Perfectpac Ltd

To

The Members, PERFECTPAC LIMITED

1. We have audited the attached Balance Sheet of Perfectpac Limited as at 31stMarch, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended onthat 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.

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 and5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(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 account as required by law have been kept by theCompany so far as appears from our examination of those books;

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

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash FlowStatement dealt with by this report comply with the accounting standards referred to insub-section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors, as on 31stMarch, 2011 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2011 from being appointed as a Director interms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on thesaid date;

(f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with the Notes thereon, and attached theretogive the information required by the Companies Act, 1956, in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India :

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2011;

(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 the Cash Flow Statement, of the cash flows for the year ended onthat date.

ANNEXURE TO AUDITORS' REPORT (Referred to in paragraph 3 of Auditors'Report of even date)

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

b) Verification of fixed assets is being conducted in a phased programme by themanagement designed to cover all assets over a period of three years, which in our opinionis reasonable having regard to the size of the Company and the nature of assets. Nomaterial discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year are not significant and therefore donot affect the going concern status of the Company.

ii. a) As explained to us, inventories have been physically verified during the year bythe management. In our opinion 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 has maintained proper records of inventory and the discrepancies noticed on suchverification between physical stocks and book records were not material.

iii. a) There are no companies, firms or other parties covered in the Registermaintained u/s 301 of the Companies Act, 1956 to which the company has granted any loans,secured or unsecured, as per information & explanations given to us and Register u/s301 produced before us.

b) Since no loans were granted to parties covered in Register u/s 301, Paras 4(iii)(b), (iii) (c) & (iii) (d) of the Order are not applicable to the Company.

c) The Company has taken unsecured loan from Managing Director and 2(two) companiescovered in the Register maintained u/s 301 of the Companies Act, 1956. The maximum amountinvolved in the transaction was Rs 2.14 Crores and balance outstanding at the year end wasRs 2.07 Crores.

d) In our opinion the rate of interest and other terms and conditions of loans taken bythe company are not prima facie prejudicial to the interest of the company.

e) The company is regular in payment of interest on the above loans but as there is nostipulation for repayment of loan we are not in a position to make specific comments forthe same.

iv. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company andnature of its business with regard to purchases of inventory, fixed assets and for thesale of goods & services. During the course of our audit we have not come across anycontinuing failure to correct major weaknesses in internal controls.

v. a) According to the information & explanations given to us, we are of theopinion that particulars of contracts or arrangements referred to in section 301 of theCompanies Act, 1956 have been entered in the Register required to be maintained under thatsection,

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 any party during the year have been made at prices which areprima facie reasonable having regard to prevailing market prices at the relevant time.However, for sales made as per customers' specifications comparable prices are notavailable.

vi. As the company has not accepted any deposits from the public, within the meaning ofsection 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975paragraph 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit functions carried out during the year by a firmof Chartered Accountants appointed by the management have been commensurate with the sizeof the Company and nature of its business.

viii. The Government has not prescribed the maintenance of cost records for theproducts of the Company under section 209 (1) (d) of the Companies Act, 1956 for the yearunder review.

ix. a) According to the information and explanations given to us and the records of theCompany examined by us, the Company has been generally regular in depositing undisputedstatutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Salestax, Wealth tax, Custom Duty, Excise Duty, Cess, Service Tax and other material statutorydues with the appropriate authorities during the year. We are informed that there are noundisputed statutory dues as at the year end outstanding for a period of more than sixmonths from the date they became payable.

b) According to the books of account and records as produced and examined by us inaccordance with the generally accepted auditing practices in India, there are no dues ofIncome Tax, Wealth tax, Sales tax, Service tax, Customs Duty, Excise Duty & Cess whichhave not been deposited on account of any dispute.

x. The Company has no accumulated losses as at the end of the financial year. TheCompany has not incurred cash losses during the current and the immediately precedingfinancial year.

xi. In our opinion and according to the information and explanations give to us, theCompany has not defaulted in repayment of dues to banks & financial institution. TheCompany has not obtained any borrowings by way of debentures.

xii. Based on our examination of documents and records of the Company and as perinformation & explanations given to us, we are of the opinion that the company has notgranted loans and advances on the basis of security by way of pledge of shares, debenturesand other securities.

xiii. In our opinion the company is not a chit fund or nidhi/mutual benefitfund/society and hence clause (xiii) of the Order is not applicable to the company.

xiv. In our opinion, the company is not dealing in or trading in shares, securities,debentures and other investments and hence clause (xiv) of the Order is not applicable tothe company.

xv. As per information & explanations given to us the company has not givenguarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to information and explanations given to us, the termloans have been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the company, we report that no funds raised on shortterm basis have been used for long term investment.

xviii. According to the information & explanations given to us no preferentialallotment of shares has been made by the company to parties and companies covered in theRegister maintained under Section 301 of the Companies Act within the meaning of SEBI(Disclosure & Investor Protection) Guidelines, 2000.

xix. According to the information & explanations given to us, no debentures havebeen issued by the company during the year.

xx. Based on our examination of books and records of the company, no public issue wasmade by the company during the year.

xxi. During the course of our examination of the books of account carried out inaccordance with the generally accepted auditing practices in India, we have not comeacross any instance of fraud on or by the company nor have we been informed by themanagement of any such instance being noticed or reported during the year.