We have audited the attached Balance Sheet of D & H INDIA LIMITED as at
 31st March 2012 and also the Profit and Loss Account and the Cash Flow
 Statement for the year ended on that date annexed there to. 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 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.
 
 1.  As required by the Companies (Auditors'' Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) Amendment Order, 2004
 issued by the Central Government of India in terms of section 227 (4A)
 of the Companies Act, 1956, we give in the annexure, a statement on the
 matters specified in the paragraph 4 & 5 of the said order.
 
 2.  Further to our comments in the Annexure referred to in paragraph 1
 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 & 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 & Loss Account and Cash
 Flow Statement have been prepared in compliance with the Accounting
 standards referred to in sub-section 3C of section 211 of the Companies
 Act, 1956, to the extent applicable and mandatory in nature.
 
 (e) In our opinion and on the basis of information obtained and taken
 on record by the Board of Directors, we report that none of the
 directors of the company is disqualified as on 31.03.2012 from being
 appointed as the director of the company in terms of clause (g) of
 subsection (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 together with the
 Significant Accounting Policies and other 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:
 
 (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 Profit and Loss Account, of the PROFIT for the
 year ended on that date.
 
 (iii) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in paragraph 1 of our report of even date on the accounts
 for the year ended 31st March 2012 of D & H India Limited
 
 I a. The proper records showing full particulars including quantitative
 details and situation of the fixed assets are being
 
 maintained by the company.
 
 b.  All the fixed assets have been physically verified by the
 management during the year, which in our opinion is reasonable having
 regard to the size of the company and the nature of its assets. As per
 information and explanations given to us, no material discrepancies
 were noticed.
 
 c.  In our opinion and according to the information and explanations
 given to us, any substantial part of fixed assets has not been disposed
 off by the company during the year and the going concern status of the
 company is not affected.
 
 II a. The inventory of the company has been physically verified by the
 management during 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 inventory
 followed by the management are reasonable & adequate, in relation to
 the size of the company & nature of its business.
 
 c.  On the basis of our examination of records of inventory, in our
 opinion, the company has maintained proper record of inventory and as
 explained to us, the discrepancies noticed on physical verification of
 inventory, as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 III a. The company has not granted any loan secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Hence clause (a) to (d)
 is not applicable to the company.
 
 e.  The company has taken unsecured loan from two parties covered in
 the register maintained under section 301 and , the maximum amount
 involved during the year was Rs.79,84,796/- and year-end balance of
 loan was Rs. 62,327/-.
 
 f.  The rate of interest and other terms and conditions of unsecured
 loans taken by the company, are prima-facie not prejudicial to the
 interest of the company.
 
 g.  The unsecured loan taken from parties. has been squared up during
 the year except interest portion.
 
 IV In our opinion and according to information & explanations given to
 us, there is adequate internal control system commensurate with the
 size of the company & nature of its business with regard to the
 purchase of inventory & fixed assets & for the sale of goods. Further
 on the basis of our examination of the books and records of the
 company, carried out in accordance with the generally accepted auditing
 practices in India, we have neither come across nor have been informed
 of any instances of major weaknesses in the internal control system.
 
 V a. Based on audit procedures applied by us, to the best of our
 knowledge & belief and according to the information & explanations
 given to us. We are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act have been entered in
 the register required to be maintained under that section.
 
 b.  In our opinion and according to information & explanations given to
 us, transactions made in pursuance of contracts or arrangement entered
 in the register maintained under section 301 of the Companies Act, 1956
 have been made at prices which are reasonable having regard to
 prevailing market prices at the relevant time where such market prices
 are available.
 
 VI In our opinion and according to the information & explanations given
 to us, the company has not accepted deposit from public, within the
 meaning of provisions of section 58A & 58AA of Companies Act, 1956 &
 Rules framed there under.
 
 VII In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 VIII As informed to us and in our opinion the maintenance of cost
 records has not been prescribed by the Central Government U/s 209(1)(d)
 of the Companies Act, 1956 for any product of the company.
 
 IX a According to the records of the company examined by us and the
 information & explanations given to us, in our opinion the company is,
 generally regular in depositing with appropriate authorities undisputed
 statutory dues including Provident Fund, Investors Education &
 Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
 service tax Excise Duty, Wealth Tax, Custom Duty, cess and other
 statutory dues applicable to it. No undisputed amount payable as at
 31.03.2012 for a period of more than 6 month from the date they became
 payable.
 
 b.  According to records of the company examined by us and the
 information & explanations given to us, there are following statutory
 dues which have not been deposited on account of dispute.
 
 Q                  Nature of  Period to 
                               which the       Amount    Forum where the
 Nature of Statute  the dues   amount relates  in Rs.    dispute is 
                                                         pending
 
 CST                Regular 
                    assessment  2006-07        577794    D Comm. of 
                                                         Appeal Indore
                                2008-09        252851
 
 Entry Tax          Regular 
                    assessment  2004-05        111551    DC. Comm. App.
 
                                2005-06        111968    DC. Comm. App.
 
                                2006-07        258747    DC. Comm. App.
 
                                2008-09         38272    Add Comm. App.
 
 Entry Tax 
 Penalty            Regular 
                    assessment  2004-05        844260    Asst Comm. App.
 
                                2005-06       2515867    Asst Comm. App.
 
                                2006-07       1404000    DC. Comm. App.
 
 CST Penalty        Regular 
                    assessment  2005-06        229245    A C Appeal 
                                                         Revision
 
                                2006-07       1452282
 
 X The Company does not have accumulated losses at the end of the
 financial year and it has not incurred any cash losses in the current
 year and immediately preceding financial year.
 
 XI Based on our audit procedure & on the basis of information &
 explanations given by the management, we are of the opinion that the
 company has not defaulted in payment of dues to the financial
 institution or bank during the year. The company does not have any
 borrowing by way of debentures.
 
 XII The company has not granted any loans & advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 XIII In our opinion and according to the information & explanations
 given to us, the company is not a chit fund and nidhi I mutual benefit
 fund / society. Therefore, provisions of this clause is not applicable
 to the company.
 
 XIV Based on our examination of records and the information &
 explanations given to us, the company has maintained proper records of
 the transactions & contracts in respect of dealing & trading in shares,
 securities, debentures and other investments and timely entries have
 been made. All the investments have been held by the company in its own
 name.
 
 XV According to the information & explanations given to us, the company
 has not given any guarantee for loans taken by others from the banks
 and financial institutions during the year.
 
 XVI According to the records of the company, examined by us and the
 information & explanations given to us, the company has raised new term
 loans during the year. The term loan outstanding at the beginning of
 the year and those raised during the year have been applied for he
 purposes for which they were raised.
 
 XVII According to the information & explanations given to us and on the
 basis of an overall examination of balance sheet of the company, in our
 opinion no funds raised by company on short term basis that have been
 used for long term investments.
 
 XVIII During the year company has converted 4,60,000 convertible
 warrants into equal number of fully paid equity shares of Rs.10/- each
 at a premium of Rs.12/- per share on preferential basis to parties and
 companies covered in the register maintained under Section 301 of the
 Companies Act, 1956.
 
 XIX As explained to us, during the period covered by our audit, the
 company has not issued any debentures.
 
 XX The company has not raised any money through public issue during the
 year.
 
 XXI According to the information & explanation given to us, no fraud on
 or by the company has been noticed or reported during the course of our
 audit.
 
                                          For and on behalf of ABN & Co.
 
                                               Chartered Accountants
 
                                                    B.M. BHANDARI
 
 Place: Indore                                           Partner
 
 Date : 11th August,2012                            (Mem.No.071232)