1.  We have audited the attached Balance Sheet of CMI LIMITED as at 31st
 March, 2012 together with the Profit and Loss Account and the Cash Flow
 Statement for the year ended as 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.
 
 2.  We conducted our audit in accordance with the Accounting 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 misstatements. 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 the management, as well as evaluating the overall financial
 statement presentation. We believe that bur 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 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.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:-
 
 i) 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;
 
 ii) 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 ;
 
 iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of accounts ;
 
 iv) 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 in so far as they apply to the Company;
 
 v) On the basis of written representations received from the directors,
 as on 31st March 2012 and taken on record by the Board of Directors, we
 report that none of the Directors are disqualified as on 31st 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;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with significant
 accounting policies & 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 31st March, 2012;
 
 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 the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 Annexure referred to in Paragraph 3 of the Auditors'' Report of even
 date to the Members of CMI Limited on the financial statement for the
 year ended 31 March, 2012.
 
 i) 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 assets have been physically verified by
 the management during the year and no material discrepancies were
 noticed on such verification.
 
 c) In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year and going concern status of the Company is
 not effected.
 
 ii) a) The stock of inventory has been physically verified, during the
 year, by the management of the Company.  In our opinion, the frequency
 of verification is reasonable.
 
 b) 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) On the basis of examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material and were properly dealt with in the
 books of account.
 
 iii) a) As per information and explanation given to us, the Company has
 not granted loans to companies, firms or other parties covered under
 Section 301 of the Companies, Act, 1956.
 
 b) As per information & explanation given to us, the Company has taken
 unsecured loans from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956, and
 the details are as follows: -
 
 No. of Parties - 2
 
 The maximum amount involved during the year - Rs. 625.05 Lacs
 
 Year-end balance - Rs. 590.00 Lacs
 
 c) The Terms and Conditions of unsecured loans taken from Companies,
 firms or other parties are not prima facie prejudicial to the interest
 of the Company.
 
 d) As per the explanation and information given to us, the Company has
 paid interest on the loans at prevailing market rates.
 
 e) As per the information and explanation provided to us, the Company
 is repaying principal as per stipulation and there is no overdue
 amount.
 
 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 sale of
 goods on the basis of examination of books of accounts and records of
 the Company and according to the information and explanation given to
 us, we have neither come across nor informed of any major weakness in
 the Internal Control system during the course of our audit.
 
 v) a) According to the information and explanations given to us, we are
 of the opinion that transactions that need 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, the transactions made in pursuance to contracts or
 arrangement entered in the register maintained under Section 301 of the
 Companies Act, 1956 and exceeding the value of Rs. 5, 00,000/- (Rupees
 Five Lacs) in respect of any party during the year have been made at
 prices which are reasonable having regard to the 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 deposit as per the
 provisions of Section 58A and 58AA of the Companies Act, 1956 and the
 Companies (Acceptance of Deposit) Rules 1975.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii) We have broadly reviewed the Cost Accounting records maintained
 by the Company in respect of manufacturing of cables pursuant to the
 order made by the Central Government for maintenance of cost accounting
 records under Section 209 (1) (d) of the Companies Act, 1956 and we are
 of the opinion that prima-facie prescribed records have been made and
 maintained.
 
 ix) a) According to the records of the Company, the Company is
 generally regular in depositing with the appropriate authorities the
 undisputed statutory dues including Provident Fund, Investor Education
 & Protection Fund, Employees'' State Insurance, Excise Duty, Cess,
 Service Tax, Custom Duty and other material statutory dues applicable
 to it.
 
 b) According to the information and explanation given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance, income tax,
 wealth tax, service tax, sales-tax,
 
 custom duty, excise duty, cess and other undisputed statutory dues were
 generally outstanding, at the year end, for a period of more than six
 months from the date they became payable except Central Sales Tax Rs.
 98,85,913/- and VAT Rs. 14,38,821/-.
 
 c) According to the information and explanation given to us, there are
 no dues in respect of income tax, wealth tax, service tax, custom duty
 and cess which have not been deposited on account of any dispute.
 
 d) In our opinion, the accumulated losses of the company are not more
 than fifty percent of its net worth. The company has not incurred cash
 losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 e) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to any bank. The Company
 has no outstanding dues in respect of a financial institution or
 debenture holders.
 
 f) As per the information and explanation given to us, we are of the
 opinion that the Company has not granted loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities during the year.
 
 g) In our opinion, the Company is not a chit fund or Nidhi Mutual
 benefit fund/ society. Therefore the provisions of clause 4(xiii) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 h) In our opinion, the Company is not dealing in or trading in shares,
 securities, debentures and other investment. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 i) The company has given guarantees for loans taken by others from
 banks and financial institutions. According to the information and
 explanations given to us, we are of the opinion that the terms and
 conditions thereof are not prima facie prejudicial to the interest of
 the Company.
 
 j) As per information and explanation given to us, the Company has not
 raised any new term loans during the year. The balance of earlier
 raised term loans as on .  31M March 2012 is 16.16 Lacs.
 
 k) According to the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, we report that
 the funds raised on short-term basis have not been used to finance any
 long-term investment.
 
 1) According to the information and explanations given to us, the
 Company has made preferential allotment of shares to parties and
 Companies covered in the register maintained under Section 301 of the
 Act.
 
 m)The Company has not issued any debentures.
 
 n) The Company has not raised any moneys by public issues during the
 year.
 
 o) According to the information and explanations given to us, no fraud
 on or by the Company has been noticed or reported during the course of
 our audit.
 
                                     FOR J. K. MANOCHA & ASSOCIATES 
 
                                     CHARTERED ACCOUNTANTS
 
 PLACE: DELHI                        J.K. MANOCHA
 
 DATE: 30th MAY, 2012                PROPRIETOR