1.  We have audited the attached Balance sheet of M/s. Kumar Wire Cloth
 Manufacturing Company Limited as at 31st March'' 2012'' the Profit & Loss
 Account & 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 materials misstatements. An audit
 includes examining on a test basis'' evidence supporting the amounts and
 disclosure in the financial statements. 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'' issued
 by the Central Government of India in terms of sub-section (4 a) of
 section 227 of the Companies Act'' 1956'' and on the basis of the books
 and records of the company as we considered appropriate and according
 to the information and explanations given to us'' we enclose in the
 Annexure a statement on the matters specified in paragraph 4 and 5 of
 the said Order.
 
 4.  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) In our opinion'' proper took 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 the Profit & Loss Account dealt by this
 report are in agreement with the books of account;
 
 (d) In our opinion'' the Balance Sheet and Profit & Loss Account dealt
 by this report comply with the accounting standards referred to in
 sub-section (30 of section 211 of the Companies Act'' 1956;
 
 (e) On the basis of written representations received from the
 directors'' as on 31 * March'' 2012 and taken on record by the Board of
 Directors'' we report that none of the Directors is disqualified as on
 31  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;
 
 if) In our opinion'' and to the best of our information and according to
 the explanations given to us'' the said accounts read together with
 Significant Accounting Policies and Notes 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   Sheet'' of the stale of affairs of the
 company as at 31  March 2012
 
 ii.  In case of the Profit &  Loss Account'' of the Profit for the
 year ended on that date and
 
 iii. tn the case of cash flow statement of the cash flow for the year
 ended on that date
 
 ANNEXURE REFERRED TO IN THE PARAGRAPH 3 OF THE AUDITOR''S REPORT OF EVEN
 DATE TO
 
 MEMBERS OF M/S. KUMAR WIRE CLOTH MANUFACTURING COMPANY LIMITED ON THE
 FINANCIAL
 
 STATEMENTS FOR THE YEAR ENDED 31st MARCH'' 2012.
 
 I.  In respect of Fixed Assets :
 
 (a) The company has maintained proper records showing full particulars''
 including quantitative details and situation af fixed assets i
 
 (fes) Tte management at reasonable intervals has physically verified
 all the fixed assets but no material discrepancies were noticed.
 
 (c) No substantial parts of fixed assets have been disposed off during
 the year. The going concern concept is not affected.
 
 II.  In respect of inventory
 
 (a) According to the information and explanations given to us the
 inventories have been physically verified by the management at
 reasonable intervals.
 
 (b) According to the information and explanations given to us the
 procedure for physical verification of inventory followed by the
 management are reasonable and adequate in relation to the size of the
 Company and its nature of business.
 
 (c) The company is maintaining proper records of inventory and as
 explained to us there were no material discrepancies'' noticed on
 physical verification of inventory as compared to the book records.
 
 III. In respect of Loans:
 
 (a) The company has not granted any loan to the company or any other
 person'' covered in the register maintained under section 301 of the
 Act'' 1956
 
 (b) Since no Loan is given'' hence the question of interest'' repayment
 and other terms does not arise.
 
 (c) The Company has not taken any loan whether secured or unsecured
 during the year from companies'' firm or other parties covered in the
 register maintained 301 of the Companies Act'' 1956. Hence this clause
 in not applicable.
 
 (d) Since no Loan is given'' hence the question of interest'' repayment
 and other terms does not arise.
 
 IV.  The Company has an adequate internal control procedure
 commensurate with the size and nature of business of the company with
 regard to purchase of materials'' fixed assets and for the sale of goods
 and services.
 
 V.  (a) According to information and explanations given to us'' we are
 of the opinion that contracts and arrangements need to be entered into
 register in pursuance ui section 301. of the Act'' have been : o
 entered;  
 
 (b) in our opinion and according io ibr_- information and explanation
 given to us'' the transaction made ii - pursuance of contracts or
 arrangements of any in the registered maintained under section 301 of
 tht Companies Act'' 1956 and cvceding the value of five lakhs rupees in
 respect of any party during the year have been made af prices which arc
 reasonable having regard to prevaiiing market prices at the relevant
 time.
 
 VI.  The company has not accepted deposits contemplated under Sec.58A
 of the Companies Act'' 1956 from the public.
 
 VII. The company does not have any formal internal audit system''
 however the control procedure instituted by the management ensure
 reasonable internal checking of ‘*5 f’naricial transactions.
 
 VIII.  We have been informed that the maintenance of cost records has
 not been prescribed by the Central Govt'' under Clause (d) of the
 Sub-sec. 209 of the Companies Act'' 1956.
 
 IX.  In respect of statutory dues :
 
 (a) According to information and explanations given to us the Company
 is generally regular in depositing undisputed statutory dues as per the
 scheme defined by BIFR including Provident Fund'' Investor education and
 Protection Fund Employees State Insurance Income Tax'' Wealth Tax'' Sales
 Tax'' Service Tax'' Custom Duty'' Excise duty'' Cess with the appropriate
 authorities. However as per the Draft Rehabiliation scheme sanctioned
 by BIFR vide its order dated February 25'' 2010'' following are the
 undisputed statutory dues :
 
 (b) Particulars           Amount (Rs.)
 
 Sales Tax                  3564335/-
 
 Interest on Sales Tax      5906618/-
 
 CST                         120480/-
 
 Income Tax                 1586988/-
 
 Interest on Income Tax     5619173/- .
 
 (c) According to the information and explanations given to us'' there
 are no disputed dues in respect of Custom Duty'' Sales Tax'' Excise duty''
 Wealth Tax. The details of dues in relation to Incomei Tax'' which have
 not been deposited as on 31a March 2012 on account of dispute is given
 below:
 
 Statute   Nature of 
           Dues           Forum where   Period to
                                        which the    Amount Involved
                          dispute is 
                          pending       amount
                                        relates
 
 Income 
 Tax       Assessment 
           dues           Commissioner 
                          of            Income Tax  
                                       (Appeal)         39''782/-
                                        A.Y. 2009-10
 
 X.  The Company has not incurred cash loss in the financial year but
 incurred cash loss fn the previous financial year.
 
 XI.  According to the information and explanations given to us'' during
 the year the company has not defaulted in repayment of dues to the
 banks or financial institutions.
 
 XII. The Company has not granted loans and advances on the basis of
 security by way of pledge of shares'' debentures and other securities.
 
 XIII.  In our opinion the Company is not a chit fund or a nidhi/mutual
 benefit fund/ society. Therefore the provisions of clause 4 (xiii) of
 the Companies (Auditor''s Report) Order 2003 are not applicable to the
 Company.
 
 XIV. The company is not dealing trading in shares'' securities''
 debentures and other investments. Therefore the provisions of clause 4
 (xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable
 to the Company.
 
 XV.  In our opinion and according to the information and explanations
 given to us'' the company has not takin any term loan during the year.
 
 XVI. The Company has given the guarantee of'' 30 Lakhs for loan taken by
 Vishal Chairs Limited.
 
 XVII.  According to information and explanations given to us and on an
 overall examination of the balance sheet of the Company the funds
 raised on short term basis'' prima facie have not been used for long
 term investments.
 
 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 Act. However the company has received Rs. 150 Lacs as share
 application as per the direction of BIRF. The allotment in respect of
 said share application money is  pending.
 
 XIX. The Company has not issued any debentures.
 
 XX.  The Company has not raised any money through by way of public
 issue during the year.
 
 XXI. As informed to us the fraud on or by the Company has not been
 noticed or reported during the year.
 
                                         For AMAR BAFNA & ASSOCIATES
 
                                         Chartered Accountants
 
                                         FRN:- 114854W
 
                                        (Amar Bafna)
 
                                         Pranter
 
                                         M No. 048639
 
 Place: Mumbai
 
 Date: May 30'' 2012