the Company
 Law Board or the National Company Law Tribunal or the Reserve Bank of
 India or any Court or any other Tribunal on the Company.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii) We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209(1) (d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.
 
 ix) (a) According to the records of the Company, the Company is
 generally regular in depositing with
 
 appropriate authorities undisputed statutory dues including provident
 fund, investor education protection fund, employees'' state insurance,
 income-tax, sales-tax, service tax, wealth tax, custom duty,
 excise-duty, cess and other statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax,
 service tax, customs duty and excise duty were outstanding, as at 31st
 March, 2012 for a period of more than six months from the date they
 became payable except for the followings:
 
 Nature of 
 dues                    Financial year          Amount (Rs)
 
 Income tax
 (A.Y 2005-06)              2004-05             154,218/- 
 
 Central Sales- tax         2007-08              68,690/-
 
 Central Sales-tax          2008-09             175,043/- 
 
 Central Sales-tax          2009-10              74.568/-
 
 Labour Welfare Fund        2007-08                  48/-
 
 x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred any cash losses during the financial year
 covered by our audit and in the immediately preceding financial year.
 
 xi) Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to financial institution
 and bank.
 
 xii) Based on our examination of documents and records, we are of the
 opinion that the Company has not granted loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities
 
 xiii) The Company is not a nidhi/mutual benefit/society therefore
 paragraph 4(xiii) of the said order is not applicable.
 
 xiv) Based on our examination of the records and evaluation of the
 related internal controls, the Company has maintained proper of
 transactions and contracts in respect of its dealing in shares,
 securities, debentures and other investments and timely entries have
 been made therein. The aforesaid securities have been held by the
 Company in its own name, except to the extent of the exemption granted
 under Section 49 of the Companies Act, 1956.
 
 xv) As per the information and explanations given to us by the
 management, the Company has not given any guarantee for loans taken by
 others from bank or financial institution.
 
 xvi) Based on the information and explanations given to us by the
 management, term loans were prima facie applied for the purpose for
 which the loans were obtained.
 
 xvii) To the best of our knowledge and belief and according to the
 information and explanations given to us, and on the overall
 examination of the balance sheet of the Company, in our opinion, funds
 raised on short-term basis have, prima facie, not been used for long
 term investment.
 
 xviii) 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.
 
 xix) During the period covered by our audit report, the Company has not
 issued debentures and therefore paragraph 4 (xix) of the said order is
 not applicable.
 
 xx) During the period covered by our audit report, the Company has not
 raised money by Public Issues and therefore paragraph 4 (xx) of the
 said order is not applicable.
 
 xxi) 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 and on behalf of
                                             KARN AVAT & CO
 
                                             Chartered Accountants 
                                             Firm Regn. No. 104863W
 
 192, Dr. D.N. Road                         (KRISHNA KARUNDIA)
 
 Mumbai-400001                               Partner
 
 Dated: 25th May, 2012                       Membership No. 036681