1.  We have audited the attached Balance Sheet of M/S. PANKAJ POLYMERS
 LIMITED as at 31st March, 2011 and Profit and Loss Account and also 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 Auditing Standards
 generally accepted in India. Those statements require that we plan and
 perform the audit to obtain reasonable assurance about whether these
 Financial State- ments are free of material mis-statement. 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 statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the statements on Companies (Auditor''s Report) Order
 2003, issued by the Central Government of India in terms of Section 227
 (4A) of the Companies Act, 1956. We enclose in theannexure, 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 where necessary for the purpose of our
 audit.
 
 II) In our opinion, proper books of accounts as required by law have
 been kept by the Company so far as it appears from our examination of
 those books.
 
 III) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of accounts.
 
 IV) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in .Sub-Section (3C) of Section 21 1 of the
 Companies Act, 1956.
 
 v) On the basis of written representations received from the directors
 as on 31st March 2011 and taken on record by the Board of Directors. We
 report that none of the directors is disqualified as on 31st March 2011
 from being appointed as a director in terms of Clause (g) of
 Sub-Section (1) of Section 274 of the Companies Act, 1956.
 
 vi) 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, 2011.
 
 b) In the case of the Profit and 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 of the Company
 for the year ended on that date
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS'' REPORT ON THE
 ACCOUNTS OFM/S. PANKAJ POLYMERS LIMITED
 
 1.  In respect of its fixed Assets :-
 
 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 during the year and no material discrepancies have been
 noticed on such verification. In our opinion, this periodicity of
 physical verification is reasonable having regard to the size of the
 company and the nature of its assets.
 
 c During the year in our opinion, a substantial part of Fixed Assets
 have not been disposed off by the company.
 
 2.  In respect of Inventories :-
 
 a.  As explained to us, the inventories were physically verified by the
 management at reasonable intervals during the year and in our opinion
 and according to the information and explanations given to us, the
 procedure 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.
 
 b.  In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no discrepancies were noticed on such physical
 verification between physical stock and book records.
 
 3.
 
 a.  In our opinion and according to the information and explanations
 given to us the company has taken unsecured loans aggregating Rs.7.65
 Lakhs (maximum balance) from 2 parties listed in the register
 maintained U/s.301 of the Companies Act, 1956.
 
 b.  The Company has granted Unsecured Loan aggregating to Rs.76.65
 lakhs (maximum balance) to 2 parties listed in the register maintained
 U/s. 301 of the Companies Act, 1956.
 
 c.  In our opinion the rate of interest and other terms and conditions
 on loans taken/given from/ to parties listed in the register maintained
 Under Section 301 of the Companies Act, 1956. are not prima-facie
 prejudicial to the Interest of the Company.
 
 d.  There are no overdue amount of loans taken or granted as referred
 to in ''a'' & ''b'' above.
 
 4. In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedure commensurate
 with the size of the Company and nature of the Business with regard to
 Purchase of Inventory, Fixed Assets and with regard to Sale of Goods.
 During the course of our audit we have not observed any continuing
 failure to correct major weaknesses in internal control.
 
 5.
 
 a.  Based on audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that the transactions that need to be entered into the register
 maintained U/s. 301 of Companies Act, 1956 have been so entered.
 
 b.  In our opinion and according to the information and explanation
 given to us, the transaction made in pursuance of contracts or
 arrangements entered into the register in pursuance to Section 301 of
 the act, and exceeding the value of Rupees Five Lakhs in regard of any
 party during the year have been made at prices which are reasonable
 having regard to the market prices prevailing at the relevant time.
 
 6.  In our Opinion and according the information and explanations given
 to us the Company has not accepted any deposits within the meaning of
 Section 58 A and 58 AA of the Companies Act, 1956 and the Companies
 (Acceptance & Deposits) Rules, 1975.
 
 7.  In our opinion the company has an internal audit system
 commensurate with the size of the company and nature of its business.
 
 8.  The Central Government has not prescribed maintenance of cost
 records under Section 209(1 )(d) of the Companies Act, 1956 for any of
 the products of the company.
 
 9.  According to the information and explanations given to us and on
 the basis of our examination of the records of the Company, in respect
 of Statutory and Other Dues.
 
 a) The Company has been regular in Depositing Statutory dues, including
 Provident Fund, Investor Education and Protection Fund, Employees State
 Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise
 Duty, Cess and other Statutory Dues with the appropriate authorities
 during the year.
 
 b) According to the information and explanations given to us no
 undisputed Amounts are payable in respect of Sales Tax, Income Tax,
 Custom Duty, Wealth Tax, Excise Duty and Cess were in arrears as at for
 a period of more than six months from the date they became payable.
 
 c) According to the information and explanations given to us the
 details of disputed Sales tax, Excise Duty, which have not been
 deposited as at 31sl March, 2011 on account of any dispute are as under
 :-
 
 Statute and Nature    Financial year Forum where disputes    Amount Rs.
 of dues
 
 Sales Tax Act :
 
 1) Sales Tax and Interest 2002-2003   Jt. Commissioner Sales 8,43,346/-
                                       Tax (Appeals)
 
 10.  The company does not have any accumulated losses as at the end of
 the financial year and has not incurred cash losses during the Current
 Financial Year and the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explanations,
 given to us the company has not defaulted in repayment or dues to
 Banks.
 
 12.  The company has not granted any loans and advances on the basis of
 security by way of pledge of shares and debentures.
 
 13.  In our opinion and according to the information and explanations
 given to us, the Company is neither a dealer nor a trader in
 securities.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantees for loans taken
 by others from banks and financial institutions.
 
 15.  The Company did not have any Term Loan, outstanding during the
 year, accordingly para 4 (XVI) of the order is not applicable.
 
 16.  According to other records examined by us and the information and
 explanations given to us on an overall basis funds raised on short term
 basis, prima facie has not been used during the year for Long Term
 Investment and Vice Versa.
 
 17.  To the best of our knowledge and belief and according to the
 information and explanations given to us no fraud on or by the company
 was noticed or reported during the year.
 
 18.  Other Clauses of the Order are not applicable to the Company.
 
                                         For LUHARUKA & ASSOCIATES
 
                                            CHARTERED ACCOUNTANTS
 
                                                  F.R. No. 01882S
 
                                                      Sd/- 
                                              (RAMESH CHAND JAIN)
 
 Place: Secunderabad                                 Partner
 
 Date : 20-05-2011                           Membership No. 023019