Nippo Batteries Company

1.  We have audited the attached Balance Sheet of M/s.  Nippo Batteries
 Co. Ltd., as at 31st March, 2009 and the Profit and Loss Account and
 also the Cash Flow statement of the Company for the year ended on that
 date annexed thereto. 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 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 (Auditors Report) Order, 2003 issued
 by the Department of Company Affairs in terms of Section 227 (4A) 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 to the extent
 applicable to the Company.
 
 4.  Further to our comments in the Annexure referred to in the
 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, the Profit and Loss account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 d.  In our opinion, the Balance Sheet and Profit and Loss account and
 Cash Flow Statement dealt with by this report comply with Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956, as they apply to the Company.
 
 e.  On the basis of written representations received from the directors
 as at 31st March, 2009 and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March,
 2009 from being appointed as a director in terms of clause (g) of
 sub-section (1) 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, 2009;
 
 ii) in the case of Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 iii) in the case of the Cash Flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure 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) These fixed assets have been physically verified by the management
 at the end of the financial year which in our opinion is reasonable
 having regard to the size of the Company and the nature of its assets.
 According to the information and explanations given to us, no material
 discrepancies were noticed on such verification.
 
 c) As per the records and as explained to us, the Company has not
 disposed off any substantial or major part of fixed assets during the
 year.
 
 ii) a) As explained to us, inventories held by the Company were
 physically verified during the year at reasonable intervals by the
 management.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable 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, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 iii) (a) The company has not granted any loans, secured or unsecured to
 companies; firms or other parties covered in the register maintained
 u/s 301 of the Companies Act, 1956.
 
 (b) The company has not taken any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 u/s.301 of the Companies Act, 1956.
 
 iv) a) In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system
 commensurate with the size of the Company and nature of its business
 with regard to the purchases of inventories, fixed assets and for the
 sale of goods and services.
 
 b) In our opinion and according to the information and explanations
 given to us, there is no continuing failure to correct major weaknesses
 in internal control system of the Company.
 
 v) a) In our opinion, on the basis of the audit procedures applied by
 us and according to the information and explanation given to us, the
 particulars of contracts or arrangements referred to in Section 301 of
 the Act have been entered in the register required to be maintained
 under that section.
 
 b) In our opinion, on the basis of the audit procedures applied by us
 and according to the information and explanations given to us, the
 transactions made in pursuance of contracts or arrangements entered in
 the register maintained under section 301 of the Companies Act, 1956,
 have been made at prices which are reasonable having regard to
 prevailing market prices for such goods, materials or services at the
 relevant time.
 
 vi) The Company has not accepted any deposits from the public during
 the year to which the directives issued by the Reserve Bank of India
 and the provisions of sections 58A and 58AA and any other relevant
 provision of the Act and the rules framed there under are applicable.
 
 vii) In our opinion, the company has an internal audit system
 commensurate with its size and the nature of its business.
 
 viii) According to the records produced and the information given to
 us, the cost records prescribed by the Central Government under
 Sec.209(1)(d) of the Companies Act 1956 (1 of 1956) are being made and
 maintained by the Company. No examination of such records has been
 carried out by us.
 
 ix) (a) According to the records of the Company, the Company is regular
 in depositing undisputed statutory dues including Provident Fund,
 Investor Education and Protection Fund, Employees State Insurance,
 Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise
 Duty, Cess and any other statutory dues applicable to it, with the
 appropriate authorities during the year.
 
 (b) According to the records of the company, there are no dues of
 income tax, wealth tax, customs duty service tax, excise duty and cess
 which have not been deposited on account of any dispute except:
 
 i) disputed Madhya Pradesh Sales Tax of Rs.2.15 lacs pending before the
 First Sales Tax Appellate Authority and
 
 ii) disputed Income Tax is as under:- Rs. In Lakhs (i) Disputed before
 the First Appellate Authority 22.80
 
 (ii) Disputed before the Second Appellate Authority 7.11  29.91
 
 x) As at the end of the financial year, the Company does not have
 accumulated losses. It has not incurred cash losses during the
 financial year or in the immediately proceeding financial year.
 
 xi) On the basis of records and as explained to us, working capital
 facilities have been availed by the company as per the limits
 sanctioned by the bankers. The Company has not availed borrowing
 facilities from financial institutions and debenture holders.
 
 xii) As per the records maintained by the Company, no loans or advances
 have been granted by the Company on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 xiii) The clause regarding special statutes is not applicable to the
 Company.
 
 xiv) As per the records maintained, the Company does not deal or trade
 in shares, securities, debentures and other investments.
 
 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 during the year.
   
 xvi) The company has not raised any term loans during the year. 
  
 xvii) As per records maintained and information given to us, the
 Company has not raised funds either on short term or long term basis
 during the year.
   
 xviii)The company has not made any preferential allotment of shares
 during the year.
 
 xix) The company has not issued any debentures during the year.  
 
 xx) The company has not raised any money by public issues during the
 year.
   
 xxi) On the basis of the audit procedures carried out by us and
 information and explanation given by the management, we state that no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                            For P. SRINIVASAN & CO.  
                                             Chartered Accountants
                                              (R SRINIVASAN) 
 Place: Chennai                                     Partner
 Date: 29th May, 2009                        Membership No:2090