Pushpsons Industries Ltd

To

The members of

Pushpsons Industries Limited.

1. We have audited the attached Balance Sheet of Pushpsons Industries Limited, as at31st March, 2010, the Profit and Loss Account and also the Cash Flow Statement for theyear ended on that date annexed thereto. These financial statements are the responsibilityof the Company’s management. Our responsibility is to express an opinion on thesefinancial 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 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 Companies (Auditor’s Report) Order, 2003 as amended by theCompanies (Auditor’s Report) (Amendment) Order 2004, (together the’ Order)issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Companies Act, 1956, we enclose in the Annexure a statement on the matters specifiedin 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 ourknowledge and belief were necessary for the purposes 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 books of account;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statementdealt 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 written representations received from the directors, as on 31stMarch, 2010 and taken on record by the Board of Directors, we report that none of thedirector is disqualified as on 31st March 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 give the information required by the CompaniesAct, 1956, and in the manner so required and give a true and fair view in conformity withthe accounting principles generally accepted in India:

(a) In case of the balance sheet, of the state of affairs of the Company as at 31stMarch, 2010.

(b) In the case of the profit and loss account, of the loss for the year ended on thatdate and

(c) In the case of cash flow statement, of the cash flows for the year ended on thatdate.

Referred to in Paragraph 3 of our Report of even date.

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) In our opinion, the management has physically verified the fixed assets during theyear at reasonable intervals having regard to the size of the company and nature of itsassets. No material discrepancy was noticed on such verification.

(c) In our opinion and according to the information and explanations to us, the Companyhas not disposed of a substantial part of its fixed assets during the year.

2. (a) As explained to us the inventories have been physically verified by themanagement at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, theprocedure of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the company and nature of its business.

(c) The Company has maintained proper records of inventory. According to theinformation and explanations given to us, no material discrepancy was noticed on suchverification.

3. (a) According to the information and explanations given to us, the Company hasduring the year not granted any loans, secured or unsecured to companies, firms, otherparties covered in the register maintained under Section 301 of the Companies Act, 1956.Accordingly, paragraph 4(iii)(a),(b),(c) and (d) of the Order, are not applicable.

(b) According to the information and explanations given to us, the Company has takenunsecured loan from two directors of the company, the amount outstanding as on 31st March,2010 is Rs. 120.00 lacs.

(c) The loans are interest free and other terms and conditions of the loans taken bythe company are not prima facie prejudicial to the interest of the company and there areno stipulations as to repayments.

4. In our opinion and according to the information and explanation given to us, thereare adequate internal control procedures commensurate with the size of the company and thenature of its business with regard to the purchases of inventory and fixed assets and forthe sale of goods. There are no sale of services during the year. Further, on the basis ofour examination and according to the information and explanations given to us, we haveneither come across nor have any information of any instance of major weakness in theinternal controls systems.

5. In our opinion and according to the information and explanations given to us, thetransactions that need to be entered in pursuance of Section 301 of the Companies Act,1956 have been entered, and the transactions have been made at prices, which arereasonable with regard to the prevailing market prices at the relevant time.

6. As the Company has not accepted any deposits from the public, paragraph 4(vi) of theOrder is not applicable.

7. In our opinion, the company has an Internal Audit System commensurate with its sizeand the nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section209(1)(d) of the companies Act, 1956 in respect of activities carried on by the company.Hence the provisions of clause 4(viii) of the Companies (Auditor’s Report) Order,2003 are not applicable to the company.

9. (a) According to the information and explanations given to us, the company has beenregular in depositing undisputed statutory dues including Provident Fund, Employees’State Insurance, Income Tax, Sales Tax, Service tax and other statutory dues applicable toit with appropriate authorities. According to the information and explanations given to usby the company, there were no arrears of outstanding statutory dues as at 31st March, 2010for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues ofsales tax, income tax, service tax, excise duty that have not been deposited withappropriate authorities on account of any dispute .

10. The company’s accumulated losses at the end of the financial year are lessthen fifty percent of its net worth and it has not incurred cash losses during the yearand in the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to bank.

12. The company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund, nidhi, mutual fund or a society.Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report ) Order,2003 (as amended) are not applicable to the Company.

14. According to the information and explanations given to us, the company is nothaving dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has notgiven any guarantee for loans taken by others from banks or financial institutions.

16. The company has not taken any term loan during the year.

17. According to the information and explanations given to us, the company has notraised any funds on short-term basis. 18. The company has not made any preferentialallotment of shares to parties or companies covered in the register maintained undersection 301 of the Companies Act, 1956.

19. The company has not issued any debentures.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements as per the information and explanations given by themanagement , we report that no fraud on or by the company has been noticed or reportedduring the course of our audit.