Bhagwati Autocast Ltd

To,

The Members,

BHAGWATI AUTOCAST LIMITED

1. We have audited the attached balance sheet of BHAGWATI AUTOCAST LIMITED as at 31stMarch 2012 and also the profit and loss account and the cash flow statement of the Companyfor the year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the Auditing Standards generally acceptedin India. Those standards require that we plan & perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by theCompanies (Auditor’s Report) (Amendment) Order, 2004 issued by the Central Governmentof India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (referredto as "the Act") we enclose in the Annexure, a statement on the mattersspecified in the 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 purpose 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 & Loss account and Cash Flow statement dealt with bythis report are in agreement with the books of account.

iv. In our opinion, the Balance Sheet, Profit & Loss account and Cash Flowstatement dealt with by this report complies with the Accounting Standards referred to insub-section (3C) of section 211 of the Act.

v. Based on the written representations made by all the directors of the Company as on31st March 2012 and according to the information and explanations as made available andtaken on record by Board of Directors, We report that none of the Directors isdisqualified as on 31st March, 2012 from being appointed as a Director in terms of clause(g) of section 274 (1) of the Act.

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2012,

b. In the case of the Profit and Loss Account of the Profit of the Company for the yearended on that date and,

c. In the case of the Cash Flow statement of the cash flows for the year ended on thatdate.

ANNEXURE TO AUDITORS’ REPORT

Re: Bhagwati Autocast Limited

Referred to in paragraph 3 of our report of even date

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

b) The Fixed Assets have been physically verified by the Management during the yearended 31.03.2012 in a phased periodical manner, which in our opinion, is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on verification.

c) During the year, the Company has not disposed of major part of the fixed assets.

ii.) a) The inventory (except stock lying with the third parties for which confirmationreceived from them) have been physically verified by the management. In our opinion, thefrequency of verification is reasonable.

b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and nature of itsbusiness.

c) The company is maintaining proper records of inventory.

No material discrepancies were noticed on verification of stocks as compared to bookrecords.

iii.) a) The Company has not granted any loans, secured or unsecured to Companies,firms or other parties covered in the register maintained under section 301 of theCompanies Act. 1956. Consequently, requirement of clauses iii(b), iii(c), iii(d), ofparagraph 4 of the order are not applicable.

b) The Company has not taken any loans, secured or unsecured from Companies, firms orother parties covered in the register maintained under section 301 of the Companies Act.1956.

Consequently, requirement of clauses iii(f), iii(g) of paragraph 4 of the order are notapplicable.

iv.) In our opinion and according to the information and explanations given to us,there are adequate internal control procedure commensurate with the size of the Companyand the nature of its business with regard to purchase of Inventory, fixed assets and withregard to sale of goods. Further on the basis of our examination of the books and recordsof the Company, carried out in accordance with the generally accepted auditing practicesin India, We have neither come across nor have been informed of any continuing failure tocorrect major weaknesses in the aforesaid internal control procedures.

v) a) According to the information and the explanations given to us, we are of theopinion that the transactions that need to be entered into the register maintained undersection 301 of the Act, have been so entered.

b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts, arrangements entered in the registermaintained under Section 301 of the Act, and exceeding the value of Rs.

5.00 (Five) Lacs in respect of any party during the year have been made at prices whichare reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion and according to the information and explanations given to us, theCompany has complied with the provisions of Section 58A and 58AA of the Companies(Acceptance of Deposits) Rules 1975 with regard to the deposits accepted from the public.According to information and explanations given to us no order under the aforesaidsections has been passed by the Company Law Board on the Company.

vii) In our opinion, the Company has an internal audit system commensurate with itssize and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company inrespect of products were, pursuant to the rule made by the Central Government of India,the maintenance of cost records has been prescribed under clause (d) of sub-section (1) ofsection 209 of the Act, and are of the opinion that, prima facie, the prescribed accountsand records have been made and maintained. We have not, however, made a detailedexamination of the records with a view to determine whether they are accurate or complete.

ix) a) The company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund, investor education and protectionfund, employees’ state insurance, income tax, sales tax, wealth tax, service tax,custom duty, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amountspayable in respect of income tax, sales tax, wealth tax, service tax, custom duty, exciseduty, cess were in arrears except as under;

x) The Company does not have accumulated loss at the end of the year and the Companyhas not incurred cash loss during the current & preceding year.

xi) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to financial institutions, banks ordebenture holders.

xii) The Company has not granted any loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi / mutual benefit fund/ society.Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures andother investments. Therefore, the provisions of clause (xiv) of paragraph 4 of the orderare not applicable.

xv) In our opinion and according to the information and explanations given to us theCompany has not given any guarantee for loans taken by others from banks/financialinstitutions. Therefore. The provisions of clause (xv) of paragraph 4 of the order are notapplicable.

xvi) In our opinion, the term loans obtained have been applied for the purpose forwhich they were taken.

xvii) According to the information and explanations given to us, on an overall basis,funds raised on short term basis have not, prima facie, been used during the year forlong-term investments.

xviii) The Company has not made any preferential allotment of shares to parties andCompanies covered in the register under section 301 of the Companies Act, 1956.

xix) According to the information and explanations given to us the Company had notissued any Secured Debentures during the year.

xx) During the year, the Company has not raised money by public issue(s).

xxi) To the best of our knowledge and belief and according to the information andexplanation given to us, no fraud on or by the Company, was noticed or reported during theyear.