IP Rings Ltd

TO THE MEMBERS OF IP RINGS LIMITED

We have audited the attached Balance Sheet of IP Rings Limited as at 31^stMarch 2012 and also the Statement of Profit and Loss and Cash Flow statement for the yearended on that date annexed thereto. These financial statements are the responsibility ofthe Company s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with the 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 a 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.

1. As required by the Companies (Auditor s Report) Order, 2003 as amended by Companies(Auditor s Report) (Amendment) Order, 2004 issued by the Central Government of India interms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. 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, Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account;

IV. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to insub-section (3C) of section 211 of the Companies Act, 1956.

V. On the basis of the written representations received from the Directors, as on 31^stMarch 2012 and taken on record by the Board of Directors, we report that none of theDirector is disqualified from being appointed as a Director of the company in terms ofclause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on the said date.

VI. In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts give the information required by the Companies Act, 1956,in the manner so required give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) in the case of Balance Sheet, of the state of affairs of the Company as at 31stMarch 2012;

(b) in the case of Statement of Profit and Loss, of the Profit for the year ended onthat date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

Annexure referred to in paragraph 1 of our report of even date.

I. (a) The Company has maintained proper records for its Fixed Assets showing fullparticulars including quantitative details and situation of those Assets.

(b) The Company has a policy of physically verifying its Fixed Assets once in two yearswhich in our opinion is reasonable having regard to the size of the Company and nature ofits business. During the year Fixed Assets have not been physically verified as it wasdone last year by the management.

(c) No Fixed Assets have been sold / disposed off during the year.

II (a) Physical verification of inventory has been conducted by the management atreasonable intervals.

(b) The procedures for physical verification of inventory followed by the Managementare in our opinion, reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticedon physical verification were not material as compared to book records and have beenproperly dealt with in the books of accounts.

III The Company has not granted or taken any loan, secured or unsecured, to/fromcompanies, firms or other parties covered in the Register maintained under Section 301 ofthe Companies Act, 1956.

IV In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business with regard to purchase of inventory, fixed assets and for sale ofgoods and services. During the course of our audit, we have not observed any majorweaknesses in internal controls system.

V (a) We are of the opinion that particulars of contracts or arrangement referred to inSection 301 of Companies Act, 1956 have been entered into the register maintained underthe said Act.

(b) In our opinion and according to the information and explanation given to us, thetransactions made in pursuance of contracts or arrangements entered in the registermaintained under section 301 of the Companies Act,1956 have been made at prices which arereasonable having regard to the prevailing market prices for similar transactions. Goodssold to a Company in which a Director was interested are to the specific needs of thecustomer. Hence prices of such goods are not strictly comparable.

VI The Company has not accepted any deposit from the public.

VII In our opinion, the Company has an internal audit system commensurate with the sizeand nature of its business.

VIII The Central Government has prescribed maintenance of cost records under Section209(1) (d) of the Companies Act, 1956 for manufacture of Automotive Parts and Accessories.On the basis of the records produced, we are of the opinion that, prima facie, the costrecords and accounts prescribed by the Central Government of India under Section 209(1)(d) of the Companies Act, 1956 have been made and maintained.

IX (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund, Investor Education and Protection Fund, EmployeesState Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, ExciseDuty, Cess and other statutory dues applicable to it.

There are no arrears of undisputed amount of outstanding statutory dues as at 31^stMarch 2012 for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there are no disputedamounts that remain unpaid in respect of Wealth Tax, Customs Duty, Excise Duty, Cess andService Tax as at 31^st March 2012.

However, in respect of Income Tax & VAT, disputed amounts that remain unpaid aredisclosed hereunder:

X The Company has no accumulated losses. The Company has also not incurred cash lossesduring this financial year and in the immediately preceding financial year.

XI The Company has not defaulted in repayment of loans availed from banks. The companyhas no borrowings from financial institutions and has not issued debentures.

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 provisions of special statute applicable to chit funds / nidhi / mutualbenefit funds / society do not apply to the Company.

XIV The Company has made certain investments in shares and mutual funds. Properinvestment records have been maintained by the Company. Transactions have been regularlyupdated as and when taken place. All investments of the Company are held in its own name.

XV The Company has not given any guarantee for loans taken by others from bank orfinancial institutions.

XVI Term Loans availed from banks have been utilized towards the intended purpose.

XVII According to the information and explanations given to us and on an overall reviewof utilization of funds, we observed that no short-term funds have been used for long-terminvestments.

XVIII During the year, the Company has not made any preferential allotment of shares toparties and companies covered in the Register maintained under Section 301 of theCompanies Act, 1956.

XIX During the year, the Company has not raised any money by public issue.

XX According to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported.