We have audited the attached Balance Sheet of METAL BOX INDIA LIMITED
 as at 30th June, 2010 the related Profit and Loss Account (annexed
 thereto) of the Company for the period of fifteen months ended on that
 date (hereinafter referred to as a year) and the Cash Flow Statement
 for the year ended on that date. 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.
 
 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 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 presentation of the
 Financial Statements. We believe that our audit provides a reasonable
 basis for our opinion.
 
 1.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors 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 and based on appropriate
 tests of available books and records and the information and
 explanations (including representations) given to us by the management
 during the course of the audit, we annex hereto a statement on the
 matters specified in paragraphs 4 and 5 of the said Order, to the
 extent they are applicable to the Company.
 
 2.  The Company has prepared the accounts as a going concern. Its net
 worth is negative, but as covered in Note 2 (Schedule 17), the same is
 projected to turn positive as a part of implementation of the updated
 sanctioned scheme.
 
 3.  We have obtained other information and explanations which to the
 best of our knowledge and belief were necessary for our audit and
 proper books of account as required by Law have been kept by the
 Company, so far as appears from our examination of these books.
 
 4.  The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 5.  In our opinion, the Balance Sheet, Profit and Loss Account, and
 Cash Flow Statement comply with the Accounting Standards (AS) referred
 to in sub-section (3C) of Section 211 of the Companies Act, 1956.
 
 6.  On the basis of information furnished to us by the Company, none of
 the directors of the Company is disqualified from being appointed as a
 director under clause (g) of sub section (1) of Section 274 of the
 Companies Act, 1956.
 
 7.  Without qualifying our opinion, attention is invited to: (i) Note
 below Schedule 8 of secured loans. As explained therein the aggregate
 book value of relevant assets against which secured loans have been
 obtained are lower than the loans outstanding, and (ii) Note 15
 (Schedule 17) with regard to confirmation of balances of secured loans
 and certain loans and advances.
 
 8.  The said accounts give the information required by the Companies
 Act, 1956 in the manner so required except that as mentioned in Note 16
 (Schedule 17), the details in respect of amounts due to Micro, Small
 and Medium Enterprises Creditors have not been ascertained.
 
 9.  In our opinion, the said accounts give a true and fair view in
 conformity with the accounting principles generally accepted in India;
 
 a.  in so far it relates to the Balance Sheet, of the state of affairs
 of the Company as at 30th June, 2010, and
 
 b.  in so far it relates to the Profit and Loss Account, of the profit
 for the year ended on that date.
 
 c.  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 1 OF THE REPORT OF EVEN DATE OF THE
 AUDITORS TO THE MEMBERS OF METAL BOX INDIA LIMITED ON THE ACCOUNTS FOR
 THE YEAR ENDED 30th JUNE, 2010.
 
 1.  In view of our observation in paragraph 1 of our above referred
 Report, it has been possible for us to express an opinion on the
 reporting requirements specified in paragraphs 4 and 5 of the Companies
 (Auditors Report) Order, 2003 as amended by the Companies (Auditors
 Report) (Amendment) Order, 2004 as set out in paragraphs below. The
 observations are based upon the available books of account and records
 of the Company.
 
 2.  The Company is in the process of updating records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 3.  All the fixed assets have been verified by the management during
 the year. However, the Company is in the process of reconciling the
 books records with the physical inventory.
 
 4.  During the year, the Company has not disposed off a major part of
 the fixed assets.
 
 5.  The stocks of finished goods and raw materials lying at the running
 unit at Mangalore have been physically verified by the management at
 the year- end.
 
 6.  The procedures of aforesaid physical verification of stocks as
 followed by the management are generally considered reasonable and
 adequate in relation to the size of the related unit and nature of the
 business.
 
 7.  The discrepancies between the physical stocks and the book stocks
 at the aforesaid unit, which have been dealt with in the books of
 account, were not material. The Company at its aforesaid unit has
 maintained records of stocks.
 
 8.  The Company has not obtained any loans, secured or unsecured, from
 Companies, firms or other parties listed in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 9.  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 Companies Act, 1956.
 
 10.  The existing internal control system for the purchases of stores,
 raw materials including components and Fixed Assets and for sales of
 goods and land and buildings - developments rights are adequate and
 commensurate with the size and condition of the Company and the nature
 of its business.
 
 11.  Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that the Company has not entered into any transactions that
 need to be entered in the register maintained under section 301 of the
 Companies Act, 1956.
 
 12.  In the case of public deposits received by the Company in earlier
 years, the Company has offered option for graded upfront settlement and
 approximately half of the fixed deposits holders have availed of the
 said offer. With respect of the balance, the directives issued by the
 Reserve Bank of India and the provisions of Section 58A and Section
 58AA of the Companies Act, 1956 and the rules framed under the
 Companies (Acceptance of Deposits) Rules, 1975 have not been complied
 with. It is informed to us that no order has been passed by the Company
 Law Board in respect of this.
 
 13.  The Companys internal audit system, in our opinion, is
 commensurate with its size and nature of business.
 
 14.  The Central Government has not prescribed maintenance of cost
 records by the Company under Section 209(1 )(d) of the Companies Act,
 1956, for any of its product.
 
 15.  The Company is generally regular in depositing provident fund,
 employees state insurance, income tax, excise duty and other statutory
 dues with the appropriate authorities. However, there have been some
 delays in depositing sales tax, municipal tax and profession tax. The
 arrears of such dues over six months on balance sheet date aggregate to
 Rs. 1353.18 lakhs.
 
 16.  According to the information and explanations given to us, the
 quantum and other relevant details of disputed dues in respect of
 custom duty, sales tax, excise duty, municipal tax and profession tax
 which have not been deposited are currently not ascertainable.
 
 17.  In our opinion, the accumulated losses of the Company are more
 than fifty percent of its net worth. The Company has incurred cash
 losses during the financial year covered by our audit but not in the
 immediately preceding financial year.
 
 18.  The Company, in terms of the sanctioned rehabilitation Scheme
 (refer Note 2 (Schedule 17)) is making repayment of dues in
 installments to financial institutions, debenture holders and banks as
 a part of implementation of the Scheme, the secured creditors having
 accepted settlements which are different from the original terms of
 contract with such parties.
 
 19.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 20.  In our opinion, the Company is not a chit fund or a nidhi mutual
 benefit fund/society. Therefore, the provision of clause 4(xiii) of the
 Companies (Auditors Report) Order, 2003 and Companies (Auditors
 Report) Amendment Order, 2004 are not applicable to the Company.
 
 21.  The Company has not dealt or traded in shares, securities,
 debentures and other investments during the year.
 
 22.  The Company has not given any guarantee for loans taken by others
 from the Bank or Financial Institutions.
 
 23.  In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 24.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that the Company has not used funds raised on short-term basis for
 long-term investment.
 
 25.  The Company has not made preferential allotment of shares to the
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956 during the year.
 
 26.  The Company has not issued any Debentures during the year.
 
 27.  The Company has not raised any money by public issue during the
 year.
 
 28.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no. fraud on the
 Company or by the Company has been noticed or reported during the
 course of our audit.
 
                                              For Haribhakti & Co.,
 
                                              Chartered Accountants
 
                                      Firm Registration No. 103523W
 
 New Delhi                                             Chetan Desai
 
 Date-. 20th November 2010                                  Partner
 
                                               Membership No- 17000