1.  We have audited the attached Balance Sheet of Indo Count Industries
 Limited as at 31st March, 2012 and the Profit & Loss Account for the
 year ended on that date annexed thereto and the cash flow statement for
 the year ended on that date. 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 accounts
 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 (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, 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 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 purpose of our
 audit.
 
 ii) In our opinion, proper bocks 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, the Profit & Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 iv) In our opinion, subject to our observation in para v) below the
 Balance Sheet, the Profit & Loss Account and the Cash Flow Statement
 comply with the accounting standards referred to in sub- section (3C)
 of section 211 of the Companies Act, 1956.
 
 v) Attention is drawn to Note No.29(a) to the accounts regarding the
 non provision of MTM loss in the financial statements as AS 30 is not
 mandatory.
 
 vi) On the basis of written representations received from the directors
 and taken on record by the board of directors, we report that as on
 31st March, 2012 none of the directors is disqualified from being
 appointed as a director in terms of clause (g) of sub section (1) of
 section 274 of the Companies Act, 1956.
 
 Subject to the 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:
 
 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 & Loss Account, of the profit for the
 year ended on that date; and
 
 c.  in the case of cash flow statement of the cash flows for the year
 ended on that date.
 
 Referred to in paragraph 3 of our report of even date
 
 (i) (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the fixed assets have been physically verified by the
 management according to a regular program, which, in our opinion, is
 reasonable having regard to the size of the company and the nature of
 its assets. No material discrepancies with respect to book records were
 noticed on such verification.
 
 (c) During the year, the company has not disposed off any substantial
 part of its fixed assets. Therefore, it has not affected the going
 concern concept of the company.
 
 (ii) (a) Physical verification of inventory (except material in
 transit) has been conducted by the management at reasonable intervals.
 In our opinion, the frequency of verification is reasonable.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the company and nature of its business.
 
 (c) The company is maintaining proper records of inventory.
 Discrepancies noticed on verification of inventory as compared to book
 records were not material.
 
 (iii) The company has neither granted nor taken loans, secured or
 unsecured to / from companies firms or other parties covered in the
 register maintained under section 301 of the Act and as such clauses
 (iii) (b), (iii) (c) and (iii) (d) of the Order are not applicable to
 the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business for the purchase of inventory and fixed assets and for sale of
 goods and services. During the course of our audit, no major weakness
 has been noticed in the internal control system.
 
 (v) Transactions that need to be entered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (a) Based upon the audit procedures applied by us and according to the
 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 Companies Act, 1956, have been entered in the register required
 to be maintained under the 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 entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 5.00 lac in
 respect of any party during the year, have been made at prices which
 are reasonable, having regard to prevailing market prices at the
 relevant time.
 
 (vi) According to the information and explanation given to us, the
 Company has not accepted any deposit from the public. Therefore, the
 provisions of clause 4 (vi) of the Order are not applicable to the
 Company.
 
 (vii) In our opinion, the company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 company pursuant to the order made by the Central Government for the
 maintenance of cost records under section 209(1) (d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.  However, we have
 not made a detailed examination of such accounts and records.
 
 (ix) (a) The company is generally regular in depositing with the
 appropriate authorities undisputed statutory dues including provident
 fund, investor education and protection fund, employees state
 insurance, income tax, wealth tax, sales tax, service tax, custom duty,
 excise duty, cess and other statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, service tax, customs duty, excise duty and cess were outstanding
 as at 31st March,2012 for a period of more than six months from the
 date they became payable.
 
 (x) The accumulated losses of the company as at 31st March, 2012 do not
 exceed fifty percent of its net worth at the end of the said financial
 year. The company has not incurred cash losses during the financial
 year.
 
 (xi) The company has defaulted in repayment of dues to banks as under-
 
 Nature of Loan                        Delay in          Amount
                                       number of days   (Rs. in Lac)
 
 1. Late Payments:
 
 Rupee Term loans
 
 -Principal                                 0-30 days       631.09  
 
 Working Capital Term loans
 
 -Principal                                 0-30 days        45.90 
 
 Demand term Loan
 
 -Principal                                60-90 days        55.92 
 
 2.Non Payments:
 
 Demand Term Loan
 
 -Principal                                 0-30 days        98.18 
 
                                           61-90 days        42.26
 
 -Interest                                  0-30 days        26.73
 
                                           31-60 days        25.42
 
                                           61-90 days        26.23
 
                                          91-120 days        10.95
 
 
 (xii) According to the information and explanations given to us, the
 company has not granted any loan and advance on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the company is neither a chit fund nor nidhi /
 mutual benefit fund / society and hence clause 4 (xiii) of the Order is
 not applicable to the company.
 
 (xiv) In our opinion, the company is not dealing in or trading in
 shares, securities, debentures and other investments and accordingly,
 the provisions of clause 4 (xiv) of the Order is not applicable to the
 company.
 
 (xv) In our opinion, the company has not given guarantee for loans
 taken by others from banks or financial institutions.
 
 (xvi) In our opinion, the term loans have been applied for the purposes
 for which they were obtained.
 
 (xvii) According to the information and explanation given to us and on
 overall examination of the Balance Sheet of the company, we are of the
 opinion that the company has utilized Rs. 1,727.12 lac during the year
 raised on short term basis for long term purposes.
 
 (xviii) During the year the company has made a preferential allotment
 of shares to parties and companies covered in the register maintained
 under section 301 of the Act.
 
 (xix) According to the information and explanations given to us, the
 company has not issued debentures during the year.
 
 (xx) According to the information and explanations given to us, during
 the year the company has not raised any money by public issue.
 
 (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 B. K. Shroff & Co.,
 
                                             Chartered Accountants
 
                                                  Reg. No. 302166E
 
                                                       O. P. Shroff
 
 Place : Mumbai                                             Partner
 
 Date  : 25th May, 2012                         Membership No. 6329