We have audited the Balance Sheet of BAID LEASING AND FINANCE COMPANY
 LTD. as on 31sl March 2012 and also the Profit & Loss account of the
 Company for the year ended on that 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 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 misstatement. An audit includes
 examining, on a test basis, 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditor''s Report) order, 2003 issued by
 the Central Government of India under subsection (4A) of Sec. 227 of
 the Companies Act, 1956, we enclose a statement on the matters
 specified in paragraph 4 and 5 of the said order as applicable.
 
 Further to our comments in the annexure referred to above, we report
 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, proper books of account as required by Law have been
 kept by the Company, so far as appears from our examination of these
 books; -
 
 c) The Balance Sheet and Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 d) In our opinion the Balance Sheet and Profit and Loss Account comply
 with the Accounting Standards referred to the sub-section (3C) of
 Section 211 of the Companies Act, 1956;
 
 e) On the basis of written representations received from the directors,
 as on 31 March 2012, and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31 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 explanation given to us, the accounts read with the notes thereon
 give the information required by the Companies Act, 1956 in manner so
 required and give a true and fair view:
 
 (i) In the case of the Balance Sheet of the state of affairs of the
 Company as at 31 March 2012. And
 
 (ii) In the case of the Profit and Loss Account of the Profit for the
 year ended on that date.
 
 (iii) In the case of the Cash Flow Statement of the cash flows of the
 company for the year ended on that date
 
 ANNEXURE TO THE AUDITOR''S REPORT
 
 Referred to in paragraph 3 of our report of even date,
 
 (i) (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As per the information and explanation given to us the Management
 has physically verified company''s assets. The programme of
 verification in our opinion, was reasonable having regard to the size
 of the company and the nature of its assets. To the best of our
 knowledge no material discrepancies were noticed on such verification.
 
 (c) The Company has not disposed off any plant and machinery affecting
 its going concern status.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management at intervals which in our opinion is reasonable.
 
 (b) In our opinion and according to the explanation given to us, the
 procedures of physical verification of inventories followed by the
 management are reasonable and adequate in relation to the size of the
 company and the nature of its business.
 
 (c) In our opinion the company is maintaining proper records of
 inventory. The discrepancies noticed on verification between the
 physical stocks and the book records were not material having regard to
 the nature of company''s business.
 
 (iii) (a) The company has transacted with 13 parties covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 transactions are by and large of the nature of current account and
 payment of lease rent, commission, interest etc. Sum total of the year
 end balances of the accounts of all such parties, taken together is
 Rs. 141.27 lac (Cr.) and Rs. 13.24 lac (Dr.) respectively.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 on which loans have been taken from/granted from the companies listed
 in the register maintained under section 301 of the Companies Act, 1956
 are not, prima facie, prejudicial to the interest of the company.
 
 (c) The amounts advanced by the company or taken by the company are of
 the nature of long term loans, wherein no fixed repayment schedule has
 been stipulated. Clause (iii)(c), to the extent it pertains to
 repayment of principle, is therefore inapplicable. The said parties
 however, have been by and large regular in the payment of interest.
 
 - (d) In the light of above fact, there is no overdue amount of loans
 taken from or granted to Companies, firms or other parties listed in
 the register maintained under section 301 of the Companies Act, 1956.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are ad- equate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our audit, we have
 not observed any continuing failure to correct major weaknesses in
 internal controls.
 
 (v) (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 the transactions that need to be entered into the register maintained
 under section 301 of the Companies Act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs,
 in respect of any party during the year have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) The company has made arrangement with fellow concerns in similar
 business for parking of short-term cash surpluses, at prevailing
 interest. There has been occasional credit balances in the accounts of
 such concerns.
 
 Subject to the above in our opinion and according to the information
 and explanation given to us, the company has complied with the
 provisions of sections 58A and 58AA of the Companies Act, 1956 and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. To the best of our knowledge no
 order has been passed, against the company, under the aforesaid
 sections, by the Company Law Board.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our information no cost records have been
 prescribed for the company by the Central Government under Rules made
 for the maintenance of cost records under section 209 (1) (d) of the
 Companies Act, 1956.
 
 (ix) (a) The undisputed statutory dues including provident fund,
 investor education protection fund, employees'' state insurance, income
 tax, sales tax, wealth tax, custom duty, excise duty, cess and other
 material statutory dues as applicable to the Company, have been
 generally regularly deposited with appropriate authorities subject to
 income-tax where there have been delays in deposit. Such delay however,
 in our opinion have not been serious.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty and cess were in arrears, as at for a
 period of more than six months from the date they became payable .
 
 (x) The company has no accumulated losses. As reflected in the cash
 flow statement the company has not incurred cash losses during the
 financial year covered by our audit as well as in its preceding
 financial year.
 
 (xi) According to the information and explanations given to us, the
 company has not obtained term loans from the financial institution,
 bank or debenture holders. In our opinion and according to the
 information and explanations given to us, the company has not defaulted
 in repayment of dues with regard to the working capital finance it has
 obtained from its banker.
 
 (xii) To the best of our information the company has not granted loans
 and advances on the basis of security by way of pledge of shares,
 debentures and other such securities.
 
 (xiii) The company is not a chit fund or a nidhi mutual benefit fund
 society. Therefore, the provisions of clause 4(xiii) of the Companies
 (Auditor''s Report) Order, 2003 are not applicable to the company.
 
 (xiv) In our opinion proper records have been maintained of the
 transactions and contracts entered in to with reference to company''s
 dealings in shares and securities and timely entries have been made
 therein. The securities in possession of company have been held either
 in company''  name or are held with blank transfer forms.
 
 (xv) Company has provided a corporate guarantee to Bank of Baroda
 against term loan and CC facility of Rs. 1 Cr. and Rs. 5 Cr.
 respectively, provided by said bank to Baid Motors Pvt. Ltd.
 
 (xvi) To the best of our information the company has not taken any term
 loan.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that the no funds raised on short-term basis have been used for
 long-term investment. No long-term funds have been used to finance
 short-term as sets except permanent working capital.
 
 (xviii) The company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Act.
 
 (xix) The company has not made any debenture issue.
 
 (xx) The company has not made any public issue during the period under
 review.
 
 (xxi) According to the information and explanation given to us no fraud
 on or by the company has been noticed or reported during the course of
 our audit.
 
                                          For SHARMA NARESH & ASSOCIATES 
 
                                                   Chartered Accountants
 
 Place: JAIPUR
 
                                                              Sd/-
 
 Date : 19/05/2012                                       (NARESH SHARMA)
 
                                                             PROPRIETOR 
                                 
                                                   Membership No. 71485