We have audited the attached Balance Sheet of M/s IDEAL CARPETS
 LIMITED, as at 31st March 2012 and also Profit & Loss Account of the
 Company 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.
 
 We have conducted our audit in accordance with auditing standards
 generally accepted in India.  Those Standards require us to 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 and report that:
 
 1.  As required by the Companies (Auditors5 Report) Order 2003 as
 amended Companies (Auditors'' Report) (Amendment) Order 2003 by issued
 by the Central Government of India, in terms of sub- section (4A) of
 section 227 the Companies Act, 1956. We enclose in the annexure a
 statement on die matters specified in paragraph 4 & 5 of the said order
 and to the extend as applicable on the company.
 
 2.  Further to our comments in the Annexure referred to 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) hi our opinion, the company has kept proper books of account as
 required by law so far as appears from our examination of those books &
 records.
 
 c) The Balance Sheet and the Profit & Loss Account dealt with by this
 report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet and Profit & 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 except AS-22
 & AS-15
 
 e) 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.
 
 3.With out qualifying your opinion, we draw attention to the following:
 
 i) Note No. 2(1)(c) wherein no adjustment has been made in these
 financial statement on account of profit or loss or even diminution in
 the assets, or increase in liability if any, of the subsidiary company
 at USA.
 
 Subject to Point 2(d) above, 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.
 
 1.  in the case of the Balance Sheet, of the state of the company''s
 affairs as at 31st March, 2012 and
 
 2.  in the case of the Profit & Loss Account, of the PROFIT for the
 year ended on that date and
 
 Annexure to the Auditor''s Report to the shareholders of Ideal Carpets
 Limited as referred to in paragraph I of our report even date on the
 accounts for the year ended on 31st March 2012.
 
 i) a) The Company has maintained proper records to show full
 particulars including quantitative details and situation of its fixed
 assets.
 
 b) The fixed assets of the company have been physically verified during
 the year by the management and no material discrepancies between the
 book records and the physical verification have been noticed.
 
 c) In our opinion and according to the information & explanations given
 to us, substantial part of fixed assets has not been disposed off
 during the year.
 
 ii) a) The stock of finished goods, stores, spare parts, raw materials
 and shares & stocks of the company at all its location have been
 physically verified by the management. In our opinion, the frequency of
 verification is reasonable.
 
 b) In our opinion, the procedure of physical verification of stocks
 followed by the management is reasonable and adequate in relation to
 the size of the company and nature of its business.
 
 c) The discrepancies noticed on verification between the physical
 stocks and the book records were not material.
 
 iii) The Company has not taken unsecured loans from companies, firm or
 other patties listed in the register maintained under section 301 of
 the Companies Act, 1956. The company has not granted unsecured
 loans/advances to companies, firms or other parties listed in the
 register maintained under section 301.
 
 iv) In our opinion and according to the information and explanations
 given to us during the course of audit there are adequate internal
 control procedures commensurate with the size of the Company and nature
 of its business with regard to purchase of inventory, fixed assets and
 with regard to 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, we have neither come across,
 nor have been informed of any continuing failure to correct major
 weakness in the aforesaid internal control procedures.
 
 v) a) In our opinion and according to the information and explanations
 given to us, the transactions that need to be entered into the Register
 Maintained under Section 301 of the Companies Act, 1956 have been so
 entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transaction of purchase of goods and materials and
 sale of goods, materials and services made in pursuance of contracts or
 arrangements entered in the Register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rupees five lakh in
 respect of any party, during the year have been made at prices which
 are reasonable having regard to the prevailing market prices for such
 goods, materials or services or the prices at which the transactions
 for similar goods or services have been made with other parties.
 
 vi) In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposit from the public
 within the meaning of section 58 A and 58AA of the Companies Act, 1956
 and rules framed there under.
 
 vii) As explained to us, the company has an internal audit system,
 which in our opinion is adequate.
 
 viii) To the best of our knowledge and as explained, the Central Govt,
 has prescribed maintenance of the cost record u/s 209(1)(d) of the
 Companies Act, 1956 for the products of the Company and the same is
 under compilation.
 
 ix) a) According to the records of the company Investor Education &
 Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues applicable to it have been in general regularly deposited with the
 appropriate authorities. However, there are some delays in depositing
 Provident Fund money of employees.
 
 b) According to information and explanations given to us and records of
 the Company examined by us these are no dues of Sales Tax, income Tax,
 Customs duty and Wealth tax that have not been deposited on account of
 any dispute.
 
 x) The company has no accumulated losses as at 31st March 2012 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year. 
 
 xi) According to records of the company examined by us and the
 information and explanation given to us, the company not defaulted in
 repayment of dues to any bank or financial institution.  
 
 xii) According to the information and explanations given to us, 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 provisions of any special statue applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 Company.
 
 xiv) In our opinion, the company has not entered into any transaction
 of sale or, purchase of investments during the year. Further, the
 shares, securities, debentures and other securities have been held by
 the Company in its own name.
 
 xv) In accordance with the information and explanations given to us,
 the Company has not given any guarantees for loans taken toy others
 from banks or financial institutions. 
 
 xvi) In our opinion, the term loans taken by the Company have been
 applied for the, purpose for which they have been obtained.
 
 xvii) On the basis of an overall examination of the balance sheet of
 the Company in our opinion and according to the information and
 explanations given to us, there are no funds raised on short-term
 basis, which have been used for long-term investments, and vice versa.
 
 xviii) The Company has not made any preferential allotment of shares to
 parties and companies covered in the Register maintained under section
 301 of the Companies Act, 1956 during the year.
 
 xix) The Company has not raised any money by issue of debentures during
 the year.
 
 xx) The Company has not raised any money by way of 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
 course of our audit.
 
                                        For PRAKASH K PRAKASH
 
                                        Chartered Accountants
 
                                        Firm Regn No: 000415N
 
 Place: New Delhi                       Prakash K Gupta
 
 Dated: 03.09.2012                      Partner
 
                                        Membership No: 080320