1.  We have audited the attached Balance Sheet of M/s Hindustan
 Adhesives Limited as on 31st March, 2012, the Profit and Loss Account
 for the year ended on that date and 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 have 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.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003, as
 amended, issued by the Central Government of India under sub-section
 (4A) of section 227 of the Companies Act, 1956, we enclose in the
 Annexure a statement on the matters specified in paragraph (4) & (5) of
 the said Order.
 
 4.  Further to our comments in Annexure referred to above, we report
 that:
 
 (i) We have obtained all the information and explanation, which to the
 best of our knowledge and belief were necessary for the purpose 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 Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 (iv) In our opinion, the Balance Sheet and Profit and Loss Account
 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 director is disqualified as on 31
 st 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) Subject to our comments above, in our opinion and to the best of
 our information and according to the explanations given to us, the said
 statements of accounts read together with the Notes on Financial
 statements 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 Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 (b) in the case of Profit and Loss Statement, of the Profit of the
 Company for the year ended on that date; and
 
 (c) in 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)
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The management at reasonable intervals has physically verified the
 fixed assets, no material discrepancies were noticed on such
 verification.
 
 (ii) (a) The physical verification of inventory has been conducted by
 the management at reasonable intervals.
 
 (b) In our opinion the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 (c) In our opinion the Company is maintaining proper records of
 inventory and the discrepancies noticed on physical verification were
 not material and have been properly dealt with in the books of
 accounts;
 
 (iii) In respect of loans, secured or unsecured, granted or taken by
 the company to or from companies, firms or other parties covered under
 the register maintained U/s. 301 of the Companies Act, 1956, according
 to the information and explanations given to us:
 
 (a) The Company has taken unsecured loans from 5 (Five) parties covered
 under the register maintained under section 301 of the Companies Act,
 1956. The maximum amount involved in such loans during the year
 aggregates to Rs.300.17 Lacs and the closing balance outstanding as on
 31st March 2012 is Rs.186.17 Lacs.
 
 (b) In our opinion the terms and conditions of such loans taken by the
 company are prima facie not prejudicial to the interests of the company
 
 (c) There is no pre-determined schedule for repayment of unsecured
 loans.
 
 (d) As there is no schedule for repayment of unsecured loans taken by
 the company, therefore, we are not in a position to comment on steps,
 if any, taken by the company for repayment of the same.
 
 (e) The company has not granted any loans to companies, firms or other
 parties covered under the register maintained U/s. 301 of the Companies
 Act, 1956, except temporary advances given 4 (Four) such parties which
 has been recovered as stipulated The maximum amount involved in such
 loans during the year aggregates to Rs. 140.63 Lacs and the closing
 balance outstanding as on 31st March 2012 is Rs. Nil.
 
 (iv) In our opinion and according to the information and explanations
 given to us the company has an adequate internal control procedure
 commensurate with the size of the Company and the nature of its
 business, for the purchases of inventory and fixed assets and for the
 sale of goods. There is no continuing failure or weakness in internal
 control system.
 
 (v) According to the information and explanation given to us, the
 transactions that need to be entered into the register in pursuance of
 section 301 of the Companies Act, 1956 has been so entered.
 
 In our opinion and according to the information & explanation given to
 us, there were no transactions made in pursuance of contracts or
 arrangements entered in the register mentioned under section 301 of the
 Companies Act exceeding the value of Rs. Five lacs in respect of any
 party during the year.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any public deposits for which
 the provisions for compliance U/s.58 and 58AA or any other relevant
 provisions of the Companies Act, 1956 applies.
 
 (vii) The Company has an internal audit system commensurate with its
 size and nature of its business.
 
 (viii) The Central Government has not prescribed maintenance of cost
 records for the company U/s.209 (1 )(d) of the Companies Act, 1956.
 
 (ix) (a) The Company is generally regular in depositing undisputed
 applicable statutory dues including Provident Fund, Investor Education
 and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
 Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other
 statutory dues with the appropriate authorities. Except for certain
 cases of delays in deposits.
 
 (b) Following disputed dues of Sales Tax and Excise Duty/cess have not
 been deposited: - 
 
 SI. Name of the 
     Statue/         Amount      Period to which     Authority where
 No. Nature of Dues (Rs.)        Amount Relates      dispute is pending
 
 1.  The Central 
     Sales Tax          15,000/-        2006-07      Deputy 
                                                     Commissioner, Trade
                                                     Tax Noida Dy.
     Act, 1956 
    (Central 
     Sales Tax)       4,62,997/-        2007-08      Com. trade Tax,
                                                     Noida Dy.
     
                      1,32,163/-        2007-08      Com. trade Tax,
                                                     Noida Dy.
 
                           480/-        1999-00     (Sales Tax 
                                                     Assessment) 
                                                     V T O - Delhi
 
 2.   Sales Tax 
      Officer-
      Delhi              3,337/-        2003-04      Sales Tax
                                                     Officer, VAT Delhi
 
 3.   The Central
      Excise Act, 
      1944            1,95,000/-    March, 1998      High Court
     (Penalty for 
      wrong MODVAT
      Credit)
 
 (x) The Company has been registered for a period of more than five
 years, and the Company does not have any accumulated losses during the
 year under report.
 
 (xi) According to the information and explanations given to us, the
 company has not defaulted in repayment of dues to any financial
 institutions and banks during.
 
 (xii) The Company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) The provisions of any special statute applicable to Chit Fund,
 Nidhi /Mutual Benefit Fund/Societies are not applicable to this
 company.
 
 (xiv) The company is not dealing or trading in business of securities,
 debentures and other investments.
 
 (xv) According to the information and explanations given to us, the
 company has given a corporate guarantee of Rs. 14.63 crore to bank
 against loan taken by M/s Bagla Polifilms Ltd., for which approval from
 Central Government under section 295 of Companies Act, 1956 dated
 19-03-2010 has been obtained by the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans obtained in earlier years and continued to
 remain outstanding during the financial year under report are applied
 for the purpose for which the loans were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of financial statements of the company and after
 placing reliance on the reasonable assumption made by the company for
 the classification of long term and short term use of funds we are of
 the opinion that, prima-facie, long term funds have not been utilised
 for short term purposes and vice-versa.
 
 (xviii) The company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained U/s.301 of
 the Companies Act, 1956.
 
 (xix) The Company has not issued any debentures since inception.
 
 (xx) The company has not raised any money by public issue during the
 year.
 
 (xxi) According to the information and explanations given to us no
 fraud on or by the company has been noticed or reported during the year
 under report.
 
                                           For SALARPURIA & PARTNERS
 
                                       Firm Registration No. 302113E
 
                                               Chartered Accountants
 
 Place : 1008, Chiranjiv Tower,                   (KAMAL KUMAR GUPTA)
 
 43, Nehru Place, New Delhi-110 019                          Partner
 
 Date : 04.09.2012                                      M. No. 89190