1.  We have audited the attached Balance Sheet of DCM SHRIRAM
 CONSOLIDATED LIMITED (the Company) as at March 31, 2012, the
 Statement of Profit and Loss and the Cash Flow Statement of the Company
 for the year ended on that date, both 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 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 the Companies (Auditor''s Report) Order, 2003
 (CARO) issued by the Central Government in terms of Section 227(4A) 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 in paragraph 3
 above, we report as follows:
 
 (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 it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 (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 loss of
 the Company for the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the 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 Section 274(1)(g) of the
 Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 Having regard to the nature of the Company''s business/ activities and
 results for the year, clauses (x), (xiii) and (xiv) of Companies
 (Auditor''s Report) Order, 2003 (hereinafter referred to as the Order)
 are not applicable.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of the fixed
 assets.
 
 (b) As explained to us, the Company has a programme of physically
 verifying all its fixed assets over a period of three years, which in
 our opinion is reasonable having regard to the size of the Company and
 nature of its fixed assets. In accordance with this programme, some of
 the fixed assets were physically verified by the management during the
 year. The discrepancies noticed on such verification between the
 physical balances and the fixed assets records were not material and
 have been properly dealt with in the books of account.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (ii) (a) As explained to us, the inventories were physically
 verified during the year by the Management at reasonable intervals
 except for inventory lying with third parties at the end of the year
 for which confirmations have been obtained in most of the cases.
 
 (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 were 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 records of inventories, we
 are of the opinion that, the Company is maintaining proper records of
 inventories. The discrepancies noticed on physical verification of
 inventories as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has, during the year, not granted any loan, secured or
 unsecured to companies, firms and other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956, other than
 unsecured loans aggregating Rs. 5.89 crores granted during the year to
 six wholly owned subsidiaries covered in the register maintained under
 Section 301 of the Companies Act, 1956.
 
 The maximum amount due during the year of above loans was Rs. 80.34
 crores and the year end balance of loans so granted was Rs. 77.64
 crores. These loans includes interest free loans aggregating Rs. 62.93
 crores made to two wholly owned subsidiaries, which, as explained to
 us, have been made for setting up new projects and making strategic
 investments in other subsidiaries.
 
 (b) In our opinion and according to the information and explanations
 given to us, after considering the purpose for which loans have been
 granted as indicated in paragraph 4(iii)(a) of the Companies
 (Auditor''s Report) Order, 2003 (hereinafter referred to as the
 Order), the rate of interest and other terms and conditions of the
 loans granted, are, prima-facie, not prejudicial to the interest of the
 Company.
 
 (c) According to the information and explanations given to us, the
 parties, to whom the loans have been granted by the Company, as
 referred to in paragraph 4(iii)(a) above, have been regular in
 repayment of principal amount as stipulated and have been regular in
 payment of interest where charged.
 
 (d) According to the information and explanations given to us, there
 are no overdue amounts in respect of the loans granted as referred to
 in paragraph 4(iii)(a) above and interest thereon where charged.
 
 (e) According to the information and explanations given to us, 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 Companies Act, 1956.  Accordingly, paragraph (iii)(f) and
 (g) of the Order are not applicable.
 
 (iv) 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 purchases of inventory and fixed assets and the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (v) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs.5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie 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 complied with the provisions of section
 58A, section 58AA or any other relevant provisions of the Companies
 Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, with
 regard to the deposits accepted from the public. As per information and
 explanations given to us, no order under the aforesaid sections 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.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by the Company and the firms of Chartered Accountants
 appointed by the Management have been commensurate with the size of the
 Company and the nature of its business.
 
 (viii) 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, the maintenance of cost records has been prescribed
 under section 209(1) (d) of the Companies Act, 1956 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 determining whether they are
 accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, the Company has generally
 been regular in depositing undisputed statutory dues including
 provident fund, investor education protection fund, employees'' state
 insurance, income-tax, sales tax, wealth tax, service tax, customs
 duty, excise duty, cess and other material statutory dues applicable to
 it. We are informed that there are no undisputed statutory dues as at
 the year end outstanding for a period of more than six months from the
 date they became payable.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no disputed dues of
 wealth tax, customs duty and cess matters.
 
 According to the information and explanations given to us and the
 records of the Company examined by us, the details of disputed dues not
 paid of excise duty, service tax, income-tax and sales tax dues as at
 March 31, 2012 are as follows:
 
 (xiv) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that short term funds have not been used to finance long term
 investments.
 
 (xv) As the Company has not made any preferential allotment of shares
 during the year, paragraph 4 (xviii) of the Order is not applicable.
 
 (xvi) The Company has not issued any debenture during the year.
 
 (xvii) Since, the Company has not raised any money by way of public
 issue during the year, paragraph 4 (xx) of the Order is not applicable.
 
 Nature of the        Nature of      Forum where             Amount*
 statute              the dues       pending                (Rs. in
                                                             Crores)
 
 Central Excise Law   Excise duty    Appellate authority up  3.11
                                     to Commissioners'' level
 
                                     Central Excise and      5.56
                                     Service Tax Appellate 
                                     Tribunal
 
                                     High Court              2.56
 
 Finance Act, 1994    Service Tax    Appellate authority up  0.11
                                     to Commissioners'' level
 
                                     Central Excise and      0.26
 
                                     Service Tax Appellate 
                                     Tribunal
 Income Tax Act, 1961 Income tax     Appellate authority
                                     up to                   0.20
 
                                     Commissioners'' level
 
 Sales Tax Laws       Sales tax      Appellate authority 
                                     up to                   2.71
                                     Commissioners'' level
                                     Appellate Tribunal      2.59
 
 
 
 Nature of the       Amount paid             Period to which the
 statute             under protest           amount relates
                    (Rs. in Crores)
 
 Central Excise Law     0.07               1995-96, 2005-06, 2006-07,
                                           2007-08,  2008-09, 2009-10,
                                           2010-11
 
 Finance Act, 1994      1.70               1997-98, 2004-05, 2005-06
                                           2006-07, 2007-08, 2008-09
                                           2009-10,  2010-11
 
                        0.06               2006-07, 2007-08, 2008-09,
                                           2009-10, 2010-11
 
                        0.01               2007-08, 2008-09, 2009-10
                                           2010-11
 
                        0.06               2005-06, 2006-07, 2007-08,
                                           2008-09,  2009-10
 
 Income Tax Act, 1961   0.20               2007-08
 
 Sales Tax Laws         0.50               1983-84, 2001-02, 2005-06,
                                           2006-07, 2007-08, 2008-09
 
                        0.83               1994-95, 2007-08, 2008-09
 
 * amount as per demand orders including interest and penalty wherever
 quantified in the Order.
 
 (x) According to the records of the Company examined by us and the
 information and explanations given to us, the Company, during the year,
 has not defaulted in repayment of dues to financial institutions, banks
 and debenture holders.
 
 (xi) As the Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities, paragraph 4 (xii) of the Order is not applicable.
 
 (xii) As the Company has not given any guarantees during the year for
 loans taken by others from banks or financial institutions, paragraph
 4(xv) of the Order is not applicable.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the term loans taken during the year have been applied for
 the purpose for which they were obtained, other than temporary
 deployment pending allocation.
 
 (xviii) To the best of our knowledge and according to the information
 and explanations given to us, no fraud by the Company and no material
 fraud on the Company has been noticed or reported during the year.
 
                                           For DELOITTE HASKINS & SELLS 
                                                  Chartered Accountants 
                                             (Registration No.015125 N)
 
                                                      Jaideep Bhargava
 
 Gurgaon                                                       Partner
 
 Date : May 11, 2012                             Membership No.: 90295