We have audited the attached Balance Sheet of Disa India Limited,
 Bangalore as at 31st December, 2011, the Profit and Loss Account and
 also the Cash Flow Statement for the year ended 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.
 
 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.
 
 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 aid Order.
 
 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 purposes of our
 audit ADs-
 
 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 ADs-
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account ADs-
 
 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 ADs-
 
 v.  On the basis of written representations received from the
 Directors, as on 31st December, 2011, and taken on record by the Board
 of Directors, we report that 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 (i) of Section 274 of the Companies Act,
 1956 ADs-
 
 vi.  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:
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st December, 2011 ADs- and
 
 b) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date.
 
 c) in case of the Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT IN PURSUANCE OF COMPANIES (AUDITORS
 REPORT) ORDER, 2003
 
 (Referred to in our Report of even date)
 
 I.  The Company has maintained proper records showing full particulars
 including Quantitative details and situation of fixed assets. The
 Management at reasonable intervals has physically verified these Fixed
 Assets and no material discrepancies were noticed on such verification.
 
 II.  The physical verification of inventory has been conducted at
 reasonable intervals by the Management. The procedures for 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. The Company is maintaining proper records of inventory and
 any discrepancies noticed on physical verification are being properly
 dealt in the books of accounts.
 
 III. The Company has neither granted nor taken any loans, secured or
 unsecured to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act 1956.
 
 IV.  The Company has adequate internal control procedures commensurate
 with the size of the company and the nature of its business, for the
 purchase of inventory, fixed assets and also for the sale of goods.
 There are no major weaknesses in the internal control to be corrected.
 
 V.  The Company has not entered into any transaction as seen from the
 register maintained in pursuance of Section 301 of the Companies Act
 1956 with the exception of related party transactions with the group
 companies where the transactions purchases/sales are at reasonable
 rates as per the information given to us.
 
 VI.  The Company has not accepted deposits from the public and the
 provisions of Section 58A and 58AA of the Companies Act 1956, rules
 framed there under and other relevant directives issued by the Reserve
 Bank of India are not applicable to the Company.
 
 VII The Company has appointed 3 film of Auditors to carry out the
 Internal Audit. The Internal Audit is commensurate with the size of the
 Company and nature of its business.
 
 VIII.  The Company is not required to maintain the cost records as
 prescribed by the Central Government under clause (d) of sub- section
 (i) of section 209 of the Companies Act 1956.
 
 IX.  The Company is regular in depositing 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 and Cess with the appropriate
 authorities except for the following cases:
 
 Forum             Description      Period related to   Net Demand 
                                                       (In Rs.)
 
 Assistant 
 Commissioner of   Credit of 
                   service tax on   July 2007 to
 Central Excise 
 - Bangalore.      staff transport 
                   sought           June 2008           1,17,230/-
                   to be 
                   disallowed.
 
 Addtl. 
 Commissioner of   Credit of 
                   service tax on   March 2010 to
 Central Excise
 - Bangalore.      Croup Insurance 
                   Policy sought    Feb 2011            5,27,099/-
                   to be 
                   disallowed.
 
 Karnataka High
 Court,            Appeal filed 
                   against Penalty  Assessment Year
 Bangalore.        levied under
                   section
                   271(1)(c)        2004-05            19,09,818/-
                   of the 
                   Income Tax 
                   Act, 1961,
 
 X.  The company has got accumulated profits at the end of the year and
 the company has not incurred cash losses in the current year and in the
 immediately preceding year.
 
 XI.  The Company has not defaulted in repayment of dues to Financial
 Institutions or Banks or debenture holders.
 
 XII. The Company has not granted any loan and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Accordingly paragraph 4 (xii) of the Order is not applicable ADs-
 
 XIII In our opinion and according to the information and explanations,
 the company is not a Chit Fund, Nidhi or Mutual Benefit Fund/
 Societies. Accordingly paragraph 4 (xiii) of the Order is not
 applicable ADs-
 
 XIV. According to the information and explanations given to us, the
 company is not dealing or trading in shares, securities, debentures or
 other investments. Accordingly paragraph 4(xiv) of the Order is not
 applicable.
 
 XV The Company has not given any guarantee for loans taken by others
 from Bank or Financial Institution etc.
 
 XVI. The Company has not obtained any term loans during the year.
 
 XVII.  The funds raised by the Company on short-term basis have not
 been used for long term investment and vice versa.
 
 XVIII.  The Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained under
 section 301 of the Companies Act, 1956 during the year.
 
 XIX. The Company has not issued any debentures during the year.
 
 XX.  The Company has not raised any money by public issues during the
 year. Accordingly paragraph 4(xx) of the Order is not applicable.
 
 XXI. Based on our examination and the information provided to us by the
 company, no fraud on or by the company has been noticed or reported
 during the year.
 
                                             for M.K.DANDEKER  ACY- CO.
 
                                             (ICAI Reg No. 000679S)
 
                                                      K.J.DANDEKER
 
                                                           Partner
 
 Place : Bangalore                            Chartered Accountant
 
 Dated : 29.02.2012                            Membership N0.18533