1.  We have audited the attached Balance Sheet as at March 31, 2011 and
 also 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 auditing standards
 generally accepted in India. These standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements 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 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 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 & 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 were necessary for the purpose of our
 audit.
 
 II.  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.
 
 III.  The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 IV.  In our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956.
 
 V.  On the basis of the written representations received from the
 Directors, as on March 31, 2011 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 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 read together with the
 significant accounting policies in schedule Q and notes appearing
 thereon 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 March 31, 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 for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 1.  The Company has maintained proper records showing full particulars,
 including quantitative details at factory level. Consolidation of the
 Assets including quantity & value is under progress at the Corporate
 Office. In accordance with the phased programme for verification of
 fixed assets, certain items of fixed assets were physically verified by
 the management during the year and no material discrepancies were
 noticed on such verification.
 
 2.  The inventory of the Company has been physically verified by the
 management during the year. In our opinion, the frequency of
 verification is reasonable. In our opinion and according to the
 information and explanations given to us, the procedures of physical
 verification of inventory followed by the management were found
 reasonable and adequate in relation to the size of the Company and the
 nature of its business. On the basis of our examination of records of
 inventory, in our opinion, the Company has maintained proper records of
 inventory and the discrepancies noticed on physical verification
 between the physical stocks and the book records were not material in
 relation to the operations of the Company.
 
 3.  According to information and explanation given to us the company
 has not granted any loans secured or unsecured to Companies, Firms or
 other parties which are of the nature required to be covered under
 Section 301 of the Companies Act, 1956. However the company has given
 Rs. 813.60 lacs as interest free advance to wholly owned subsidiary
 during the year, which is repayable on demand.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory, Fixed Assets and for the sale
 of goods.  Further, on the basis of our examination and according to
 the information and explanations given to us, we have neither come
 across nor have we been informed of any instance of major weaknesses in
 the aforesaid internal control procedures.
 
 5.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts of
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 6.  The Company has not accepted any deposits from the public.
 
 7.  In our opinion, the Company has an internal audit system,
 commensurate with the size of the Company and the nature of its
 business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government, the maintenance of cost records has been prescribed
 under Section 209 (1)(d) of the Companies Act, 1956. We are of the
 opinion that prima facie the prescribed accounts and records have been
 maintained. We have not, however made a detailed examination of the
 records with a view to determining whether they are accurate or
 complete.
 
 9.  According to the records of the Company, the Company is regular in
 depositing undisputed statutory dues including With-holding of Taxes,
 Provident Fund, Employees State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other
 statutory dues applicable to it with the appropriate authorities.
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Customs Duty, Service Tax, Excise Duty and Cess were outstanding,
 at the year end for a period of more than six months from the date they
 became payable.
 
 As on March 31, 2011 according to the records of the Company the
 following are the particulars of disputed dues on account of Excise
 duty, Customs, Income Tax, Service Tax and Sales Tax that have not been
 deposited.
 
 Sr.   Nature of       Amount        Period to    Forum where
 No.    Dues           Under         Which the    the dispute is
                       Dispute       Amount       pending
                   (Rs. in Lacs)     Relates
 
 1.  Central             25         2004-05-06     Tribunal,
     Excise                                        Ahmedabad
 
 2.  - do -            3752            2006        Remanded back
                                                   by Tribunal,
                                                   Ahmedabad and
                                                   pending with
                                                   Central Excise
                                                   Commissioner,
                                                   Rajkot
 
 3.  - do -            1467            2008        Tribunal,
                                                   Ahmedabad
 
 4.  - do -            1452            2008        Commissioner,
                                                   Rajkot
 
 5.  - do -               8            2010        Commissioner
                                                   (Appeals),
                                                   Pondicherry
 
 6.  - do -              34            2010        Addl.
                                                   Commissioner
                                                   Central Excise,
                                                   Rajkot
 
 7.  - do -               9            2010        Commissioner
                                                   Appeals, Vizag
 
 8.  - do -               3            2011        Commissioner
                                                   Central Excise,
                                                   Vizag
 
 9.  Customs              9            2010        Dy.
                                                   Commissioner
                                                   of Customs,
                                                   Kandla
 
 10. - do -               4            2010        Dy.
                                                   Commissioner
                                                   of Customs,
                                                   Kandla
 
 11. Service Tax         45            2008        Tribunal,
                                                   Chennai
 
 12. - do -              10            2009        Jt.Commisioner
                                                   Central Excise
                                                   Puducherry
 
 13. - do -             209            2009        Commissioner
                                                   Central Excise
                                                   Puducherry
 
 14. - do -               2            2009        Commissioner
                                                   Appeals, Vizag
 
 15. - do -              15            2009        Commissioner
                                                   Appeals, Vizag
 
 16. - do -               2            2010        Asst.
                                                   Commissioner
                                                   Service Tax,
                                                   Rajkot
 
 17. - do -             155            2010        Commissioner,
                                                   Rajkot
 
 18. - do -              49            2010        Addl.
                                                   Commssioner
                                                   Central Excise,
                                                   Service Tax
                                                   Commissioner,
                                                   Rajkot
 
 19. Sales Tax           43         2000-01        Pending in AP
                                                   High Court
 
 20.  - do -             14       1999-2000        Tribunal,
                                                   Ahmedabad
 
 21.  - do -           1200      2003-04-05        AP High Court
 
 22.  Income Tax        700      2005- 2006        Commissioner
                                                   of Income Tax
                                                   (Appeal ) &
                                                   ITAT
 
 23.  Income Tax      74.91       2008-2009        Commissioner
                                                   of Income Tax
                                                   (Appeal)
 
 10.  The Company has no accumulated losses at the end of the Financial
 Year and it has not incurred any cash losses in the current and
 immediately preceding Financial Year.
 
 Based on our audit procedures and on the information and explanations
 given by the management, we are of the opinion that the Company has not
 defaulted in repayment of dues to financial institution and Banks.
 
 11.  The Company does not have any outstanding Debentures.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans or advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 13.  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.
 
 14.  In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 15.  In our opinion and explanation given to us the Company has given
 Guarantees for loan taken by its subsidiaries from Banks/Financial
 Institutions.
 
 16.  Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet and Cash flow statement of
 the Company, we report that no funds raised on short-term basis have
 been used for long-term investment and no long-term funds have been
 used to finance short-term assets (excludes Long Term working capital).
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the Register maintained under Section
 301 of the Companies Act, 1956 during the year.
 
 19.  The Company has not raised any money by way of issue of
 Debentures.
 
 20.  The Company has not raised any money during the year by way of
 Share Capital.
 
 21.  Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
                                                   For & on behalf of
 
                                           Suresh C. Mathur & Company
 
                                                Chartered Accountants
 
                                                                 Sd/-
 
                                                     SURESH C. MATHUR
 
 Place: Mumbai                                                Partner
 
 Date : 24th June, 2011                            Membership No.1276