Deep Industries

1.  We have Audited the attached Balance Sheet of DEEP INDUSTRIES
 LIMITED as at 31st March, 2009 and also 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 Companys
 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 statement are free of any 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 our1 audit provides a reasonable basis
 for our opinion.
 
 3.  As required by the Companies (Auditors report) Order ,2003 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
 of the books and records of the Company as we considered appropriate
 and according to the information and explanations given to us, 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 in paragraph 3
 above, we report that :
 
 (i) We have obtained all the information and explanations, which to
 the best our knowledge and belief were necessary for the purpose of our
 audit ;
 
 (ii) In our opinion, proper books of accounts 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 Profit & Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account of the Company ;
 
 (iv) In our opinion, the Balance sheet and 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;
 
 (v) On the basis of written representation received from the directors,
 as on 31st March 2009 and taken on record by the Board of Directors of
 the Company and the information and explanations given to us, we report
 that none of the directors is disqualified as on 31st March 2009 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 subject to the effect
 of such adjustments, if any, as might have been required for and read
 together with the significant accounting policies and 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 :
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009 ; and
 
 ii.  in the case of the 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.
 
                              FOR AND ON BEHALF OF JAYESH M. SHAH & CO.
                                                  Chartered Accountants
 
 Place   : Ahmedabad                                   (JAYESH M. SHAH)
 Date    : 28thApril, 2009                                   Proprietor
 
                                                       Mem, No, : 30638
 
 Annexure to the Auditors report
 
 (Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Deep Industries Limited on the financial statements for the
 year ended 31st March, 2009.)
 
 1.  (a) The Company has maintained records showing full particulars
 including quantitative details and situation of
 
 its fixed assets.
 
 (b) As explained to us, a substantial portion of the fixed assets have
 been physically verified by the management during the year and no
 material discrepancies have been noticed on such verification..
 
 (c) In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  (a) As per information and explanation given to us, inventory of
 spares and consumables has been physically
 
 verified by the management at the year end. In our opinion the
 frequency of verification is reasonable.
 
 (b) In our opinion the procedures of physical verification of inventory
 of spares and consumables followed by the management are reasonable.
 
 (c) On the basis of our examination of the inventory records produced
 before us, 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.
 
 3.  The Company has not granted/taken any loans secured and unsecured
 loans, to/from Companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956.
 Consequently, requirement of clauses (iii.b), (iii.c), (iii,d),
 (iii.e), (iii.f) and (iii.g) of paragraph 4 of the order are not
 applicable.
 
 4.  In Our opinion and according to the information and explanations
 given to us there exists an adequate Internal Control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of stores, raw materials including
 components, plant and machinery .equipments and other assets and with
 regard to service provided by the Company, Further on the basis of our
 examination of the books and records of the Company, carried out in
 accordance with the auditing standards generally accepted in India, we
 have not observed any continuing failure to correct major weaknesses in
 the aforesaid internal control procedures.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the transactions made in
 
 pursuance of such contracts or arrangements referred to in Section 301
 of the Companies Act, 1956 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 exceeding value of Rs. 5,00,000 have been entered into
 during the financial year at prices which are reasonable having regard
 to the prevailing market prices at the relevant time.  ,
 
 
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of section 58AA of the
 
 Companies Act, 1956 and the rules framed there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of the business.
 
 8.  We are informed that maintenance of cost records has not been
 prescribed by the Central Government of India under clause (d) of
 subsection (1) of Section 209 of the Companies Act, 1956 in respect of
 the Company products.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by
 
 us, in our opinion, the Company is generally 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, custom duty, excise duty, cess and other
 material statutory dues to the extent applicable with the appropriate
 authorities in India. However, in case of delays in few instances the
 same has been deposited alongwith interest due thereon.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of wealth tax,
 service tax, sales tax, custom duty, excise duty and cess which
 
 have not been deposited on account of any dispute. The particulars of
 dues of income tax as at 31st March, 2009 which have not been deposited
 on account of a dispute, are as follows:
 
 Name of    Nature of Dues            Amount
 Statute                              (Rs. Lacs)
 
 IT. Act    Income Tax on               38.20
            Certain Disallowances
 
 Related              From where the
 Period               dispute is pending
 
 A. Y.                Com. Of Income Tax
 2004-05              (Appeals)
 
 10.  The Company does not have any accumulated losses as at 31st March,
 2009 and has not incurred any cash losses during the financial year
 covered by our audit and in the immediately preceding financial year.
 
 11.  In our opinion and according to 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.
 
 12.  In our opinion and according to the information and explanations
 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.  In our opinion, the Company is not a chit fund or a nidhi /mutual
 benefit fund/ societies. Therefore, the provisions of Clause(xiii) of
 Paragraph 4 of the Order are not applicable to the Company.
 
 14.  Based on our examination of the records and evaluation of the
 related internal controls, the Company has maintained proper records of
 transactions and contracts, in respects of its investments, securities
 and other investments and timely entries have been made therein. All
 Shares, Securities and other investments have been held by the Company
 in its own name.
 
 15.  In our opinion, the Company has not given guarantee for any loan
 taken by other from Bank/ Financial Institutions which are prejudicial
 to the interest of the Company.
 
 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 & other facilities obtained during the year
 were, applied by the Company for the purpose for which they were
 obtained.
 
 17.  According to the information and explanations given to us and on
 the basis of overall examination of the Balance Sheet of the Company,
 in our opinion, there are no short term funds raised during the year
 which have been used for long term investment.
 
 18.  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
 Companies Act, 1956.
 
 19.  The Company has not issued any debentures.
 
 20.  The Company has not raised any monies by way of public issue
 during the year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the auditing standards
 generally accepted in India, we have neither come across any instance
 of fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                              FOR AND ON BEHALF OF JAYESH M. SHAH & CO.
                                                  Chartered Accountants
 
 Place  : Ahmedabad                                    (JAYESH M. SHAH)
 
 Date   : 28thApril, 2009                                    Proprietor
                                                       Mem. No. : 30638