Jasch Industries Ltd

To the Members, Jasch Industries Ltd. Sonepat.

We have audited the attached Balance Sheet of Jasch Industries Ltd., Sonepat as atMarch 31, 2010, the Profit and Loss Account and the Cash Flow Statement for the year endedon that date annexed thereto. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

1. We conducted our audit in accordance with Auditing Standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovernment 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 and5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we reportthat :-

(i) We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report are in compliance with the Accounting Standards referred to inSub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors, as on March31, 2010, and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on March 31, 2010 from being appointed as a director in termsof 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 theexplanations given to us, the said accounts read together with the significant AccountingPolicies and notes thereon give the information required by the Companies Act, 1956, inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India :

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March31, 2010; b) In the case of the Profit and Loss Account, of the profit for the year endedon that date; and c) In the case of Cash Flow Statement, of the cash flows for the yearended on that date.

For Arora & Choudhary Associates

Chartered Accountants

(Registration No. 003870N)

CA. Vijay K. Choudhary Partner

Membership No : 81843

New Delhi,

June 12, 2010

ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph 2 of our report of even date

1 In respect of its fixed assets :

The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. As explained to us, all the Fixedassets have been physically verified by the Management in a phased periodical manner,which in our opinion is reasonable, having regard to the size of- the Company and thenature of its assets. No material discrepancies were noticed on such physicalverification.

(iii) In our opinion, the Company has not disposed off substantial part of its fixedassets during the year. Therefore, it has not affected the ability of the company tocontinue as going concern.

In respect of its inventories :

(i) The inventories have been physically verified during the year by the management. Inour opinion, the frequency of verification s reasonable. i (ii) n I our opinion andaccording to the information and explanations given to us, the procedures of physicalverification of inventories followed by the management are reasonable and adequate inrelation to the size of the Company and the nature of its business. (iii) The Company hasmaintained proper records of inventories. As explained to us, there were no materialdiscrepancies noticed on physical verification of inventories as compared to the bookrecords.

In respect of loans, secured or unsecured, no loans have been granted or taken by theCompany to / from companies, firms or other parties covered in the register maintainedunder Section 301 of the Companies Act, 1956.Consequently, the requirements of Clauses(iii) (a to g) of paragraph 4 of the Order are not applicable.

In our opinion and according to the information and explanations given to us, there isan adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in internal control system.

In respect of the contracts or arrangements referred to in Section 301 of CompaniesAct,1956 :

(i) In our opinion and according to information and explanations given to us, no suchtransaction was made in pursuance of contracts or arrangements, that need to be entered inRegister maintained under section 301 of the Companies Act, 1956. Consequently, therequirements of Clause (v) (b) of paragraph 4 of the Order are not applicable.

According to the information and explanations given to us, the Company has not acceptedany deposits from the public. Therefore, the provisions of Clause (vi)of paragraph 4 ofthe Order are not applicable to the Company.

In our opinion, the Company has an internal audit system commensurate with the size andnature of its business.

The Central Government has not prescribed the maintenance of cost record by the CompanyUnder Section 209 (1) (d) of the Companies Act, 1956 for the Company's Business. n Irespect of statutory dues :

(i) According to the records of the Company, examined by us and the information andexplanations given to us, in our opinion, the company is generally regular in depositingwith the appropriate authorities undisputed statutory dues including Provident Fund,Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,Excise Duty, Cess and any other statutory dues applicable to it.

(ii) According to the records of the company examined by us and information andexplanations given to us, in our opinion, no undisputed amounts payable in respect of theaforesaid dues were outstanding, as at March 31, 2010for a period of more than 6 monthsfrom the date they became payable.

(iii) The disputed statutory dues aggregating Rs. 14.19 Lacs, that have not beendeposited on account of disputed matters pending before appropriate authorities are asunder:-