Yogi-Sung-Won (India)

1.  We have audited die attached Balance Sheet of Yogi Sung-Won (India)
 Limited as at March 31, 2008 and also the Profit & Loss Account and the
 Cash Flow Statement for the period 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 out 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 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 (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.
 
 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 accounts 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 & 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 & 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 representation received from the
 directors, as on March 3 1, 2008, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2008 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 out information and according to
 the explanation 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 and arc 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, 2008
 
 (b) In the case of the Profit & Loss account, of the Loss for the
 period ended on that date ; and
 
 (c) In the case of Cash Flow Statement, of the Cash Flows for the
 period 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) The Company does not have finished goods, stores, spare parts and
 raw materials.
 
 (c) There was no disposal of fixed assets during the period.
 
 II (a) The Management has conducted physical verification of inventory
 at reasonable intervals during the period.
 
 (b) The procedures of physical verification of inventory 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 and no
 material discrepancies were noticed on physical verification.
 
 III.(a) The Company has not granted any secured or unsecured loans to
 any companies, firm or other parties covered in the register maintained
 under section 301 of the Act.
 
 (b) The Company has not granted any secured or unsecured loans to any
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act, hence the comment on the rate of interest
 and terms and conditions thereon is not required.
 
 (c) The Company has not granted any secured or unsecured loans to any
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act, hence the comment on the receipt of the
 principle and interest thereon is not required.
 
 (d) The Company has not granted any secured or unsecured loans to any
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act, hence the comment on the overdue amount
 is not required.
 
 (e) The Company had not taken any Secured or Unsecured loans from
 companies, firms or other parties, covered in the register maintained
 under section 301 of The Companies Act, 1956.
 
 (f) Company has not taken any Secured or Unsecured loans from the
 parties covered in the register maintained under section 301 of The
 Companies Act, 1956. Hence, the comment on the receipt of principal
 amount and interest thereon is not required.
 
 (g) The company has not taken any secured or unsecured loans from
 companies; firms or other parties covered in the register maintained
 under section 301 of the Companies Act. Hence, the comment on the
 overdue amount is not required.
 
 IV.  In our opinion and according to the information and explanation
 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 and fixed assets and for the
 sale of goods and services. During the course of our audit, no major
 weakness has been noticed in the internal controls in respect of these
 areas.
 
 V.  (a) 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 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 and exceeding the value of rupees five lacs in
 respect of any party during the period have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time
 
 VI.  The Company has not accepted any deposits form the Public.
 
 VII.  In our opinion, the Company has an internal audit system,
 commensurate with the size of the Company and the nature of its
 business.
 
 VIII. The Central Government has not prescribed maintenance of cost
 records by the Company under section 209 (1) (d) of the Act.
 
 IX.  (a) According to the information and explanation given to us and
 records of the Company examined by us, the Company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including provident fund, Investor Education Protection Fund, employees
 state insurance, income tax, sales tax, wealth tax, Service Tax, custom
 duty, Excise duty, Cess and other material statutory dues applicable to
 it.
 
 (b) According to the information and explanation given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax and customs duty, excise duty, cess, Service Tax outstanding, at
 the period end for a period of more than six months from the date they
 became payable.
 
 (c ) According to the information and explanation given to us, there
 are following dues to income tax which have not been deposited on
 account of any dispute. And the same has been disclosed as a contingent
 liability by way of note to the Balance Sheet.
 
 Sr.No   Financial Year     Amount      Remarks
 
 01      1994-1995      54,73,988.00   Appeal pending with ITAT, Abad
 02      1995-1996       8,65,427.00   Appeal pending with ITAT, Abad
 
 According to the information and explanation given to us, there are no
 dues of sales tax, customs duty, wealth tax, Service Tax, excise duty
 and cess which have not been deposited on account of any dispute.
 
 X. The Company has accumulated losses of Rs. 3,39,79,307.34 at the end
 of the financial period and it has incurred cash losses Rs. 3,56,919.58
 in the current and there were no Cash Losses in immediately preceding
 financial year.
 
 XII.  Based on our audit procedures and on the information and
 explanation given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to financial
 institution, bank or debenture holders.
 
 XIII.  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 and advances on the basis of security by way of pledge of
 shares, debentures and other securities.  XIV 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.
 
 XV.  In our opinion and explanation given to us the Company is
 maintaining proper records of the transactions and contracts for
 dealing or trading in shares, securities, debentures and other
 investment. All investments are held in the name of the Company, except
 shares of TECIL Limited and Pieces Aqua Venture Limited, Which are not
 held in the name of the Company.
 
 XVI.  According to the information and explanation given to us, the
 Company has not given any guarantee of loans taken by others from bank
 or financial institutions.
 
 XVII.  Based on information and explanation given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 XVIII.  According to the information and explanations given to us and
 on an overall examination of the Balance Sheet of the Company, we
 report that no funds have been raised on short term basis.
 
 XIX.  According to information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in register maintained under section 301 of the
 Act.
 
 XX.  The Company did not have any debentures during the period.
 
 XXI.  The Company has nor raised any funds by way of Public Issue
 during the period.
 
 XXII.  Based upon the audit procedures performed lor 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 Raju & Prasad
                                               Chartered Accountants
                                                   C A. Avinash Jain
                                                             Partner
                                              Membership No. : 41689
 Place : Mumbai
 Date  : 30-06-2008