1.  We have audited the attached Balance Sheet of DECOLIGHT CERAMICS
 LIMITED, as at March 31, 2012, 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 misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosure 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.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 and the
 Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the
 Central Government of India in terms of sub- section (4A) of Section
 227 of the Companies Act, 1956 and on the basis of such checks and
 according to 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.
 
 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 it appears from our examination of
 those books;
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv.  In our opinion, the Balance Sheet, Profit & 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, to the extent applicable;
 
 v.  On the basis of written representations received from the
 directors, as on March 31, 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 read together with and
 subject to the notes thereon, 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;
 
 Subject to unutilized fund of equity preferential issue privately
 placed lying in Inter- Corporate Deposits to the tune of Rs. 28.47/-
 crore is pending for renewal / receipt from the respective parties.
 Refer Note 26(11)
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 b) In the case of the Profit and Loss Account, of the loss of the
 Company for the year ended on that date; and
 
 c) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Annexure To The Auditor''s Report (Referred to in paragraph 3 of our
 Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS
 LIMITED, for the year ended on 31st March, 2012)
 
 i.  FIXED ASSETS:
 
 a.  In our opinion, the company has maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets on the basis of available information.
 
 b.  As explained to us, the fixed assets have been physically verified
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable, having regard to size of the company and
 nature of its assets. No material discrepancies with respect to book
 records were noticed on such verification.
 
 c.  In our opinion, the company has not disposed of substantial part of
 fixed assets during the year and the going concern status of the
 company is not affected.
 
 ii.  INVENTORIES:
 
 a.  As explained to us, physical verification of inventory has been
 conducted by the management at reasonable intervals. In our opinion,
 the frequency of verification is reasonable in relation to its size and
 nature of business.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation its
 size and nature of 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 in relation to its size and nature of business. As explained
 to us, there were no material discrepancies noticed on physical
 verification of inventory as compared to the book records.
 
 iii. LOANS:
 
 a.  As explained to us, the company has granted unsecured loans to
 three parties being directors covered in the register maintained under
 Section 301 of the Companies Act, 1956. Maximum amount involved was Rs.
 45.88 lacs and the year end balance was Rs. NIL.
 
 b.  According to information and explanation given to us and in our
 opinion, the rate of interest and other terms and conditions of the
 loans granted to above parties were not prima facie prejudicial to the
 interest of the company.
 
 c.  In our opinion and according to information and explanation given
 to us, the company has received the principal amount and interest
 amount on demand.
 
 d.  According to information and explanation given to us, there was no
 overdue for the loans granted by the company.
 
 e.  As explained to us, the company has taken unsecured loans from
 three parties being directors of the company covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year from all such parties was Rs. 83.61 lacs
 and the year end balance of loans taken from such parties is Rs. 2.12
 lacs.
 
 f.  According to information and explanation given to us and in our
 opinion the rate of interest and other terms and conditions, wherever
 stipulated were not prima facie prejudicial to the interest of the
 company.
 
 g.  According to the information and explanations given to us said
 loans were repayable on demand and the repayment was within dates
 demanded.
 
 iv.  INTERNAL CONTROL
 
 In our opinion and according to the information and explanations given
 to us, there is an adequate internal control system commensurate with
 the size of the company and nature of its business for the purchase of
 inventory, fixed assets and for the sale of goods and services. During
 the course of our audit, n o major weakness has been noticed in the
 internal control system in these areas.
 
 v.  TRANSACTIONS IN PURSUANCE OF SECTION 301:
 
 a.  According to information and explanations given to us, we are of
 the opinion that the particulars of contracts or arrangements referred
 to in section 301 of the Act 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, transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to the prevailing market prices available at the relevant time.
 
 vi.  DEPOSITS:
 
 As explained to us, the company has not accepted any deposits from the
 public within meaning of Section 58A and 58AA of the Companies Act,
 1956, during the year under review.
 
 vii. INTERNAL AUDIT:
 
 In our opinion and according to information and explanations given to
 us, the internal audit system of the company is commensurate with size
 and nature of its business.
 
 viii. COST RECORDS:
 
 We have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the central government under section 209(1 )(d) of the
 Companies Act, 1956 and are of the opinion, that prima facie, the
 prescribed cost records have been made and maintained. We have not,
 however, made a detailed examination of the records with a view to
 determining whether they are accurate or complete.
 
 ix.  STATUTORY DUES:
 
 a.  As per information and explanation available to us, undisputed
 statutory dues including provident fund, investor education and
 protection fund, employee''s state insurance, income- tax, sales-tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 statutory dues applicable to it, were being generally deposited delayed
 with the appropriate authorities.  Further according to information
 explanation given to us, undisputed statutory dues accounted and
 applicable to the company as per the opinion of the management,
 outstanding as at 31st March, 2012 for a period of more than 6 months
 from the date they become payable are Value Added Tax & Central Sales
 Tax of Rs.80.99 lacs, Income tax of Rs. 3.74 lacs, Service Tax Rs. 12.44
 lacs, Professional tax of Rs.0.84 lacs and Provident Fund of Rs. 2.95.
 lacs.
 
 b.  According to the information and explanation available to us,
 details of dues of Excise Duty, Service Tax, Cess which have not been
 deposited on account of any dispute with appellate authority, are given
 below:
 
 Sr.  Name of      Nature of
                   dues         Amount    Period to    Forum where
 No.  the Statue                under 
                                dispute   which        dispute is
                                                       pending
                                Rs.in 
                                Lacs      amount
                                          relates
 
 1.   The Central  Excise 
                   duty 
                   including     4.65     2004-05       Tribunal
      Excise Act   interest
                   and penalty
      1944 *       as applicable
 
 The excise department had issued certain show cause notices amounting
 to tax liability of Rs. 493.96 lacs, which are pending at adjudication
 level and amount paid under protest for the same amounting to Rs. 408.79
 lacs.
 
 *However the company has paid under protest Rs. 2.60 lacs for the above.
 
 x.  CASH LOSSES AND ACCUMULATED LOSSES:
 
 The company has no accumulated losses at the end of the year under
 review, however it has incurred cash loss in the year under review to
 the tune of Rs. 983.60 lacs, but it has not incurred any cash loss in the
 immediately preceding financial year.
 
 xi.  DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:
 
 Based on our audit procedures and as per information and explanation
 given to us by the management of the company, we are of the opinion
 that company has defaulted in repayment of dues to banks during the
 year under review. The details of default at year end are as follows:
 
 Period of Default             Amount (Rs. In lacs)
 
 Less than 30 days                80.89
 
 30 to 90 days                   156.60
 
 However as per further information and explanations received, most
 overdue as of balance sheet date has been paid after balance sheet
 date.
 
 xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES:
 In our opinion and according to information and explanation given to
 us, no loans and advances have been granted by the company on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:
 
 In our opinion, the company is not a chit fund or a nidhi / mutual
 benefit fund / society.  Therefore, clauses 4(xiii) of the Companies
 (Auditor''s Report) Order, 2003 (as amended) is not applicable to the
 company.
 
 xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:
 
 The company is not dealing or trading in shares, securities, debentures
 and other investments.
 
 xv.  GUARANTEE FOR LOANS TAKEN BY OTHERS:
 
 According to the information and explanations given to us, the company
 has not given any guarantee for loans taken by others from any bank or
 financial institutions. Accordingly clauses 4(xv) is not applicable.
 
 xvi. TERM LOANS:
 
 In our opinion and according to the information and explanations given
 to us, on an overall basis, the term loans have been applied for the
 purpose for which they were obtained.
 
 xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:
 
 According to the information and explanations given to us, and on
 overall examination of the year end balance sheet of the company, we
 are of the opinion that prima facie, no funds raised on short-term
 basis have been used for long-term investments.
 
 xviii. PREFERENTIAL ALLOTMENT OF SHARES:
 
 According to the information and explanations given to us, during the
 year under review, the company has not made any preferential allotment
 of shares to parties or companies covered in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 xix. DEBENTURES:
 
 The company has not issued any debentures during the year under review.
 
 xx.  PUBLIC ISSUE:
 
 The company has not raised any money through a public issue during the
 year under review.
 
 xxi. FRAUD:
 
 Based upon the audit procedures performed for the purpose of reporting
 the true and fair view of the financial statements and as per the
 information and explanation given by the management, we report that no
 significant fraud on or by the company has been noticed or reported
 during the course of our audit.
 
 For, SVK & ASSOCIATES
 
 Chartered Accountants
 
 Shilpang V. Karia
 
 Partner
 
 M. No. - 102114                             Place: Morbi
 
 Firm No. - 118564W                      Date: 30th May, 2012