Haldyn Glass Ltd.

1. We have audited the attached Balance Sheet of Haldyn Glass Gujarat 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. 2. We conducted our audit in accordance with the 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 Companies [Auditors Report] Order, 2003 as amended by Companies [Auditors Report] [Amendment] Order, 2004 [together the Order], issued by the Central Government of India in terms of sub-section [4A] of section 227 of the Companies Act, 1956 we give 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 in 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 purpose of our audit. [b] In our opinion, proper books of account, as required by law have been kept by the Company so far as it appears from our examination of such books. [c] The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. [d] 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. [e] On the basis of the written representations received from the Directors 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. Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes 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; i] In the case of Balance Sheet of the state of affairs of the Company as at 31 st March, 2009; ii] In the case of Profit and Loss Account of the profit for the year ended on that date, and iii] In the case of 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] i] The nature of the Companys business / activities during the year is such that clauses [viii] & [xiii] of paragraph 4 of the Companies [Auditors Report] Order, 2003 are not applicable to the Company for the year ended on 31st March, 2009. ii] In respect of its Fixed assets: [a] The Company has maintained proper records showing full particulars including quantitative details and the location of Fixed Assets. [b] The Company has physically verified certain assets during the year in accordance with a program of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification. [c] During the year the Company has carried out the rebuilding and expansion of existing furnace and installed/ upgraded plant and machinery. In the process company has disposed / discarded some unusable parts of old plant and machinery, furnace and moulds. In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year. iii] In respect of its inventory: [a] The inventory has been physically verified by management during the year. In our opinion the frequency of verification is at reasonable intervals. [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 were 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 inventory and no material discrepancies were noticed on physical verification. iv] In our opinion and according to the information and explanations given to us, during the year the Company has not granted any loans secured or unsecured to companies, firms or other parties as per Register maintained under section 301 of the Companies Act 1956. Accordingly paragraph [iii] [b], [c] and [d] of the Order are not applicable. v] In our Opinion and according to the information and explanations given to us, during the year the Company has taken unsecured loan of Rs. 3 crore from a company as per Register maintained under section 301 of the Companies Act 1956. The rate of interest and other conditions for loan taken are prima facie not prejudicial to the interest of the company. vi] 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 nature of its business with regards to purchase of inventory, fixed assets, sale of goods and services. vii] In respect of transactions entered in the Register maintained in pursuance of section 301 of the Companies Act, 1956; [a] To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the Register 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 exceeding the value of Rupees Five Lacs in respect of any party during the year have been made at prices which are resonable having regard to prevailing market prices at that time. viii] The Company has not accepted any deposits from the public. Therefore, the provisions of section 58A and 58AA of the Companies Act, 1956, and Rules framed there under and the directives issued by the Reserve Bank of India are not applicable. ix] In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business. x] According to the information and explanations given to us in respect of statutory and other dues; [a] The Company has been generally regular in depositing undisputed 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 any other statutory dues with the appropriate authorities during the year. [b] According to information and explanations given to us there are no undisputed amounts payable in respect of income tax, service tax, sales tax, customs duty and excise duty at the year end for a period of more than six months from the date they became payable. However the Wealth tax arrears of Rs. 1.28 Lacs as at the last day of financial year were outstanding for a period of more than six months from the date they became payable. [c] Disputed dues in respect of Sales Tax - aggregating to Rs.425.02 Lacs - pending before Sales Tax Authorities [including appeal to be filed] have not been deposited since the matters are pending before relevant Appellate Authorities, as listed below: Authority where the dispute is pending Assessment Year Amount [Rs. in Lacs] DCST, Appeal - 2, Vadodara 1995 - 1996 51.12 DCST, Appeal - 2, Vadodara 1996 - 1997 124.70 DCST, Appeal - 2, Vadodara 1997 - 1998 112.15 DCST, Appeal - 2, Vadodara 1998 - 1999 4.67 DCST, Appeal - 4, Vadodara 1999 - 2000 8.31 DCST, Appeal - 4, Vadodara 2000 - 2001 35.75 DCST, Appeal - 4, Vadodara 2001 - 2002 150.96 DCST, Appeal - 4, Vadodara 2002 - 2003 214.08 DCST, Appeal - 4, Vadodara 2003 - 2004 37.81 Total 739.55 Less : Liability recognized 314.53 Balance 425.02 xi] The Company does not have accumulated losses as on 31st March, 2009 and has not incurred cash losses in current year and immediately preceding financial year. xii] 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 the repayment of dues to financial institutions, banks and debentureholders. xiii] According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiv] In our opinion and according to the information and explanation given to us, the Company is not a Dealer / Trader in the securities. xv] In our opinion and according to the information and explanations given to us, no guarantees have been given by the Company for loans taken by others from banks and financial institutions, xvi] Based on information and explanation given to us by the Management, the term loans were applied for the purpose for which the loans were obtained. xvii] According to the information and explanation given to us and on overall examination of the Balance Sheet of the Company we report that no funds raised on short term basis [net of cash accruals during the year] have prima facie been used during the year for long term investment for acquisition of fixed assets. xviii] The Company has not made any preferential allotment during the year. xix] According to the information and explanations given to us and the records examined by us, securities have been created in respect of the debentures issued. xx] The Company has not raised any money by public issue during the year. xxi] 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. For CHATURVEDI SOHAN & CO. Chartered Accountants Sohan Chaturvedi Place : Mumbai Partner Dated : June 25, 2009 Membership No. 30760