We have audited the attached Balance sheet of AUTOMOBILE PRODUCTS OF
 INDIA LTD as at 31st March, 2012, the Profit and Loss Statement and the
 Cash Flow Statement for the year ended on that date, both 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 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 misstatements. An audit includes,
 examining on a test basis, evidence supporting the amounts and
 disclosure 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.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Company Law Board 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.
 
 2.  Further to our comments in the Annexure referred in paragraph 1
 above, we state that:
 
 a) We have obtained all the information and explanation, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 b) In our opinion, the Company has kept proper books of account, as
 required by law, so far as appears from our examination of such books.
 
 c) The Balance Sheet, Profit and Loss Statement and the Cash Flow
 Statement referred to in this report are in agreement with the books of
 account.
 
 d) In our opinion, the Profit and Loss Statement, the Balance Sheet and
 the Cash Flow Statement comply with the Accounting Standards referred
 to in Section 211 (3 C) of the Companies Act, 1956.
 
 e) On the basis of written representation received from Directors, and
 taken on record by the Board of Directors, we report that none of the
 Directors are disqualified as on 31st March, 2012 from being appointed
 as a Director in terms of Section 274 (1) (g) of the Companies Act,
 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said Balance Sheet, the Profit and
 Loss Statement and the Cash Flow Statement, read together with other
 notes and accounting policies, 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 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, 2012
 
 (ii) In so far as it relates to the Profit and Loss Statement of the
 LOSS of the Company for the year ended on that date, and
 
 (iii) In so far as it relates to the Cash Flow Statement, of the Cash
 Flow of the Company for the year ended on that date.
 
 ANNEXURE TO THE AUDTORS'' REPORT (Referred to in paragraph 1 of our
 report of even date)
 
 In terms of the information and explanation given to us and the books
 and records examined by us in the normal
 
 course of audit and to the best of our knowledge and belief, we state
 as under:
 
 
 
 1.  a) The Company has maintained proper records showing full
 particulars including quantitative details and
 
 situation of Fixed Assets.
 
 b) There were no Fixed Assets, except land, belonging to the Company.
 
 c) No substantial part of fixed assets have been disposed off during
 the year.
 
 2.  a) The stock of finished goods stores and spare parts have been
 physically verified at reasonable intervals by
 
 the management.
 
 b) The procedure of physical verification of inventories followed by
 the management is reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory and no
 material discrepancies are noticed on such physical verification.
 
 3.  The Company has taken loans from companies 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 with regard to purchase of stores, spare parts, components and
 other assets and with regard to the sale of goods. No instances of
 continuing failure to correct major weaknesses in Internal Control were
 noticed.
 
 5.  According to the information and explanation given to us, there
 were no transactions of purchase of goods and materials with companies
 covered under Section 301 of the Companies Act, 1956.
 
 6.  The Company has not accepted any deposit from the public. The
 provisions of sections 58A & 58AA of the Companies Act, 1956, and the
 Rules framed there under are not applicable.
 
 7.  In our opinion, the Company has no separate internal audit system.
 However, there are adequate internal control procedures commensurate
 with its size and nature of its business.
 
 8.  The Central Government has not prescribed for the Company the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956.
 
 9.  According to the records of the Company, the Company is generally
 regular in depositing undisputed statutory dues including Tax Deducted
 at Source with the appropriate authorities. According to the
 information and explanation given to us, there were no undisputed
 amount payable in respect of tax deducted at source and outstanding as
 at 31st March, 2012, for a period of more than six months from the date
 they became payable. The Income Tax demand for Assessment Years 2003-04
 and 2008-09, disputed and under appeal are as follows:
 
 A.Y. 2003-04 Rs 29,64,061
 
 A.Y. 2008-09 Rs 9,71,20,638
 
 10.  The Company''s accumulated losses at the end of the financial year
 are more than fifty percent of its net worth and it has incurred cash
 losses during this year and in the financial year immediately
 preceding this financial year.
 
 11.  The Company has not defaulted in repayment of dues to Financial
 Institutions or Banks or Debenture Holders, during the year.
 
 12.  The Company has not granted any loans and advances during the
 year, on the basis of security by way of pledge of shares .debentures
 and other securities.
 
 13.  The Company has not given guarantee for loans taken by others from
 Banks or Financial Institutions.
 
 14.  The Company has not obtained term loans during the year.
 
 15.  As per the records of the Company, no funds were raised on short
 term basis and used for long term investment and vice versa.
 
 16.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 17.  The Company has not issued any debentures and hence creation of
 securities in respect of debentures does not arise.
 
 18.  The Company has not raised money by way of public issues.
 
 19.  According to the information and explanation furnished to us, no
 fraud on or by the Company has been noticed or reported during the
 year.
 
                                       For VENKATESH & CO.,
                                    CHARTERED ACCOUNTANTS
 
 PLACE : Chennai V.                              DASARATY
 
 DATE : 29th August, 2012                         PARTNER
 
                                               M.No.26336
 
                                        Regn. No. 004636S