Auditor Report of Magna Colors Ltd.

Mar 31, 2011

We have audited the attached Balance Sheet of MAGNA COLORS LIMITED as at 31st March 2011 and also the Profit and Loss Account for the year ended on the date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatements. An audit includes examining, on test basic, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as follows:

1 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 the paragraphs 4 and 5 of the said Order.

2 Further to our comments in the annexure referred to in paragraph 1 above:

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) Kept by the company so far as appears from our examination of the books.

c) The Balance Sheet and Profit & Loss Account dealt with by this reports are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this reports comply with the Accounting Standards referred to in sub- section (3C) of Section 211 of the companies Act, 1956.

e) On the basis of the written representations received from the Directors as on 31st march 2011 and taken on record by the Board of Directors, we do hereby certify that none of the Directors of the Company i.e. MAGNA COLORS LIMITED as on 31st March 2011 is disqualified From being appointed as a director in the aforementioned company in terms of clause (g) of sub-section (1) of Section 274 of the companies. Act, 1956 on the said date.

f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts, read together with the significant Accounting policies and Notes forming part of accounts, give the information required by the companies Act, 1956 in the manner accounting principles generally accepted in India;

i) In the case of the Balance Sheet, of the State of Affairs of the company as on 31st March 2011;

ii) In the case of the Profit and Loss account, of the Profit of the Company for the year ended on the date.

Referred to in paragraph 1 of our Report of even date:

1. The Company has no Fixed Assets during the year under Audit.

2. The securities are held as Investment by the company.

3. The Company has not granted / taken Unsecured Loan to/from Companies, firms or other parties listed in the Register maintained under Section 301 of Companies Act, 1956.

4. In our opinion the Company has an Internal Control System to commensurate with its size and nature of its business.

5. In our opinion and according to the information given to us, the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules under are not applicable to the Company.

7. The clause relating to the Internal Audit System is not applicable to the Company.

8. Maintenance of Cost Records under Section 209(1 )(d)of the Companies Act,1956 are not applicable to the Company.

9. The Company has no undisputed statutory dues payable to the government outstanding for more than six months as on the balance sheet date.

10. The company has not accumulated losses as at 31 March 2011 which more than 50% of the net worth of the Company.

11. According to the records of the company examined by us and on the basis of information & explanations given to us, the Company has not defaulted in repayment of its dues to any financial institution or banks during the year, except to the extent of bank o/d of Rs.36596823/- as in Schedule-3 of the Balance Sheet.

12. According to the information and explanations 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. The provisions of any Special Statute applicable to chit fund, nidhi or Mutual fund benefit/societies are not applicable to the company.

14. The Company has maintained proper records of transaction and contracts in respect of investment in shares, securities, debentures and other investment and timely entries have been made therein. All shares debentures and other investment have been held by the Company in its own name.

15. According to the information any explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial and therefore paragraph 4(xv) Of the order is not applicable to the Company.

16. No Term loans have taken during the year of Audit.

17. On the basis of an overall examination of the financial statements of the company, there are no funds raised on a short term basis which have been used for long term investment and vise versa.

18. The Company has not made any preferential allotment of shares during the year to any parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

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

20. The Company has not raised any money by public issues during the year.

21. To the best of our knowledge and explanations gives to us, no fraud on or by the company has been noticed or reported during the year.

For Soumitro Mukherjee & Co.

Chartered Accountants

Sd/-

C. A. S. Mukherjee

Proprietor

Membership No. 55585

Place : Mumbai

Date :5th September, 2011.