Auditor Report of Sonell Clocks & Gifts Ltd.

Mar 31, 2012

1. We have audited the attached balance sheet of SONELL CLOCKS & GIFTS LIMITED as on 31st March 2012 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of company's management Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standard aet>erally 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 disclosure in the financial statement. An audit also includes assessing the accounting principles used and significant estimate 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.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act 1056, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report thafc-

a. We have obtained all the information and explanations, which to the best of our knowledge 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 the Company so far as it appears from our examination of those books;

c. The Balance sheet Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d. In our opinion the Balance sheet Profit & Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in section 211(3C) of the Companies Act 1966,

e. On the basis of representations received from directors as on March 31, 2006 and taken on the record by the Board of Directors, we report that all of the Directors are disqualified as on March 31,2011 from being appointed as a director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion, to the best of our information and according to the explanations given to us, the said accounts, subject to Note No. A (iil), B (a), (b) and (f) of Notes to Accounts in Note No. 17 and read together with other notes thereon gives 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 the case of the Balance sheet of the state of affairs of the Company as at 31st March, 2012.

(ii) In the case of the Profit and Loss Account of the loss

(Hi) of the Company for the year ended on that date.

(iv) In the case of the Cash Flow Statement of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT.

Referred to in paragraph 3 of the Auditor's Report to the Members of SONELL CLOCKS & GIFTS LIMITED on the financial statements for the year ended 31 March, 2012

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. z

(b) All the Fixed Assets have not been physically verified by the management during the year as the same has been in the custody of the bank.

(c) During the year, the Company has not disposed off a substantial part of its Fixed Assets.

2. (a) The Inventories have not been physically verified by the management at the end of the year as the same has been in the custody of the bank.

(b)& (c) We cannot express an opinion regarding and, the frequency of verification and procedure of physical verification of inventories.

3. [A] In respect of Unsecured Loans, taken by the Company from Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

We Report that:-

(a) The Company has taken unsecured loans from 4 parties aggregating to Rs, 75,26,862/- at the year end. The Maximum amount involved during the year was Rs. 75,26,862/-. In our opinion and according to the information and explanations given to us, the rate of interest wherever applicable, and other terms and conditions are not prima - facie prejudicial to the interest of the company.

(b) In respect of loans taken by Company, there Is no repayment of principal amount and Interest thereon.

[B] The Company has not granted any Loan Secured or Unsecured to any of the parties covered in the register maintained under section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sales of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control.

5. (a) In our opinion and according to the information and explanation given to us, the company has not entered into transaction made in pursuance of contracts or arrangements that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the company has not entered into transactions made in pursuance of contracts or arrangements to be entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000/- (Rupees Five Lacs Only) or more in respect of any party during the year.

6. As explained to us, the Company has not accepted any deposits from the Public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under.

7. In our opinion, the internal audit function is not applicable to the company.

8. Maintenance of Cost records has not been prescribed by the Central government under Section 209(1) (d) of the Companies Act, 1956 for any of the products of the Company.

9. According to the information and explanation given to us and records being made available to us, the undisputed statutory dues including Income Tax, Sales Tax, Wealth Tax, and other statutory dues wherever applicable have been generally regularly deposited with the appropriate authorities. According to the information and explanation given to us, no undisputed amount payable7 in respect of aforesaid dues were outstanding as on 31st March, 2012 for a period more than six monthsfrom the date of becoming payable. In our opinion and according to the information and explanations givafrto us, there are no disputed statutory dues pending before any authority. '

10. The Company has accumulated losses as on 31st March, 2012. The Company has Incurred losses during the current Financial Year but not In the immediately preceding Financial Year.

11. Based on our audit procedure and according to the information and explanation given to us, we state that tfiera is no repayment of dues and Interest on secured loans.

12. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

14. The Company is not dealing/ trading in shares, securities and debentures. All investments have been held by the Company in its own name.

15. There is no Guarantee outstanding at the year end except as shown in the Contingent Liability.

16. According to information and explanations given to us, the Company has not obtained any term loan during the year.

17. According to the Cash Flow statement on the Balance Sheet date and records examined by us and according to the information and explanation given to us, on overall basis, we report that no funds raised on short term basis have, prima - facie, been used during the year for long term investment.

18. During the year the company has not made any preferential allotment of shares to parties and Companies covered under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture during the year.

20. The Company has not made any public issue during the year to raise money. Accordingly the provision of clause 4 (xx) of the Companies (Auditor's report) Order, 2003 is not applicable to the Company.

21. In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B. R. Dalai & Co.

Chartered Accountants.

Place: Mumbai

Date: 25th August 2012 Sd/-

Bharat Dalai

(Proprietor)

Membership No.31052

Firm Reg. No:102024W

---

Mar 31, 2010

1. We have audited the attached balance sheet of SONELL CLOCKS & GIFTS LIMITED as on 31st March 2010, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of company’s management. Our responsibility is to express an opinion On these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standard 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 disclosure in the financial statement. An audit also includes assessing the accounting principles used and significant estimate 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.

3. As required by the Companies (Auditor’s 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 & 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion the Balance sheet, Profit & Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in section 211(3C) of the Companies Act, 1956,

e) On the basis of representations received from directors as on March 31, 2010 and taken on the record by the Board of Directors, we report that all of the Directors are disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of Sub-section (1) of Section of the Companies Act, 1956.

f) In our opinion, to the best of our information and according to the explanations given to us, the said accounts, subject to Note No. A (iii), B (a) & (b) of Notes to Accounts in Schedule 18 and read together with other notes thereon gives 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:

1. In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2010.

2. In the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date.

3. In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITOR’S REPORT.

Referred to in paragraph 3 of the Auditor’s Report to the Members of SONELL CLOCKS & GIFTS LIMITED on the financial statements for the year ended 31st March, 2010.

1. (a) The Company is maintaining proper records showing full particulars Including quantitative details and situation of fixed assets.

(b) All the Fixed Assets have not been physically verified by the management during the year as the same has been in the custody of the bank.

(c) During the year, the Company has not disposed off a substantial part of its Fixed Assets.

2. (a) The Inventories have not been physically verified by the management at the end of the year as the same has been in the custody of the bank.

(b)& (c) WE can not express an opinion regarding and the frequency of verification and procedure of physical verification of inventories.

3. [A] In respect of Unsecured Loans, taken by the Company from Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

We Report that:

(a) The Company has taken unsecured loans from - parties aggregating to Rs, 7,04,582/- at the year end. The Maximum amount involved during the year was Rs.13,58,712/-

(b) In our opinion and according to the information and explanations given to us, the rate of interest wherever applicable and other terms and conditions are not prima fincie prejudicial to the interest of the company.

(c) In respect of loans taken by Company, Company there is no repayment of principal amount and interest thereon.

[B] The Company has not granted any Loan Secured or Unsecured to any of the parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sales of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control.

5. (a) In our opinion and according to the information and explanation given to us, the company has not entered into transaction made in pursuance of contracts or arrangements that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the company has not entered into transactions made in pursuance of contracts or arrangements to be entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000/- (Rupees Five Lacs Only) or more in respect of any party during the year.

6. As explained to us, the Company has not accepted any deposits from the Public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under.

7. In our opinion, the internal audit function is not applicable to the company.

8. Maintenance of Cost records has not been prescribed by the Central government under Section 209(1) (d) Of the Companies Act, 1956 for any of the products of the Company.

9. According to the information and explanation given to us and records being made available to us, the undisputed statutory dues including Income Tax, Sales Tax, Wealth Tax, and other statutory dues wherever applicable have been generally regularly deposited with the appropriate authorities. According to the information and explanation given to us, no undisputed amount payable in respect of aforesaid dues were outstanding as on 31st March, 2010 for a period more than six months from the date of becoming payable. In our opinion and according to the information and explanations given to us, there are no disputed statutory dues pending before any authority.

10. The Company has accumulated losses as on 31st March, 2010 which is mote than its net worth. The company has not incurred losses during the current Financial Year, aims in the immediately preceding Financial Year.

11. Based on our audit procedure and according to the information and explanation given to us, we state that there is no repayment of dues and interest on secured loans.

12. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor’s Report) Order 2003 is not applicable to the Company.

14. The Company is not dealing/ trading in shares, securities and debentures. All investments have been held by the Company in its own name.

15.There is no Guarantee outstanding at the year end to them.

16. According to information and explanations given to us, the Company has not obtained any term loan during the year.

17. According to the Cash Flow statement on the Balance Sheet date and records examined by us and according to the information and explanation given to us, on overall basis, we report that no funds raised on short term basis have, prima - facie, been used during the year for long term investment.

18. During the year the company has not made any preferential allotment of shares to parties and Companies covered under Section 301 of the Companies Act, 1956.

19.The Company has not issued any debenture during the year.

20. The Company has not made any public issue during the year to raise money. Accordingly the provision of clause 4 (xx) of the Companies (Auditor’s report) Order, 2003 is not applicable to the Company.

21. In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B. R. Dalai & Co. Chartred Accountants.

(Bharat DALAL)

(Proprietor) Membership No.31052

Firm Reg. No:102024W

Place: Mumbai

Date : 1st September, 2010.