1.  We have audited the attached Balance Sheet of BRIGADE ENTERPRISES
 LIMITED, as at 31st March, 2011 and also the Profit & Loss Account and
 the Cash Flow Statement for the year ended on that date annexed
 thereto. These financial statements are the responsibility of the
 Companys 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 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.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, issued
 by the Central Government of India, in terms of Sub-section (4A) of
 Section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specifed in paragraphs 4 and 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 purpose of our
 audit.
 
 b) In our opinion, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of such
 books.
 
 c) The Balance Sheet and Profit & 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 this report, comply with the Accounting
 Standards referred to in Sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) On the basis of written representations received from the Directors
 and taken on record by the Board of Directors, we report that none of
 the Directors of the company are disqualifed as on 31st March, 2011
 from being appointed as Directors of the company under clause (g) of
 sub section (1) of Section 274 of Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the accounts together with the notes
 thereon give the information required under 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 Balance Sheet, of the state of affairs of the company
 as at 31st March, 2011.
 
 ii) In the case of Profit and Loss account, of the Profit for the year
 ended on that date.
 
 iii) In the case of Cash Flow Statement, of the Cash flows for the year
 ended on that date.
 
 Annexure to Auditors Report
 
 Annexure referred to in paragraph 3 of the Auditors Report to the
 members of Brigade Enterprises Limited on the accounts for the period
 ended 31st March 2011.  
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of Fixed
 Assets.
 
 (b) All the fixed assets have been physically verifed by the management
 during the period and no material discrepancies were noticed on such
 verifcation.
 
 (c) During the period, the company has not disposed off any substantial
 part of its Fixed Assets that would affect the Going Concern assumption
 of the Company.
 
 (ii) (a) The Inventory has been physically verifed at reasonable
 intervals during the period by the management. In our opinion, the
 frequency of verif- cation is reasonable.
 
 (b) The procedures of physical verifcation of inventory followed by the
 management are 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 inventories. The
 discrepancies noticed on verif- cation between physical stock and book
 stock was not material.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has neither granted nor taken any loans, secured or
 unsecured from the companies, frms and other parties mentioned in the
 Register maintained under section 301 of the Companies Act, 1956.  (b)
 Since the company has neither granted nor taken any loans, the
 provisions of clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii)
 (f), (iii) (g), of the Order are not applicable to the company.
 
 (iv) In our opinion and according to the information and explanations
 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 inventory, fixed assets and for the
 sale of goods. During the course of audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 system.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions that need to be entered into a
 register in pursuance of 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 fve lakhs in
 respect of any party during the period have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) According to the information and explanations given to us, the
 company has not accepted deposits from public and hence the directives
 issued by the Reserve Bank of India and the provisions of Sections 58A
 and 58AA or any other relevant provi- sions of the Act and the rules
 framed there under, are not applicable to the company.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) According to the information and explanations given to us, the
 Central Government has not prescribed maintenance of cost records and
 hence the provision of clause 4(viii) is not applicable.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, the company is generally
 regular in depositing with appropriate authorities undisputed statutory
 dues including Employee Provident Fund, Employees State Insurance,
 Income-Tax, Sales- Tax, Service Tax, Wealth Tax, Custom Duty, Excise
 Duty, Cess and any other statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
 Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
 31.03.2011 for a period of more than six months from the date they
 became payable
 
 (c) According to the information and explanations given to us, the
 particulars of Income Tax, Value Added Tax and Service Tax as at 31st
 March 2011, which have not been deposited on account of a dispute
 pending are as under:
 
                                               Period to 
                                               which the   Forum where 
 Name of 
 the Statute   Nature of Dues   Amount (Rs)
                                            amount relates  dispute is 
                                                              pending
 
               Service Tax on               For the period 
                                                from        Customs, 
                                                            Excise and
 Service Tax      Import       Rs 96,99,396 April, 2003 to  Service Tax 
                                                            Appellate
               of Services                    March, 2008   Tribunal
 
                                                            Joint 
                                                            Commissioner
                                                            of 
                Additional 
                 turnover                    For the period 
                                                 April
 VAT                          Rs 10,08,26,571               Commercial 
                                                            Taxes 
                proposed                      2005 to March 
                                                  2008      (Appeals)
 
               Disallowance u/s              Assessment Year Income Tax 
                                                             Appellate 
 Income Tax Act                Rs 56,15,148
                   14A                          2008-09      Tribunal
 
 (x) In our opinion, the company has no accumulated losses and the
 company has not incurred cash losses during the financial period covered
 by our audit and the immediately preceding financial period.
 
 (xi) In our opinion, and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to a
 financial insti- tution or bank or debenture holders.
 
 (xii) In our opinion, the company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities. Hence, maintenance of records is not
 applicable.
 
 (xiii) In our opinion, the company is not a chit fund or nidhi mutual
 benefit fund / society and therefore, the provisions of clause 4(xiii)
 of the Order are not applicable to the company.
 
 (xiv) According to the information and explanations provided to us, the
 company is not dealing in or trading in shares, securities, debentures
 and other investments and accordingly, the provisions of clause 4(xiv)
 of the Order are not applicable to the company.
 
 (xv) According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from bank
 or financial insti- tution and accordingly provisions of clause 4(xv) of
 the Order are not applicable to the company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purpose for which they were raised.
 
 (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 funds raised on short-term basis have not been used for long-term
 investment.
 
 (xviii) According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 period to parties and companies covered in the Register maintained
 under Section 301 of the Act and therefore, the provisions of clause
 4(xviii) of the Order are not applicable to the company.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any debenture and therefore, the provisions of
 clause 4(xix) of the Order are not applicable to the company.
 
 (xx) In our opinion, in respect of the monies raised by the company by
 way of public issue during the year, the management has disclosed the
 end use of money raised by public issues as a part of Notes to Accounts
 and the same has been verifed.
 
 (xxi) We have been informed that an erstwhile junior level employee of
 the Company had embezzled funds amounting to Rs 147.58 Lakhs over a
 period from April 2007 to June 2009. The Companys internal
 investigation under the direct supervision of the Companys Audit
 Committee related to this embezzlement has been completed. We have also
 been informed that a sum of Rs 43.28 Lakhs has been recovered by this
 company on this account.
 
 
                                        for Narayanan, Patil and Ramesh 
 
                                        Chartered Accountants 
 
                                        Firm Regn No. 002395S
 
                                        Patil Udaya Kumar
 
                                        Partner
 
                                        Membership No: 200/25589
 
 Place: Bangalore
 
 Date: May 04, 2011