We have audited the attached Balance Sheet of CHEVIOT COMPANY LIMITED
 as at 31st March, 2012 and the related Statement of Profit and Loss and
 the Cash Flow Statement 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 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 the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 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 specified in paragraphs 4 and 5 of the said
 order to the extent applicable.
 
 2.  Further to our comments in the Annexure referred to in Paragraph 1
 above, we state 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, Statement of Profit and Loss and Cash Flow
 Statement referred to in this report are in agreement with the books of
 account;
 
 d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement of the Company comply with the Accounting Standards
 referred to in sub-section (3C) of Section 211 of the Companies Act,
 1956;
 
 e) On the basis of representations received from the directors of the
 Company, we report that no director is disqualified from being
 appointed as a director of the Company under clause (g) of sub-section
 (1) of Section 274 of the Companies Act, 1956; and
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read in conjunction
 with notes thereon give the information required by the Companies Act,
 1956, in the 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 31st March, 2012.
 
 ii.  In the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date.
 
 iii. In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 1.  a) The Company has maintained proper records showing full
 particulars including quantitative details and location of the fixed
 assets.
 
 b) There is a regular program of physical verification, which in our
 opinion is reasonable, having regard to the size of the Company and the
 nature of fixed assets. No material discrepancies have been noticed in
 respect of the assets physically verified during the year.
 
 c) The Company has not disposed off substantial part of fixed assets
 during the year.
 
 2.  a) Inventories have been physically verified during the year by the
 management. In our opinion, the frequency of verification is
 reasonable.
 
 b) The procedures of physical verification of stocks followed by the
 management are adequate in relation to the size of the Company and the
 nature of its business.
 
 c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 book records were not material and have been properly dealt with in the
 books of account.
 
 3.  The Company has not accepted/granted any loans during the year
 from/to the parties covered in the register maintained under section
 301 of the Companies Act, 1956. Accordingly the provisions of clauses
 (iii) (b), (c), (d), (f) and (g) are not applicable to the Company.
 
 4.  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 and fixed assets and for the sale of goods.
 During the course of our audit, no major weakness was noticed in the
 internal control system.
 
 5.  a) According to the information and explanations given to us,
 contracts or arrangements that need to be entered into the register
 maintained in pursuance of section 301 of the Companies Act, 1956 have
 been so entered.
 
 b) The transactions made in pursuance of such contracts or arrangements
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public during
 the year.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  On the basis of records produced, we are of the opinion that, prima
 facie, the cost records and accounts prescribed by the Central
 Government under Section 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.
 
 9.  a) According to the information and explanations given to us and
 the records examined by us, the Company is regular in depositing
 undisputed statutory dues including Provident Fund, Investor Education
 and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Custom Duty, Cess and other statutory dues
 with the appropriate authorities and there are no undisputed statutory
 dues outstanding as at 31st March, 2012, for a period of more than six
 months from the date they became payable.
 
                                                           
 
 b) According to the records of the Company, the following dues are not
 deposited on account of disputes pending at various forums :
 
 Name of the 
 Statute          Nature of dues Amount  Year to              Forum where
                                         which amount         dispute is 
                                         relates              pending
 
 Sales Tax Act    Sales Tax       1.05       1984-85      Reference Level
 
                                  0.22       1993-94      Revision Level
 
                                  1.12       1997-98      Revision Level
 
                                 76.77       2005-06      Appeal Level
 
                                 65.05       2006-07      Appeal Level
 
                                  2.84       2008-09      Appeal Level
 
 Income Tax Act   Income Tax    115.68       2002-03      Assessing Officer
 
                                  6.63       2007-08      Assessing Officer
 
                                 24.88       2009-10      Assessing Officer 
 
                          TOTAL 294.24
 
 
 
 10.  The Company has not incurred cash loss in the current year and in
 the immediately preceding financial year and there are no accumulated
 losses in the Balance Sheet as on 31st March, 2012.
 
 11.  Based on the information and explanations given to us, the Company
 has not defaulted during the year in repayment of dues to any financial
 institutions or banks.
 
 12.  Based on our examination of the records and 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.
 
 13.  As the Company is not a chit fund, nidhi, mutual benefit fund or
 society the provisions of clause 4(xiii) of the Companies (Auditor''s
 Report) Order, 2003 are not applicable to the Company.
 
 14.  As the Company is not dealing or trading in shares, securities,
 debentures and other investments, the provisions of clause 4(xiv) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 15.  According to the information and explanations received, the
 Company has not given any guarantees for loans taken by others from
 bank or financial institutions.
 
 16.  According to the information and explanations received, the term
 loan was applied for the purpose for which the loans were obtained.
 
 17.  Based on our examination of the records and according to the
 information and explanations received, the Company has not applied
 short term borrowings for long term use.
 
 18.  The Company has not made any preferential allotment of shares
 during the year.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  As per the information and explanation given to us, no fraud on or
 by the Company has been noticed during the year.
 
                                                          For Jain & Co.
 
                                                   Chartered Accountants
 
                                                Registration No. 302023E
 
 P-21/22, Radhabazar Street,                               CA P. K. JAIN
 
 Kolkata - 700 001                                               Partner
 
 Dated the 30th day of May, 2012                    Membership No. 52018