ఆడిటర్ నివేదిక Dujohn Laboratories Ltd.

Mar 31, 2010

We have audited the attached Balance Sheet of M/s. DUJOHN LABORATORIES LIMITED, as at 31st March,2010 and the annexed Profit and Loss Account and cash flow statement for the year ended on that date. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements bases on our audit.

We conducted our audit in accordance with 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order 2003 issued by the central Government of India in terms of section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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 our knowledge and belief were necessary for the purpose of our audit.

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

(c) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the books of account.

(d) In our opinion and to the best of our information the said Balance Sheet and Profit 8s Loss Account and cash flow statement comply with the Accounting standard referred to in section 211 (3c) of the companies act, 1956.

(e) On the basis of written representations received from the directors, as on 31st, March,2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March,2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of Companies Act, 1956.

(f) The Financial statement are prepared on a going concern basis even though the company has substancial accumulated losses and has eroded its net worth as explained in notes of accounts in para b.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India:-

i. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March,2010 and ii. In so far as it relates to the Profit 8s Loss Account of the Loss of the company for the year ended on that date. iii. In the case of the cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT FOR THE YEAR ENDED ON 31st MARCH.2010

(xvii) According to the information and explanations given to us and based on the generally accepted audit procedures carried out by us no personal expenses of employees or directors have been charged to Revenue Account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

xvii) The Company has accumulated losses at the end of the financial year and it has incurred losses in the current and immediately preceding financial year.

xviii) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of dues to lending banker and also defaulted to make statutory dues to P.F. Authorities, E.S.I. Authorities, Sales Tax Authorities, Excise Duty Authorities.

xix) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xx) The provisions of any special statute applicable to Chit Funds, Nidhi, or Mutual Benefit Society/fund do not apply to the Company. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

xxi) The Shares and other securities have been held by the Company, in its own name as explained to us and proper records in respect thereof have been maintained.

xxii) According to the information and explanation given to us, the Company has not given counter guarantee for loans taken by anybody.

xxiii) According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, we report that no funds raised on short- term basis have been used for long-term investment.

xxiv) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained u/s 301 of the Co. Act, 1956.

xxv) The Company did not have any outstanding secured debentures during the year.

xxvi) The Company has not raised any money through a public issue during the year under review.

(xxviii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

(xxix) The Company is a sick Company as per the provisions of Sick Industrial Companies (Special Provisions), Act, 1985.





Rao & Associates,

Chartered Accountants

Sd/

Date: 01/09/2010 (R.B. MENON)

Place :MUMBAI PARTNER

MEM.NO. 31305