1.  We have audited the attached Balance Sheet of Bhansali Engineering
 Polymers Limited as at 31 st March, 2012, the Profit and Loss Account
 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.
 
 2.  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 test basis evidence supporting the amounts and
 disclosures in the financial statement. 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.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government of India in terms of Section 227(4A) of the
 Companies Act, 1956 (hereinafter referred to as the Act), we enclose in
 the Annexure a statement on the matters specified in paragraphs 4 & 5
 of the said Order.
 
 4 Further to our comments in the Annexure referred to in paragraph 3
 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 those
 books;
 
 c) The Balance Sheet, Profit and Loss Account and Cash Flow statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report are in compliance with the
 Accounting Standards referred to in Section 211(3C) of the Companies
 Act, 1956.
 
 e) On the basis of written representations received from the Directors
 as on 31 st March, 2012 and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31 st March,
 2012 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, they said accounts read together with
 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;
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 st March, 2012;
 
 ii.  in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii. in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 For and on behalf of B. L. Dasharda & Associates Chartered Accountants
 F.R. No. 112615W Sushant Mehta Partner Membership No. : 112489 Place :
 Mumbai Dated : 29th May, 2012
 
 Statement referred to in paragraph 3 of our report of even date on the
 accounts for the year ended 31st March, 2012 of Bhansali Engineering
 Polymers Limited.
 
 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 during the year in a phased periodical
 manner which, in our opinion, is reasonable having regards to the size
 of the company and the nature of its assets. As informed to us no
 material discrepancies were noticed on such verification.
 
 c) No substantial part of fixed assets has been disposed off during the
 year, which has bearing on the going concern assumption.
 
 2.  a) The stocks of finished goods, raw materials, work-in-process and
 stores and spares of the Company have been physically verified by the
 management during the year.
 
 b) The procedures of physical verification of the above stocks followed
 by the management are reasonable and adequate in relation to the size
 of the Company and nature of its business.
 
 c) The Company is maintaining proper records of inventory. As explained
 to us, the discrepancies between the physical stocks and the book
 stocks were not material and have been properly dealt with in the books
 of account.
 
 3.  As informed to us, 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 the Companies Act, 1956.
 Consequently, requirements of clauses (iii.b) to (iii.d) of paragraph 4
 of the Order are not applicable and hence not commented upon.
 
 4.  As informed to us , the company has not taken any loans, secured or
 unsecured, from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956.
 Consequently, requirements of clauses 4(iii.e) to (iii.g) of paragraph
 4 of the Order are not applicable and hence not commented upon.
 
 5.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory, 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 systems.
 
 6 a) According to the information and explanations given to us, we are
 of the opinion that the particulars of contracts or arrangements that
 needs to be entered in 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 contract or
 arrangement and exceeding the value of Rupees Five Lacs have been made
 at prices, which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 7.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by the
 Reserve Bank of India and the provisions of sections 58A, 58AA or any
 other relevant provisions of the Companies Act, 1956 and the rules
 framed there under to the extent applicable with regards to the deposit
 accepted from the public.
 
 8.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of business.
 
 9.  On the basis of the records produced, we are of the opinion that,
 prima facie, the cost records and accounts prescribed by the Central
 Government u/s 209(1) (d) of the Companies Act,1956 have been
 maintained by the Company. However, we are not required to carry out
 and have not carried out any detailed examination of such accounts and
 records.
 
 10.  a) In our opinion and according to the information and
 explanations given to us, undisputed statutory dues
 
 including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom
 Duty, Excise Duty, Cess, Service Tax and any other statutory dues have
 been generally regularly deposited in time with the appropriate
 authorities and there are no undisputed statutory dues payable at the
 year end for a period of more than six months from the date they became
 payable.
 
 b) In our opinion and according to the information and explanations
 given to us, there are no dues outstanding in respect of Income Tax,
 Wealth Tax , Sales Tax, Custom Duty, Excise Duty and Service Tax on
 account of any dispute other than the following:-
 
 
                 Nature of the    Amount    Year to which 
                                            the             Forum where
                                                            Dispute
 Name of the 
 Statute         Dues            (Rs.in
                                  lacs)     amount
                                            relates         is Pending
 
 The Central 
 Excise Act, 
 1944            Service Tax                2006-2007       Assistant  
                                                            Commissioner
                                   120 0                   (Chhindwara)
 
 The Income 
 Tax Act,1961    Income Tax        240.51   2006-2007       
                                            and             Income Tax
                                                            Appellate 
                                            2007-2008       Tribunal
 
 Customs Act     Custom Duty       295.78   2005            Deputy
                                                            Commissioner
                                                            of Customs
 
 11.  The Company does not have accumulated losses as at the end of the
 financial year and has not incurred cash losses in the current
 financial year and in the immediately preceding financial year.
 
 12.  Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of any dues to financial institutions or
 banks.
 
 13.  According to the information and explanations given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 14.  In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society, therefore, the clause 4
 
 (xiii) of the Order is not applicable to the Company.
 
 15.  In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.
 
 16.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantees for loans taken
 by others from banks or financial institutions.
 
 17.  In our opinion and according to the information and explanations
 given to us, the company has not raised any term loans during the year.
 
 18.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we are of
 the opinion that no funds raised on short term basis have been used for
 long term investment.
 
 19.  The Company has not made any preferential allotment of shares
 during the year to any parties or companies covered in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 20.  The Company has not issued any debentures during the year.
 
 21.  The Company has not raised any money through a public issue during
 the year. Accordingly, the provisions of clause 4 (xx) of the order are
 not applicable to the company.
 
 22.  According to the information and explanation given to us, During
 the year one of the employee of company has committed fraud of Rs. 464.02
 lacs by way of embezzlement of goods . The company has initiated legal
 action against the employee and terminated the services of the
 employee. The company has been able to recover Rs. 251.03 lacs till date.
 The management has taken adequate steps to improve the internal control
 procedures to prevent such instances of fraud in future by formulating
 centralized policies and by periodic audits. We have not come across
 any other such instances of fraud on or by the company.
 
                                                    For and on behalf of 
 
                                            B.  L. Dasharda & Associates 
 
                                                   Chartered Accountants
 
                                                        F.R. No. 112615W 
 
                                                           Sushant Mehta 
 
 Place : Mumbai                                                  Partner
 
 Dated : 29th May, 2012                          Membership No. : 112489