We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED
 as at 30th September, 2011, and the related Profit and Loss Account and
 Cash Flow Statement 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.
 
 1.  We have 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 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 reasonable basis for
 our opinion.
 
 2.  As required by the Companies (Auditor''s Report) Order, 2003 (CARO,
 2003), (as amended) issued by the Central Government of India in terms
 of Section 227(4A) of the Companies Act,1956, we annex hereto a
 Statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 3.  Further to our comments in the Annexure referred to in paragraph 2
 above, we report that:- (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) 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 such
 books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by the report are in agreement with the books of account of
 the Company;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement comply with the Accounting Standards referred to in
 section 211 (3C) of the Companies Act, 1956, to the extent applicable;
 
 (e) On the basis of the written representations received from the
 Directors, as on 30th September, 2011 and taken on record by the Board
 of Directors, we report that none of the Directors are disqualified as
 on 30th September, 2011, from being appointed as a Director in terms of
 Clause (g) of sub-section (1) of Section 274 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 accounts read together with the
 notes thereon, give the information required by the Companies Act,
 1956, in the manner so required and give a true and fair view in
 conformity with the accounting principles generally accepted in India :
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 30th September, 2011;
 
 (b) in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and
 
 (c) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 REPORT OF EVEN DATE
 
 Re : BAJAJ HINDUSTHAN LIMITED (the Company)
 
 1.  (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets;
 
 (b) As explained to us, all the fixed assets have been physically
 verified by the management in a phased periodical manner, which in our
 opinion is reasonable, having regard to the size of the Company and
 nature of its assets. No material discrepancies were noticed on such
 physical verification;
 
 (c) In our opinion, the Company has not disposed off substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  In respect of its inventories:
 
 (a) As explained to us, the inventories have been physically verified
 by the management at reasonable intervals during the year;
 
 (b) As explained to us, the procedures of physical verification of the
 inventory followed by the management are, in our opinion, reasonable
 and adequate in relation to the size of the Company and the nature of
 its business;
 
 (c) According to the inventory records produced to us for our
 verification, we are of the opinion that the Company is maintaining
 proper records of its inventory.  Further, discrepancies noticed on
 physical verification of inventories, if any, referred to above, as
 compared to book records, though not material, have been properly dealt
 with in the books of account.
 
 3.  In respect of the loan, secured or unsecured, granted or taken by
 the Company to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act,1956:
 
 (a) The Company has given loans to two subsidiary companies. In respect
 of the said loans, the maximum amount outstanding at any time during
 the year is Rs 134.10 crores and outstanding balance as at year end is Rs
 133.92 crores;
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loans given by the Company, are not prima facie prejudicial to the
 interest of the Company;
 
 (c) The principal amounts are repayable on demand and there is no
 repayment schedule. The interest is payable on demand;
 
 (d) In respect of the said loans, these are repayable on demand and
 therefore the question of overdue amount doesn''t arise;
 
 (e) The Company has not taken any loan during the year from companies,
 firms or other parties covered in the Register maintained under section
 301 of the Companies Act, 1956. Consequently, the requirements of
 Clause (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
 applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is generally adequate internal control system
 commensurate with the size of the Company and the nature of its
 business with regard to the purchase of inventory and fixed assets and
 for the sale of goods.  During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control system.
 
 5.  In respect of contracts or arrangements referred to in section 301
 of the Companies Act, 1956:
 
 (a) On the basis of the audit procedures applied by us, and according
 to the information and explanations given to us on our enquiries on
 this behalf and the records produced to us for our verification, the
 contracts or arrangements that need to be entered into the register
 required to be maintained under section 301 of the Companies Act, 1956
 have been so entered;
 
 (b) The transactions so entered, aggregating in excess of Rs 5,00,000/-
 in respect of each party during the year, have been, in our opinion, as
 per the information and explanation given to us, made at prices, which
 are reasonable having regard to the prevailing market prices available
 at which transactions for similar goods have been made with other
 parties at the relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by the
 provisions of section 58A, 58AA or any other relevant provisions of the
 Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
 1975 with regard to the deposits accepted from the public.  According
 to the information and explanations given to us, no order has been
 passed by the Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any court or any other Tribunal.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business;
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 in respect of Company''s products to which the said rules are
 made applicable and are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have, however,
 not made a detailed examination of the records with a view to determine
 whether they are accurate;
 
 9.  In respect of statutory dues:
 
 (a) According to the records of the Company, the Company has been
 generally regular in depositing with statutory authorities, undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employees State Insurance, Income tax, Sales tax,
 Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other
 material statutory dues applicable to it. According to the information
 and explanations given to us, no undisputed amounts payable in respect
 of Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise
 duty and Cess were outstanding, at the year end for a period of more
 than six months from the date they became payable.
 
 (b) On the basis of our examination of the documents and records of the
 Company and the information and explanations given to us upon our
 inquiries in this regard, there were no disputed amounts payable in
 respect of Income tax, Sales tax, Wealth tax, Service tax, Customs
 Duty, Excise Duty and Cess and not deposited with the appropriate
 authorities other than those stated hereunder:
 
 Name of the          Nature of Dues         Amount        
 Statute                                  (Rsin crores)
 
 Central Sales        Sales Tax, VAT          3.36
 Tax Act/VAT          and Entry Tax
 Act of various
 states
 
                                              4.13
                                              0.69
 
 Central Excise       Excise and              7.14
 Act, 1944            Service Tax
 
                                             23.78
 
                                              0.11
 
                      Total                  39.21
 
 
 
 Name of the statute         Period for              Forum where
                             which amount            dispute is
                             relates                 pending
 
 Central sales               Various years from      Deputy/ Joint
 Tax Act/VAT                 1997-98 to 2010-11      Commissioner/
 Act of various                                      Commissioner
 States                                              (Appeals)
 
                             Various years from      Sales Tax Appellate
 
                             1982-83 to 2010-11      Tribunal
 
                             Various years           High Court
                             from 1989-90
                             to 2006-07
 
 Central Excise              Various years from      Commissioner of 
                                                     Central
 Act,1944                    1981-82 to 2010-11      Excise (Appeals)
 
                             Various years from      Central Excise 
                                                     and Service
 
                             1981-82 to 2009-10      Tax Appellate 
                                                     Tribunal
 
                             1993-94 & 2007-08       High Court
 
 10.  The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses in the financial year
 and in the immediately preceding financial year.
 
 11.  Based on the information and explanations given by the management,
 we are of the opinion that the Company has not defaulted in repayment
 of dues to financial institutions, banks and debenture holders.
 
 12.  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.  In our opinion, 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, (as amended) are not
 applicable to the Company.
 
 14.  The Company has maintained proper records of the transactions and
 contracts in respect of dealing or trading in shares, securities,
 debentures and other investments and timely entries have been made
 therein. All shares, securities, debentures and other investments have
 been held by the Company in its own name.
 
 15.  The Company has given guarantee for loans taken by its three
 subsidiary companies from banks; the terms and conditions whereof in
 our opinion and as per the information and explanations given to us are
 not prima facie prejudicial to the interest of the Company.
 
 16.  Based on the information and explanations given to us, the term
 loans were applied for the purpose for which the loans were obtained.
 
 17.  According to the information and explanations given to us and on
 overall examination of the balance sheet of the Company, we report that
 no funds raised on short-term basis have been used for long-term
 investment.
 
 18.  The Company has not made any preferential allotment of shares to
 companies/ firms/parties covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 19.  In our opinion and according to the information and explanations
 given to us, the Company has not issued any secured debentures during
 the year covered by our report.  Accordingly, provisions of clause
 (xix) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                  For and on behalf of
 
                                                   CHATURVEDI AND SHAH
 
                                         Firm Registration No. 101720W
                                                 Chartered Accountants
 
                                                       Amit Chaturvedi
 
                                                               Partner
                                                 Membership No. 103141
 Mumbai,
 November 23, 2011