1.  We have audited the attached Balance Sheet of BODAL CHEMICALS
 LIMITED (the Company), as at 31st March, 2012 and also the Statement
 of Profit and Loss and the Cash Flow Statement of the Company for the
 year ended on that date annexed thereto, which we have signed under
 reference to this report. 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 financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion subject to following .
 
 We are unable to examine as per the accepted Standards of Auditing
 issued by Institute of Chartered Accountants of India, evidence
 supporting the amount of Income covered in the Disclosure under the
 Income Tax Act and its utilization thereof more particularly described
 in Note No. 37 to the Financial Statement and accordingly are unable to
 comment on the same.
 
 3.  As required by the Companies (Auditors'' 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 sub-section (4A) of Section Section 227 of ''The Companies Act,
 1956'' of India (the ''Act'') and on the basis of such checks of the books
 and records of the Company as we considered appropriate and according
 to the information and explanations given to us, we give 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 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, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 C.  The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account ;
 
 D.  In our opinion, the Balance Sheet, Statement of Profit & Loss and
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in Sub-section 3 (c) of section 211 of
 the Act ;
 
 E.  On the basis of written representations received from the
 directors, as on 31st March 2012 and taken on record by Board of
 Directors, 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 Act ;
 
 F.  In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner, the information required by the Act and subject to disclosure
 of Income of Rs. 1081.23 Lacs Under Section 132(4) of the Income Tax
 Act, 1961 more particularly described in Note No. 37 give a true and
 fair view in conformity with the accounting principles generally
 accepted in India.
 
 (i) In case of Balance Sheet, of the state of affairs of the Company as
 at 31st March, 2012
 
 (ii) In case of the Statement of Profit & Loss, of the loss for the
 year ended on that date; and
 
 (iii) In case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Referred to in paragraph 3 of our Auditors'' Report of even date to the
 members of Bodal Chemicals Limited on the financial statements as of
 and for the year ended 31st March 2012)
 
 1 a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed 
 assets.
 
 b) According to the information and explanation given to us, the
 Company has formulated a regular program of verification by which all
 the assets of the company shall be verified in a phased manner, which
 in our opinion, is reasonable having regard to the size of the Company
 and the nature of its assets. Pursuant to the program, portion of fixed
 assets have been physically verified by the management during the year
 and no material discrepancies between the book records and physical
 inventory have been noticed.
 
 c) In our opinion, and according to information and explanations given
 to us, a substantial part of its fixed assets has not been disposed off
 by the company during the year.
 
 2 a) The inventory has been physically verified by the Management
 during the year. In our opinion the frequency of verification is 
 reasonable.
 
 b) In our opinion, the procedures of physical verification of
 inventories followed by the Management were reasonable and adequate in
 relation to the size of the company and the nature of the 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 and have been properly dealt with in
 the books of account.
 
 3 a) 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 Act, and therefore, clause of rates of interest 
 and other terms & conditions and repayment is not applicable to the 
 company.
 
 b) The Company had taken unsecured loan from the 3 (Three) parties
 listed in the register maintained under Section 301 of the Companies
 Act, 1956. The maximum amount involved during the year was Rs. 508.21
 lacs & the year end balance of loans was Rs. Nil.
 
 c) According to the information and explanation given to us, repayment
 of the principal amount is as stipulated and payments of interest,
 wherever applicable, have been regular.
 
 d) In our opinion the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 Company.
 
 4 In our opinion and according to the information and explanation given
 to us, there is an adequate internal control system commensurate with
 the size of the Company and the nature of its business with regard to
 the purchase of inventory and fixed assets and for the sale of goods.
 Further, on the basis of our examination of the books and records of
 the Company, and according to the information and explanation given to
 us, no major weakness have been noticed or reported.
 
 5 a) In our opinion and according to the information given to us, the
 particulars of contracts or arrangements referred to in Section 301 of 
 the Act have been entered in the register required to be maintained 
 under that section.
 
 b) In our opinion, and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs 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.
 
 6 In our opinion and according to the information and explanation 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) Rues, 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.
 
 7 The internal audit function is carried out by outside agency
 appointed by the management, the scope and coverage of which, in our
 opinion requires to be enlarged to be commensurate with the size and
 nature of its business.
 
 8 We have broadly reviewed the books of accounts and records maintained
 by the company relating to the manufacturing of Chemical products
 comprising Dyes, Dyes Intermediates and Basic Chemicals where, pursuant
 to the Rules made by the Central Government of India, the maintenance
 of cost records has been prescribed under clause (d) of sub-section (1)
 of Section 209 of the Act, and are of the opinion that, prima facie,
 the prescribed accounts and records have been made & maintained. We
 have not, however, made a detailed examination of the records with a
 view to determining whether they are accurate or complete.
 
 9 a) According to the information and explanations given to us and
 records of the company 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, service tax, customs
 duty, excise duty and other material statutory dues as applicable, with
 the appropriate authorities.
 
 b) According to the information and explanation given to us and the
 records of the Company examined by us, there are no dues of Wealth tax
 and Sales Tax which have not been deposited on account of any dispute
 and the particulars of dues of Income Tax, Services Tax, Customs Duty
 and Excise Duty as at 31st March 2012 which has not been deposited on
 account of a dispute, are as follows :
 
                   Statement of Disputed Dues
 Name of the 
 Statute           Nature of    Amount   Period to which    Forum where
                                                            dispute is
                   the Dues     (Rs. in 
                                lacs)    amount relates     pending
 
 
                   Income Tax   0.19     A.Y. 1999-2000     Income Tax 
                                                            Appellate 
                                                            Tribunal
 
                   Income Tax  61.57     A.Y. 2007-2008     Income Tax
                                                            Appellate
                                                            Tribunal
 
 Income Tax Act, 
 1961.             Income Tax  29.65     A.Y. 2008-2009     Commissioner
                                                            of
                                                            Income Tax 
                                                            (Appeals)
 
                   Income Tax  87.91     A.Y. 2007-2008     Commissioner
                                                            of
                                                            Income Tax 
                                                            (Appeals)
  
                   Penalty      0.59     A.Y. 2006-2007     Commissioner 
                                                            of
                                                            Income Tax 
                                                            (Appeals)
 
                   Income Tax  68.13     A.Y. 2007-2008     Commissioner
                                                            of
                                                            Income Tax 
                                                            (Appeals)
 
                   Excise Duty  1.18          2010-2011     CESTAT, 
                                                            Ahmedabad
 
                   Excise Duty  1.58          2011-2012     Commr.C.Ex.
                   &                                        Penalty 
                                                            Ahmedabad-I
 
 Central Excise 
 Act, 1944.        Excise Duty  1.65          2011-2012     Commr.C.Ex.
                                                            Ahmedabad-I
 
                   Excise Duty 15.80          2011-2012     Commr. 
                                                            Central 
                                                            Excise,
                   & Penalty                                Surat-II
 
                   Service Tax 12.08          2006-2007     The 
                                                            Commisioner
                                                 to         (Appeals),
                                                            Central
                                              2010-2011     Excise - 
                                                            Ahmedabad
 
                   Service Tax  1.35          2011-2012     CESTAT, 
                                                            Ahmedabad
 
 
                   Service Tax 59.18          2005-2006     CESTAT, 
                                                            Ahmedabad
                   and Penalty                   to
                                              2007-2008
 
 
 
 Service Tax       Service Tax 23.21          2005-2006     The 
                                                            Commisioner
 (Finance Act 
 1994)                                                      to(Appeals),
                                                            Central
 
                                              2007-2008     Excise - 
                                                            Ahmedabad
 
                   Service Tax  0.23          2010-2011     Commi.S.Tax
                                                            Ahmedabad-I
 
                   Service Tax  0.62          2011-2012     Commi.S.Tax
                   & Penalty                                Ahmedabad-I
 
 Customs Act, 
 1962.             Duty,
                   Penalty,    10.11          2007-2008     CESTAT, 
                                                            Additional 
                                                            West
                   Interest &                               Zonal Bench,
                   Fine                                     Ahmedabad.
 
 
 10.  The company''s accumulated losses at the end of the financial year
 are less than fifty per cent of its net worth. it has incurred cash
 losses in current financial year however it has not incurred cash
 losses during immediately preceding financial year.
 
 11.  According to records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to banks and financial institutions as at Balance
 sheet date.
 
 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.
 
 13.  The provisions of any special statue applicable to chit fund,
 nidhi, or any mutual fund / societies are not applicable to the
 company.
 
 14.  In our opinion and according to the information and explanation
 given to us, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  According to the information and explanation given to us the
 Company has not given guarantee for loans taken by others from banks or
 financial institutions.
 
 16.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, the term
 loans raised during the year were prima facie been utilized for the
 purposes for which they were obtained.
 
 17.  According to the information and explanations given to us and on
 overall examination of the balance sheet and cash flow statement of the
 Company, we report that Company has used funds raised on short term
 basis for long term investments.
 
 18.  According to the information and explanations given to us, during
 the period covered by our audit report, the Company has made
 preferential allotment of equity shares to parties and companies
 covered in the register maintained under Section 301 of the Companies
 Act, 1956.In Our opinion the price at which shares have been issued is
 not prejudicial to the interest of the company.
 
 19.  According to the information and explanations given to us, during
 the year covered by our report, the Company has not issued any secured
 debentures.
 
 20.  The Company has not raised any money by way of a public issue
 during the year.
 
 21.  During the course of our examination of the books of account and
 records of the company carried out in accordance with the generally
 accepted auditing practices in India, and according to the information
 and explanation given to us, we have neither come across any instance
 of material fraud on or by the Company, noticed or reported during the
 year, nor we have been informed of such case by the management.
 
 
 
                                           For Mayank Shah & Associates
 
                                        (Firm Registration No. 106109W) 
                                                  Chartered Accountants
 
                                                             (M.S.Shah)
 
 Place : Ahmedabad                                              Partner
 
 Date : 31/08/2012                                       Mem. No. 44093