1) We have audited the attached Balance Sheet of Kalpena Industries
 Ltd. as at 31st March 2012 and the 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 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 the 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 (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) (Amendment) Order 2004
 (together the Order), issued by the Central Government of India in
 terms of sub- section (4A) of section 227 of The Companies Act., 1956
 of India (the ''Act'') 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 give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 4) Further to our comments in the Annexure referred to in paragraph 3
 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 purposes of our
 audit.
 
 b.  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.
 
 c.  The Balance Sheet and Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  In our opinion, Balance Sheet, 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.
 
 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 (I) of section 274 of the Companies Act, 1956.
 
 f.  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;
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2012 and ii.  in the case of the Profit and
 Loss Account, of the Profit for the year ended on that date.  iii.  in
 the case of the Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure refereed to in paragraph 3 of the Auditors Report of even date
 to the members of Kalpena Industries Ltd. on the accounts of for the
 year ended 31st March 2012.
 
 i) a) The company is generally maintaining proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets.
 
 b) As per the information and explanation given to us, fixed assets are
 physically verified by the management during the year, which in our
 opinion, is reasonable having regard to the size of the company and the
 nature of its assets. The discrepancies noticed on such verification
 were not material.
 
 c) There was no substantial disposal of the Fixed Assets.
 
 ii) a) As explained to us, the inventories of the company except stock
 in transit, have been physically verified by the management at
 reasonable intervals.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventories
 followed by the management is 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. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material having regard to the size of
 operation of the company and have been dealt with in the books of
 accounts.
 
 iii) a) According to information and explanations given to us, the
 Company has not granted any loans, secured or unsecured, to companies,
 firms or other parties listed in the Register maintained under Section
 301 of the Act.
 
 b) According to information and explanations given to us, the Company
 has not taken any loans, secured or unsecured, from companies, firms or
 other parties listed in the Register maintained under Section 301 of
 the Act.
 
 iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanation that some of the products
 of the company are of special nature and suitable alternative sources
 are not readily available for obtaining comparable quotations, there is
 generally an adequate internal control system commensurate with the
 size of the company and the nature of its business with regard to
 purchase of inventory and fixed assets and the sale of goods and
 services. Read with the above, during the course of our audit, we have
 not observed any major weakness or continuing failure to correct any
 major weakness in the internal control system of the company in respect
 of these areas.
 
 v) In our opinion and according to the information and explanations
 provided by the management, we are of the opinion that there are no
 contracts or arrangements that need to be entered into the register
 maintained under section 301 of the Companies Act, 1956.
 
 vi) The Company has not accepted any deposit from public in terms of
 section 58A and 58AA and the relevant provisions of the Companies Act,
 1956.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii) We have broadly reviewed the books of accounts maintained by the
 company in respect of product, where pursuant to the rules need by the
 central government of India, the maintenance of cost records has been
 prescribed under clause (d) of subsection (1) of sec 209 of the Act and
 are of the opinion that prima facie, the prescribed accounts and
 records have being made and maintained. We have not, however, made a
 detail examination of the record with a view to determine wheter they
 are accurate or complete.
 
 ix) 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 the 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
 as applicable, with the appropriate authorities. As at 31st March''
 2012, there were no arrears in respect of the aforesaid dues for a
 period of more than six months from the date they became payable.
 
 b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax, wealth tax, service tax, customs duty, excise
 duty and cess as applicable as at 31st March'' 2012, which have not been
 deposited on account of a dispute are as follows -
 
 Name of Statue     Nature of Dues   Amount   Period of
                                              which       Forum where
                                     (Rs. In
                                   Thousands) the amount
                                              relates     dispute is
                                                          pending
 
 Excise Act         Excise Duty     2,935    F.Y. 1996-97   CEGAT
 
 Value Added Tax    Value Added
                    Tax            44,705    F.Y. 2004-05 Jt. Comm. of
                                    6,093    F.Y. 2005-06  Sales Tax,
                                   34,441    F.Y. 2006-07 Beliaghata,
                                                          Kolkata
 
 Central Sales Tax  Central Sales 
                     Tax            6,912    F.Y. 2004-05 Jt. Comm. of
                                   21,757    F.Y. 2005-06  Sales Tax,
                                   10,110    F.Y. 2006-07 Beliaghata, 
                                                          Kolkata
 
 x) There are no accumulated losses of the company. The company has not
 incurred cash losses during the financial year covered by our audit and
 the immediately preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to a
 financial institution and banks as at the Balance Sheet date.
 
 xii) 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) 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, is not dealing in or trading in
 shares, securities, debentures and other investments.
 
 xv) In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loan taken by
 others from bank or financial institution during the year.
 
 xvi) According to the information & explanation given to us, the Term
 Loan are being applied by the company for the purpose for which the
 loan were obtained.
 
 xvii) According to the information and explanations given to us, on an
 overall examination of the balance sheet of the company, we report that
 the no funds raised on short-term basis have been used for long-term
 investment.
 
 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 Act during the year.
 
 xix) There are no debentures issued and outstanding at the year end.
 
 xx) The Company has not raised any money by public issue during the
 year.
 
 xxi) According to the information and explanations given to us and
 representations made by management and based upon the audit procedures
 performed, we report that no fraud on or by the company has been
 noticed or reported during the course of our audit.
 
                                          For D.C. DHAREWA & CO.
 
                                  Firm Registration No. 322617E
 
                                          CHARTERED ACCOUNTANTS,
 
                                                  (D.C. DHAREWA)
 
                                                     PROPRIETOR.
 Date : 24th August, 2012                 (MEMBERSHIP NO. 53838)