1.  We have audited the attached Balance Sheet of Cummins India Limited
 (the Company) as at March 31, 2012, and the related Statement of
 Profit and Loss and Cash Flow Statement for the year ended on that date
 annexed thereto, which we have signed under reference to this report.
 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 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 (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 (together the Order), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of ''The Companies Act, 1956''
 of India (the ''Act'') and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the 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, Statement of Profit and Loss and Cash Flow
 Statement dealt with by 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 dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 (e) On the basis of written representations received from the
 directors, as on March 31, 2012 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, 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 March 31, 2012; 
 
 (ii) in the case of the Statement of Profit and Loss, of the profit for
 the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 Annexure to Auditors'' Report
 
 Referred to in paragraph 3 of the Auditors'' Report of even date to the
 members of Cummins India Limited on the financial statements as of and
 for the year ended March 31, 2012
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover all the items over a
 period of two years which, in our opinion, is reasonable having regard
 to the size of the Company and the nature of its assets. Pursuant to
 the programme, a portion of the fixed assets has been physically
 verified by the Management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion, and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties) has been
 physically verified by the Management during the year.
 
 In respect of inventory lying with third parties, these have
 substantially been confirmed by them. In our opinion, the frequency of
 verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification 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) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) 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 Act. Accordingly, clauses (iii) (b) to (iii)
 (d) of paragraph 4 of the Order are not applicable to the Company for
 the current year.
 
 (b) 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 Act. Accordingly, clauses (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable to the Company
 for the current year.
 
 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 for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, no major weaknesses have been noticed or
 reported.
 
 5.  According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year to be entered in the register required to be
 maintained under that Section.  Accordingly, the question of commenting
 on transactions made in pursuance of such contracts or arrangements
 does not arise.
 
 6.  In our opinion, and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Act and the
 ''Companies (Acceptance of Deposits) Rules, 1975'' with regard to the
 deposits accepted from the public. According to the information and
 explanations given to us, no order has been passed by the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 Court or any other Tribunal on the Company in respect of the aforesaid
 deposits.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause
 
 (d) of sub-section (1) of Section 209 of the Act, and are of the
 opinion that, prima facie, the prescribed accounts and records have
 been made and maintained. We have not, however, made a detailed
 examination of the records with a view to determine whether they are
 accurate or complete.
 
 9. (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing undisputed statutory dues, including provident
 fund, investor education and protection fund, employees'' state
 insurance, income tax, wealth tax, service tax, customs duty, excise
 duty and other material statutory dues, as applicable, with the
 appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income tax, sales tax, customs duty and excise duty as at March 31,
 2012 which have not been deposited on account of a dispute are as
 follows:
 
 Name of the statute    Nature of d ues                  Amount
                                                        (Rs. in Lacs)
 
 The Income Tax Act,    Demand on account of             2,895
 1961                   transfer pricing adjustments,
                        other disallowances and
                        interest thereon
 
 The Maharashtra        Demand on account of             155
 Sales Tax on           Purchase tax/ Works
 Transfer of Property   contract tax and surcharge
 in goods involved in   thereon
 the Execution of
 Works Contract
 (Re-enacted) Act,
 1989
 
 The Central Sales      Taxation of sales turnover       5,203
 Tax Act, 1956/         under B.S.T. Act and
 Bombay Sales Tax       disallowance of claim of
 Act, 1959 (B.S.T.)/    VAT set-off, and inter-state
 Maharashtra Value      sale u/s 3(a) of C.S.T. Act,
 Added Tax Act, 2002    1956
 
 VAT Act, 2002          Additional Demand on             30
                        account of non-receipt of ''C''
                        forms
 
 The Central Sales      Disallowances of Sales Tax       323
 Tax Act, 1956          Declaration forms,
 (C.S.T.)/Bombay        disallowances of set off
 Sales Tax Act, 1959    claimed under rule 41D and
 (B.S.T.)               42H and interest thereon
 
 The Customs Act,       Demand due to erroneous          2,213
 1962                   claim of duty drawback
                       (excluding interest, as
                        applicable)
 
 The Central Excise     Disallowance of credit taken     14
 Act, 1944              on inputs
 
 
 
 
 Name of the staute     Financial Year to      Forum where the
                        which the amount       dispute is pending
                        relates
 
 The Income Tax Act,    2006-2007              Income-tax Appellate
 1961                                          Tribunal, Pune
 
 The Maharashtra        1999-2000              High Court, Mumbai
 Sales Tax On
 Transfer of property
 in goods involved in
 the Execution of
 Works Contract
 (Re-enacted) Act,
 1989
 
 
 The Central Sales      2002-2003 to           Joint Commissioner
 Tax Act,1956/          2006-2007              of Sales Tax (Appeal)
 Bombay Sales Tax                              / Sr Deputy
 Act,1959 (B.S.T.)/                            Commissioner of
 Maharashtra Value                             Sales Tax (Appeals)
 Added Tax Act,2002                            – Pune
 
 
 
 VAT Act,2002           2005-2006              Deputy
                                               Commissioner of
                                               Sales Tax (Appeals)
 
 The Central Sales      1999-2000 to           Maharashtra Sales
 Tax Act,1956           2001-2002              Tax Tribunal, Mumbai
 (C.S.T)/Bombay
 Sales Tax Act,1959
 (B.S.T.)
 
 
 The Customs Act,       2005-2006 to           The Commissioner of
                        2008-2009              Customs (Appeals),
                                               Panaji, Goa
 
 The Central Excise     2004-2005              Central Excise and
 Act,1944                                      Service Tax Appelate
                                               Tribunal (Mumbai/
                                               Ahmedabad)
 
 10.  The Company has no accumulated losses.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12.  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.  The provisions of any special statute applicable to chit fund/
 nidhi/ mutual benefit fund/ societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion, and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  The Company has not obtained any term loans.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion, and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures during the year; and
 does not have any debentures outstanding as at the year end.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of any such case by the Management.
 
                                                  For Price Waterhouse
 
                                     Firm Registration Number: 301112E
 
                                                 Chartered Accountants
 
                                                 Jeetendra Mirchandani
 Pune                                                          Partner
 
 May 15, 2012                                 Membership Number: 48125