1.  We have audited the attached Balance Sheet of India Foils Limited
 as at 31st March, 2009 and also the relative Profit and Loss Account
 and Cash Flow Statement for the financial year ended on that date, both
 of which we have signed, under reference to this report. 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 statements are free of material misstatements. 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 the management as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.  ¦
 
 3.  As indicated in Note 8 on Schedule 17 in respect of the Hoera unit,
 the operation of which is under suspension since 15th September 2003
 till the year end.
 
 (i) The Company has neither ascertained nor provided for liability
 towards salaries and wages, provident fund, employees state insurance
 and other employee benefits from the aforesaid date of suspension of
 operation till 31s March, 2009.
 
 (ii) Gratuity and leave liability were actuarially ascertained and
 provided for based on the information available till the aforesaid date
 of suspension of operation.
 
 In view of this we are unable to comment on the extent of compliance of
 the recognition and measurement requirements of Accounting Standard 15
 on Employee Benefits.
 
 4.  Subject to our remarks in para 3 above, we report as follows:-
 
 i) 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.
 
 ii) The Balance Sheet and Profit and Loss Account dealt with in this
 report are in agreement with the books of account.
 
 iii) In our opinion and to the best of our information and according to
 the explanations given to us, the Balance Sheet and Profit and Loss
 Account read with notes thereon comply with the Accounting Standards
 referred to in Section 211(3C) of the Companies Act, 1956 to the extent
 necessary for the purpose of this engagement, subject to our remark in
 para 3 above
 
 iv) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements read with
 the notes thereon give the information required by the Companies Act,
 1956 in the manner so required and subject to our remark in para 3
 above the impact of which on the loss for the year and the net assets
 as at 31st March, 2009 cannot be ascertained, give true and fair view.
 
 - in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009.
 
 - in the case of the. Profit and Loss Account, of the loss for the year
 ended on that date.
 
 - in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS REPORT
 
 ANNEXURE REFERRED TO IN PARAGRAPH 4.i OF THE AUDITORS
 
 REPORT TO THE MEMBERS OF INDIA FOILS LIMITED.
 
 i (a) The Company has maintained unit wise fixed assets registers and /
 or compiled item wise list showing particulars of all its fixed assets.
 The aggregate value shown by these records agree with the gross value
 of fixed assets as per the books of accounts of the company:
 
 (b) Based on the information and explanation furnished to us, the
 Company has physically verified fixed assets during the year as per the
 cycle of verification and no material discrepancies were noticed.
 
 (c) During the year, Company has not disposed of any substantial /major
 part of fixed assets.
 
 ii (a) As explained to us, the inventory has been physically verified
 during the year by the management. In our opinion, the frequency of
 verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventory
 followed by the management isreasonable and adequate in relation to
 the size of the Company and the nature of its business.  .
 
 (c) In our opinion and according to the information and explanations
 given to us and on the basis of our examination of the records of
 inventory, the Company is maintaining proper records of inventory. The
 discrepancies noticed onphysical verification of inventory as compared
 to the book records were not material and have been properly dealt with
 in the books of account.
 
 iii (a) According to the information and explanations given to us, the
 Company has neither granted nor taken any loans to / from parties
 listed in the Register maintained under Section 301 of the Companies
 Act, 1956. Accordingly, sub- clauses (b), (c) & (d) (e) (f) and (g) of
 clause (iii) of Para 4 of the Order are not applicable.
 
 iv In our opinion and according to the information and explanation
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business for
 purchase of inventory and fixed assets and for sale of goods. Further
 on the basis of our examination and according to the information, and
 explanations given to us, we have neither come across nor have been
 informed of any instance of major weakness in the aforesaid internal
 control procedures.
 
 v (a) In our opinion, to the best of our knowledge and belief and
 according to the information and explanations given to us, we are of
 the opinion that the transactions that needed to be entered into the
 register maintained under Section 301 have been so entered.
 
 (b) In our opinion, and to the best of our knowledge and belief and
 according to the information and explanations given to us, the
 contracts and arrangements were entered into at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 vi In our opinion and according to the information and explanations
 given to us, the directive issued by the Reserve Bank
 
 of India, and the provisions of Section 58 A, 58AA or any othe relevant
 provisions of the Companies Act 1956, and the rules framed thereunder
 with regard to the deposits accepted from the public are not applicable
 to the company.
 
 vii The Company has an internal audit system commensurate with the size
 and nature of it business.
 
 viii We have broadly reviewed the books of account maintained by the
 Company relating to the manufacture of Aluminium
 
 Foils pursuant to the rules made by the Central Government fo the
 maintenance of cost records under Section 209(l)(d) of the Companies
 Act, 1956 and are of the opinion that prima facie the prescribed
 accounts and records have been maintained. We have not, however, made a
 detailed examination of the records with view to determining whether
 they are accurate or complete.
 
 ix (a) According to the records of the Company and information and
 explanations given to us, the Company has been generally regular in
 depositing undisputed statutory dues including Provident Fund,
 Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service
 tax, Customs Duty, Excise Duty and cess with the appropriate
 authorities. There are no undisputed statutory dues outstanding as of
 31s March, 2009 for a period of more than six months. However, the
 following are not paid:- (i) Dues in respect of provident fund and
 employees state insurance in respect ofHoera unit, the operation of
 which is under suspension since. September 2003 till the end of the
 year as indicated in Note 8 of Schedule 17 (ii) Other dues of Deferred
 Sales Tax, aggregating Rs.487.86 lacs, as set out below, which is
 outstanding as at the end of the year:-
 
 Period to which the amount relates Due Date Amt. (Rs. in Lacs)
 
 Quarter ended 30.09.96        31.10.05            12.98
 Quarter ended 31.12.96        31.01.06            25.62
 Quarter ended 30.03.97        30.04.06            31.45
 Quarter ended 30.06.97        31.07.06            29.76
 Quarter ended 30.09.97        31.10.06            42.45
 Quarter ended 30.12.97        31.01.07            51.39
 Quarter ended 30.03.98        30.04.07            51.58
 Quarter ended 30.06.98        31.07.07            33.74
 Quarter ended 30.09.98        31.10.07            48.82
 Quarter ended 30.12.98        31.01.08            41.61
 Quarter ended 30.03.99        30.04.08            53.02
 Quarter ended 30.06.99        31.07.08            65.44
 
 Note: Interest due on above Rs. 80.86 lacs
 
 (b) As at the year-end according to the records of the Company and
 information and explanations given to us, there are no disputed dues on
 account of income tax, sales tax, customs duty, excise duty, cess,
 wealth tax, service tax which have not been deposited with respective
 authorities except as unden-
 
 Nameofthe  Nature of Amount    Period to which  Forum where the
 statute    dues      (Rs. In   the amount       disputes are pending
                       lacs)    relates
 
 West 
 Bengal 
 Sales                        1982-1984,1986-
 Tax Act/ 
 West Bengal                  1988,1993-94
 Value 
 Added Tax 
 Act/ to                      1999-2001 &
 Central 
 Sales Tax
 Act                   1740.60    2003-04     Revision Board (Tribunal)
                                               Additional Commissioner
 
                               2001-02 to 2002- of Commercial Taxes
                        444.32  03                       (Revision)
 
                               2004-05 to 2005- Deputy Commissioner
 
                        101.31  06              (Appeals)
 
                       2286.23
 
 Central 
 
 Excise Act  Excise                          Commissioner of Central 
            Duty       915.09  1986 to 2003  Excise
 
 x The accumulated losses of the Company as at 31s March, 2009 are more
 than fifty percent of its networth and it has also incurred cash losses
 during the financial year ended on that date and in the immediately
 preceedingfinancial year.
 
 xi As at the year end, the Company has not defaulted in repayment of
 dues to banks. The Company has not issued any debentures.  
 
 xii According to the information and explanations, the Company has not
 granted any loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 
 xiii According to the information and explanations, the Company does
 not have a chit fund / nidhi /mutual benefit fund / society. Hence, the
 provisions of any special statute as specified under clause (xiii) of
 Paragraph 4 of the Order are not applicable to the Company.
 
 xiv According to the information arid explanations, the Company is not
 a dealer or trader in securities.
 
 xv According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 xvi To the best of our knowledge and belief and according to the
 information and explanation given to us, term loans have been applied
 for the purpose for which they were obtained.
 
 xvii According to the information and explanations given to us and on
 an overall examination of the balance sheet of the
 Company, funds raised on short term basis have, prima facie, not been
 used for long term investment.
 
 xviii Persuant to the rehabilitation scheme sanctioned by the Honble
 BIFR, the Company has made preferential allotment
 
 of shares to parties/companies covered in the register maintained U/S
 301 of the Companies Act, 1956 at a price which is not prejudicial to
 the interest of the Company.
 
 xix The Company has not issued any debentures.
 
 xx Based on information and explanations furnished by the management,
 which have been relied upon by us, there were no frauds on or by the
 Company noticed or reported during the year.
 
 
 
                                        For M. P. Chitale & Co.
                                         Chartered Accountants 
                                             Ashutosh Pednekar
                                                       Partner
                                             ICA1 M. No. 41037
 
 Mumbai
 
 30th June, 2009