1.  We have audited the attached Balance Sheet of Brushman (India)
 Limited as at March 31, 2009 and also the Profit and 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 disclosure in the financial
 statement. 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.
 
 3.  As required by Companies (Auditors Report) Order, 2003 issued by
 the Central Government in terms of Sub Section (4A) of section 227 of
 the Companies Act, 1956, we annex hereto a statement on the matters
 specified in paragraphs 4 and 5 of the said order.
 
 4.  We report and invite attention towards:
 
 (a) Capital work in progress includes an advance of Rs.50,33 crores
 given to Mr. Rajinder Singh for the purchase of moulds, plant &
 machinery etc. out of the proceeds of Foreign Currency Convertible
 Bonds (FCCB) and Global Depository Receipts (GDR). As per the
 information, records and explanations given to us, the company has not
 received the aforesaid capital items and the company has sought for the
 refund of such advance from Sir. Rajinder Singh. (Refer Note No..25 of
 Schedule 22).
 
 (b) That the company has incurred Rs. 17.28 crores on account of issue
 of Foreign Currency Convertible Bonds (FCCB) and Global Depository
 Receipts (GDR) which are in excess of the limits prescribed by the
 statutory authorities.
 
 (c) That the balances of Sundry Debtors, Sundry Creditors, loans and
 advances, Unsecured Loan from others, Security Deposits are subject to
 confirmation with the respective parties. The consequential impact
 thereof due to adjustments, provisions etc. on the financial statements
 is not ascertainable.
 
 (d) That the company has not filled the returns with the statutory
 authorities for External Commercial Borrowings (ECBs) and also
 statutory returns for sales tax, VAT, Service tax for part of the year.
 The consequential impact thereof due to penalty etc. on the financial
 statements is not ascertainable.
 
 (e) That the company is not regular in deposit of statutory dues of
 Income Tax, TDS, Provident Fund, ESI etc. with statutory authorities.
 The interest and penalties (if any) on account of delay in payments
 have not been provided in the accounts and is not ascertainable. To the
 extent the loss for the year is understated.
 
 5, Further to our comments in the annexure referred to in paragraph (3)
 and (4) 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 the
 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 comply with the Accounting
 Standards referred to in sub-section (3C) of section 211 of the
 Companies Act 1956 except as stated in paragraph 4 above.
 
 (e) On the basis of the written representations received from the
 Directors, as on March 31, 2009, and taken on record by the Board of
 Directors, we report that none of the Directors of the Company are
 disqualified as on March 31,2009 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 with the notes on
 accounts give the information required by the Companies Act, 1956, in
 the manner so required and subject to our observation in paragraph 4
 and 5 above, the cumulative impact of the same on the accounts are not
 ascertainable gives a true and fair view in conformity with the
 accounting principles generally accepted in India;
 
 (i) in case of the Balance Sheet, of the state of affairs of the
 Company as at March 31,2009;
 
 (ii) in case of the Profit and Loss Account, of the loss of the Company
 for the year ended on that date, and
 
 (iii) in case of the Cash Flow Statement, of the cash flows of the
 company for the year ended on that date.
 
 Annexure to Auditors Report Referred to in paragraph 3 of our Report
 of even date on the financial statements for the year ended 31st March
 2009 of Brushman (India) Limited
 
 (i) (a) The company has generally maintained proper records showing
 relevant particulars including quantitative details and situation of
 fixed assets.
 
 (b)We have been informed that the fixed assets of the company have been
 physically verified by the management during the year in a phased
 periodical manner which in our opinion is reasonable. As informed no
 material discrepancies were noticed on such verification.
 
 (c) Assets disposed off during the year are not substantial and
 therefore does not affect the going concern assumption.
 
 (ii) (a)We have been informed that the inventories have been physically
 verified by the management at the end of the year. In our opinion the
 frequency of verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 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)ln our opinion the Company is maintaining proper records of
 inventories. It has been informed to us that there were no material
 discrepancies noticed on physical verification of inventory as compared
 to the book records.
 
 (iii)(a)In our opinion and according to the information and
 explanations given to us, the Company has not granted any loan, secured
 or unsecured to parties covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (b) In our opinion and according to the information and explanations
 given to us, the Company has taken unsecured loan from the parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956 amounting to Rs.49.50 Lacs and the year end balance thereof
 is Rs.32.21 Lacs. As per information and explanation given to us the
 loan is repayable on demand and has not been demanded back by the
 lenders and therefore there is no overdue of loan. It was further
 explained that the loan is interest free and is not prejudicial to the
 interest of the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, the existing internal control procedures for the purchase
 of inventory, fixed assets and for the sale of goods and services needs
 to be strengthened to commensurate with the size of the Company and the
 nature of its business.
 
 (v) In respect of particulars of contracts or arrangements referred to
 in section 301 of the Companies Act, 1956;
 
 (a)In our opinion and according to the information and explanations
 given to us, particulars of such contracts or arrangements which were
 required 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, these contracts or arrangements have been generally made
 at prevailing market prices at the relevant time.
 
 (vi) In our opinion and according to the information and explanations
 given to us the Company has not accepted any deposits from the public.
 
 (vii) The internal audit of the company is being conducted by engaging
 an outside agency i.e.  a Chartered Accountants firm. However
 considering the size and nature of the business, the scope of internal
 audit needs to be extended.
 
 (viii) We have been informed that the Central Government has not
 prescribed the maintenance of Cost Records under Section 209 (l)(d) of
 the Companies Act, 1956 in respect of the Company.
 
 (ix) (a) According to the records, information and explanations
 provided to us, the company is not regular in depositing with
 appropriate 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 statutory dues applicable to it.
 According to the information and explanations given to us, fallowings
 are the undisputed amounts payable in respect of these statutory dues
 in arrears as at march 31, 2009 for a period of more than six months
 from the date they became payable: -
 
 S. 
 No.  Particulars                      Amount Rs. in Lacs
 
 1.   Employees State Insurance               0.52
 
 2.   Professional Tax                        0.24
 
 3.   Provident Fund                          5.39
 
 4.   Tax Deduction at Source                52.17
 
 5.   Income Tax                            161.87
 
 6.   Fringe Benefit Tax                     26.33
 
      Total                                 246.52
 
 (b) As per the information and explanations given to us there are no
 disputed statutory dues.
 
 (x) The Company has accumulated losses and has incurred cash losses
 during the financial year covered by our audit. However it has not
 incurred any cash losses in the immediately preceding financial year.
 
 (xi) Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the Company has
 defaulted in repayment of dues to financial institutions and banks
 towards term loan and working loans. There are no debentures and
 therefore there is no question of default thereon. However in absence
 of relevant information we are unable to comment on the amount and
 period of default.
 
 (xii) In our opinion and according to the information and explanations
 given to us, no loans and advances have been granted by the Company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi/ mutual benefit
 fund/ society. Therefore, clause 4 (xiii) of the Companies (Auditors
 Report) Order 2003 is not applicable to the Company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company is not dealing or trading in shares,
 securities, debentures & other investments.
 
 (xv) The Company has given guarantee amounting Rs. 550 Lacs (previous
 year Rs. 175 Lacs) for loan taken by its subsidiary companies from
 banks. In our opinion and according to the information and explanations
 given to us, the terms and conditions of the same are not prima facie
 prejudicial to the interest of the company,
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans were applied for the purposes for which
 they were raised.
 
 (xvii) According to the information and explanations given to us and on
 the basis of an overall examination of the Balance Sheet of the
 Company, we are of the opinion that the funds raised on short term
 basis have, prima facie, not been used for long term investment.
 
 (xviii) According to the information and explanations given to us,
 during the year, 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.
 
 (xix) The Company has not issued any debentures; hence question of
 creation of security or charge in respect of debentures issued does not
 arise.
 
 (xx) During the year the Company has raised money by public issues
 through Global Depository Receipts (GDRs) and Foreign Currency
 Convertible Bonds (FCCBs) for which the management has disclosed the
 end use in the notes to accounts and the same has been verified.
 
 (xxi) In our opinion and according to the information and explanations
 given to us, no fraud on or by the Company has been noticed or reported
 during the year.
 
                                             For SAXENA & SAXENA
                                           Chartered Accountants
 
 Place: - New Delhi
 Date: - 1st September 2009
 
                                                    D. K. Saxena
                                                         Partner
                                                    M. No. 82118