Kilpest India Ltd

To the Members of Kilpest India Limited,

1. We have audited the attached Balance Sheet of KILPEST INDIA LIMITED as at31st March, 2012, the Profit and Loss Account for the year ended on that date and the CashFlow Statement for the year ended on that date both annexed thereto. These financialstatements are the responsibility of the Company's management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

2. 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.

3. As required by the Companies (Auditors' 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& 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to in Paragraph 3 above:

a) We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of accounts, as required by law have been kept by theCompany so far as appears from our examination of the books.

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account and with the returnsreceived from the branches.

d) In our opinion, the Balance Sheet, the Profit and Loss Account and Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to inSub-section 3(C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors, as on 31stMarch, 2012 and taken on record by the Board of Directors, we report that none of theDirector is disqualified as on 31st March, 2012 from being appointed as a Director interms 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 theexplanations given to us, the said accounts give the information required by the CompaniesAct, 1956, in the manner so required, and give a true and fair view in conformity with theaccounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs o f the Company, as on31st March, 2012.

ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows for the year ended on thatdate.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph (3) of our report of even date)

i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) A major portion of fixed assets has been physically verified by the Management atreasonable intervals. In our opinion, the frequency of verification is reasonable havingregard to the size of the company and the nature of its assets. To the best of ourknowledge, no material discrepancies have been noticed on such verification.

(c) According to the information given to us and in our opinion, the company has notdisposed substantial portion of its fixed assests which will affect the company as a goingconcern.

ii) (a) The inventory of finished goods and raw and packing materials and stores andspare parts have been physically verified during the year by the Management. In ouropinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us, thecompany is maintaining proper records of inventory. The discrepancies noticed onverification, between the physical stocks and the book records were not material.

iii) (a) The company has taken unsecured loans from the parties covered in the registermaintained under Section 301 of the Companies Act, 1956. There are seven parties coveredin the register maintained under Section 301 of the Companies Act, 1956, from whom thecompany has taken loans. The maximum amount involved during the year and the year endbalance of the loans taken from such parties was Rs. 99.12 Lakhs. The company has notgranted any loans secured or unsecured to companies, firms or other parties covered in theregister maintained under Section 301 of the Companies Act, 1956.

(b) In respect of loans taken from parties covered in the register maintained underSection 301 of the Companies Act, 1956.

(i) In our opinion, the rate of interest and other terms and conditions on which loanshave been taken from companies, firms or other parties listed in the register maintainedunder Section 301 of the companies Act, 1956 are not prima faces prejudicial to theinterest of the company.

(ii) The company is regular in payment of principal amounts as stipulated and is alsoregular in payment of interest.

iv) In our opinion and according to the information and explanations given to us, thereare adequate internal control procedure, commensurate with the size of the Company and thenature of its business, with regard to purchase of inventory, fixed assets and with regardto the sale of goods. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in internal controls.

v) (a) To the best of our knowledge and belief and according to the information andexplanations given to us, we are of the opinion that the transactions that need to beentered into the register maintained under section 301 of the companies Act, 1956 havebeen so entered.

(b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements entered in the registermaintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupeesfive lakhs in respect of each party during the year have been made at prices which arereasonable, having regard to prevailing market prices at the relevant time where suchmarket prices are available.

vi) The Company has not accepted deposits from the public to which the directivesissued by the Reserve Bank of India and the provisions of Section 58A and 58AA of theCompanies Act, 1956 and the rules framed there under are applicable.

vii) In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.

viii) In our opinion and according to the information and explanations given to us, theCentral Government has not prescribed the maintenance of cost records under Section209(1)(d) of the Companies Act, 1956.

ix) (a) According to the information and explanations given to us, the company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Customs Duty,Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, and according to thebooks and records as products and examined by us, no undisputed amounts payable in respectof Income Tax, Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears, as at 31stMarch, 2012 for a period more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues ofIncome Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited onaccount of any dispute.

x) The company does not have any accumulated losses as of 31st March 2012. The companyhas not incurred cash losses during the financial year covered by our audit and theimmediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, thecompany has not defaulted in repayment of dues to financial institutions and bank.

xii) According to the information and explanations given to us, the company has notgranted loans and advances on the basis of security by way of pledge of shares, debenturesand other securities. Therefore, the provisions of clause 4(xii) of the Companies(Auditors Report) Order, 2003 are not applicable to the company.

xiii) 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.

xiv) 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 theCompanies (Auditor's Report) Order 2003 are not applicable to the Company.

xv) In our opinion the company has not given any guarantee for loan taken by othersfrom bank or financial institutions. Accordingly, the provisions of clause 4(xv) of theCompanies (Auditor's Report) Order 2003 are not applicable to the company.

xvi) In our opinion, the term loan have been applied for the purpose for which thesewere raised.

xvii) According to the information and explanations given to us and on an overallexaminations of the Balance Sheet of the company, we report that no funds raised on shortterm basis have been used for long term assets. No long term funds have been used tofinance short term assets.

xviii) According to the information and explanations given to us, during the periodcovered by our audit report, the company has not made preferential allotment of shares toparties and companies covered in the register maintained under Section 301 of theCompanies Act, 1956.

xix) In our opinion, the company has not issued debentures. Accordingly, the provisionsof clause 4 (xix) of the Companies (Auditor's Report) Order 2003 are not applicable to thecompany.

xx) During the period covered by our audit report, the company has not raised any moneyby public issues.

xxi) To the best of our knowledge and belief and according to the information andexplanations given to us, no fraud on or by the company has been noticed or reportedduring the course of our audit.