1. We have audited the attached Balance Sheet of DIC India Limited
 (the Company) as at 31st December 2011, and the related Profit
 and Loss Account 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 (Auditors'' 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 check 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, Profit and 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 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 Act;
 
 (e) On the basis of written representations received from the
 Directors, and taken on record by the Board of Directors, none of the
 Directors is disqualified as on 31st December 2011 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 31 st December, 2011;
 
 (ii) in the case of the Profit and Loss Account, 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 DIC India Limited on the financial statements for the year
 ended 31st December, 2011
 
 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 three 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
 of by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties and in
 transit) 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 and those in transit have been
 verified by the management with reference to subsequent receipts and/or
 relevant documents. 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. Hence the provisions of Clause 4 (iii)
 (b)
 
 (c) and (d) are not applicable.
 
 (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. Hence the provisions of Clauses 4(iii)
 (f) and (g) are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us having regard to the explanation that some inventory items
 purchased are of a special nature and suitable alternative sources do
 not exist for obtaining comparable quotation, 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, 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, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, 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) The transaction for purchase of goods made in pursuance of
 contracts or arrangements entered in the register maintained under
 Section 301 of the Act and exceeding the value of rupees five lakhs in
 respect of a party during the year were of a special nature for which
 no comparable market prices were available as explained by the
 management of the Company.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and 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 the undisputed statutory dues including
 provident fund, investor education and protection fund, employees''
 state insurance, income-tax, sales-tax, wealth tax, service tax,
 customs duty, excise duty, cess 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, wealth-tax, service-tax, customs duty, excise
 duty and cess as at 31st December 2011 which have not been deposited
 on account of a dispute, are as follows:
 
 Name of the statute      Amount (Rs.)    Forum where the dispute is
                                          pending
 
 Income Tax Act           11,916,693      Hon''ble High Court at Calcutta
 
                           7,905,005      Commissioner (Appeals)
 
                           1,477,362      Income Tax Appellate Tribunal
 
                             372,424      Deputy Commissioner of Income 
                                          Tax, Circle 10
 
 Local Sales Tax Act      55,426,153      Additional Commissioner of 
                                          Commercial Taxes
 
                           1,109,088      Appellate and Revisional Board
 
 Central Sales Tax         1,061,164      Commissioner (Appeals)
 
                         135,176,303      Additional Commissioner of 
                                          Commercial Taxes
 
                           3,000,000      Joint Commissioner (Appeal)
 
                           5,600,000      Appellate Tribunal
 
                             228,602      Hon''ble High Court at Calcutta
 
 Excise Duty              22,614,641      Commissioner Central Excise 
                                         (Appeals)
 
                          23,786,608      CESTAT
 
                          11,908,624      Jurisdictional Commissioner 
                                          of Excise
 
 Service Tax              17,220,846      Commissioner of Service Tax
 
 Customs Duty              3,428,167      Hon''ble High Court at Calcutta
 
 10.  The Company has no accumulated losses as at 31st December 2011
 and it has not incurred any cash losses in the financial year ended on
 that date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institutions or banks 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.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purpose for which they were obtained.
 
 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 no
 debentures are outstanding at the end of the year.
 
 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 such case by the Management.
 
                                                 For Lovelock & Lewes
 
                                     Firm Registration Number 301056E 
 
                                                Chartered Accountants 
 
                                                     Sunit Kumar Basu
 
 Kolkata                                                      Partner
 
 8th February 2012                            Membership Number 55000