Skyline Millars

We have audited the attached Balance Sheet of SKYLINE MILLARS LIMITED
 (Formerly known as MILLARS INDIA LIMITED) as at 31st March, 2009 and
 also the Profit and Loss Account and 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.
 
 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.  As required by the Companies (Auditors 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 and 5 of
 the said order.
 
 Further to our comments referred to above, we state 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 books of accounts as required by law have
 been kept by the Company so far as appears from our examination of the
 books.
 
 c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement referred to in this report are in agreement with the books of
 accounts.
 
 d) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in section 211 (3C) of the Companies
 Act,1956.
 
 e) On the basis of the written representations received from the
 Directors as on 31 March, 2009 and taken on record by the Board of
 Directors, we report that none of the directors are disqualified as on
 31 March, 2009 from being appointed as 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 subject to the Note No.
 8(b) in respect of non provision of interest on overdue sums to SSI
 Undertakings and read together with the other notes in schedule 12 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 the Prof it and
 Loss Account of the PROFIT of the Company for the year ended on that
 date.  iii) In the case of the Cash Flow Statement of the Cash Flows
 for the year ended on that date;
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in Paragraph (3) of our Report of even date)
 
 1 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) As explained to us, most of the assets have been physically verified
 by the Management during the year.  We are informed that no material
 discrepancies have been noticed on such verification.
 
 c) There has been no disposal of substantial part of fixed assets
 during the year.
 
 2 a) The Stock of finished goods, stores, spares and raw materials have
 been physically verified by the
 
 Management at the end of the year or after the close of the year.
 
 b) The procedure of physical verification of stocks followed by the
 Management are reasonable and adequate in relation to the size of the
 Company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of stocks as compared to
 books records were not material and the same have been properly dealt
 with in the books of accounts.
 
 3 a) According to the information and explanation given to us, the
 Company has not granted any loans,
 
 secured or unsecured to Companies, Firms or other parties covered in
 the register maintained under Section 301 of the Companies Act, 1956.
 Therefore the provisions of clause 4 (iii) (a) to (d) of the Companies
 (Auditors Report) Order, 2003 are not applicable for the year under
 report.  b) The Company has not taken any loans secured/unsecured from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956. Therefore, the provisions
 of clause 4 (iii) (e) to (g) of the Companies (Auditors Report) Order,
 2003 are not applicable for the year under report.
 
 4. In our opinion and according to the information and explanations
 given to us, there is an adequate internal control procedure
 commensurate with the size of the Company and the nature of its
 business for the purchase of stores, raw material including components
 and fixed assets and with regard to the sale of goods and services.
 During the course of our audit no major weakness has been noticed in
 the internal control system.
 
 5 a) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 the transactions that need to be entered into the register maintained
 under Section 301 of the Companies Act, 1956 have been so entered.  b)
 In our opinion and having regard to the explanations that in few cases
 of purchase where the items are of a special nature for which no
 comparable quotations are available, transactions made in pursuance of
 contracts or 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 the prevailing
 market prices at the relevant time where such market prices are
 available.
 
 6.  The Company has not accepted any deposits from the Public within
 the meaning of Section 58A and 58AA of the Companies Act, 1956 and the
 rules framed thereunder. To the best of our knowledge and according to
 the information and explanations given to us, no order has been passed
 by the Company Law Board.
 
 7.  The Company has an internal audit system which in our opinion is
 commensurate with the size of the Company and the nature of its
 business.
 
 8.  To the best of our knowledge and according to the information and
 explanations given to us, 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 a) According to the information and explanations given to us, the
 Company is regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 and protection fund, employees state insurance, Income Tax, Sales Tax,
 Service Tax, Wealth Tax, Customs Duty, Excise Duty, cess and other
 material statutory dues applicable to it.
 
 b) According to the information and explanations given to us, no
 undisputed amounts, payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Service tax, Customs Duty, Excise Duty and cess were in arrears as
 at 31st, March, 2009 for a period of more than six months from the date
 they became payable.
 
 c) According to the information and explanations given to us, there are
 no dues of Sales Tax, Income Tax, Excise Duty and Service Tax which
 have not been deposited on account of any dispute.
 
 10. The Company has no accumulated losses at the end of the financial
 year and has not incurred any cash losses in the financial year under
 report or in the immediately preceding financial year.
 
 11. According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to Financial
 Institutions/Banks. The Company has not issued any debentures.
 
 12. According to the information and explanations given to us, the
 Company has not granted any loans and 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 (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, 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 (Auditors Report) Order,
 2003 are not applicable to the Company.
 
 15. According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 16. The Company has not obtained any term loans during the year.
 
 17. According to the information and explanations given to us, and on
 an overall examination of the Balance Sheet of the Company, there are
 no funds raised on short-term basis which have been used for long-term
 investment.
 
 18.  During the year under report, 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.
 
 19. The Company has not issued any debentures during the year.
 
 20. The Company has not raised any money by way of public issue during
 the year.
 
 21. According to the information and explanations given to us, no fraud
 on or by the Company was noticed or reported during the year.
 
                                                    For SHAH & CO.,
                                            Chartered Accountants 
 
 Mumbai, July 27th, 2009                              (H. N. SHAH)
                                                          Partner
                                             Membership No : 8152