We have audited the attached Balance Sheet of Force Motors Limited as
 at 31st March 2011, and also the Profit and Loss Account and 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 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 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 (as amended
 by Companies (Auditor''s Report) (Amendment) Order, 2004) 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 said 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;
 
 (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;
 
 (iii) The Balance Sheet and the Profit and Loss Account & Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (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;
 
 (v) On the basis of written representations received from the
 directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
 
 (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 March, 2011;
 
 (b) in the case of the Profit and Loss Account, of the PROFIT for the
 year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 (Referred to in Paragraph 3 of our report of even date)
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets.
 
 (b) All the assets have been physically verified by the management
 during the year and there is a regular program of verification which,
 in our opinion, is reasonable having regard to the size of the Company
 and the nature of its assets. No material discrepancies were noticed on
 such verification.
 
 (c) During the year, the Company has not disposed off major part of the
 fixed assets.
 
 2.  (a) The inventory has been physically verified during the year by
 the management, which is, in our opinion, at reasonable intervals.
 
 (b) The procedures of physical verification of inventories 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 records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. No material discrepancies were noticed on verification
 between the physical stocks and the book records.
 
 3.  (a) The Company has not granted any loans to companies, firms and
 other parties covered in the Register maintained under Section 301 of
 the Companies Act, 1956, during the year.
 
 (b) The Company has not taken any loans from companies, firms and other
 parties covered in the Register maintained under Section 301 of the
 Companies Act, 1956, except unsecured loans from one party, balance
 outstanding of which is Rs. 77.50 crores.
 
 (c) The rate of interest and other terms and conditions of loans taken
 by the Company, secured or unsecured, are prima facie not prejudicial
 to the interest of the Company.
 
 (d) The payment of the principal amount and interest are also regular.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods and services.  During the course of our
 audit, no major weakness has been noticed in the internal control
 system.
 
 5.  (a) Based on the audit procedures applied by us and according to
 the information and explanations provided by the management,
 
 we are of the opinion that the particulars of contracts or arrangements
 referred to in Section 301 of the Companies Act, 1956 have been entered
 in the Register required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of five lakh rupees in respect of
 any party during the year have been made at prices which are reasonable
 having regard to prevailing market prices at the relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Section
 58A, 58AA or any other relevant provisions of the Act and the rules
 framed there under, with regard to the deposits accepted from the
 public. As informed 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.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.
 
 9.  (a) According to the records of the Company, the Company is regular
 in depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investor Education & Protection Fund,
 Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax,
 Custom-duty, Excise-duty, Cess, Service-tax and other statutory dues
 applicable to it.
 
 According to the information and explanations given to us, no
 undisputed statutory dues including Provident Fund, Investor Education
 & Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax,
 Wealth-tax, Custom duty, Excise-duty, Cess, Service tax and other
 statutory dues applicable to it were outstanding, as at the balance
 sheet date for a period of more than six months from the date they
 became payable.
 
 (b) According to the records of the Company, there are no dues of
 Sales-tax, Income-tax, Customs-duty, Wealth-tax, Excise-duty, Cess and
 Service-tax which have not been deposited on account of any dispute,
 except :
 
 Type of        Amount      Forum
 the dues     outstanding
                (Rs. In 
                Lakhs)
 
 Customs        0.80        Asst. Commissioner of
 
 Duty                       Customs, Mumbai, CESAT, Mumbai
 
 Sales Tax    308.18        Sr. Dy. Commissioner of Sales Tax,
 
                            Pune, Maharashtra Sales Tax
                            Tribunal, Mumbai, Joint
                            Commissioner of Sales Tax (Appeal)
                            1, Pune, Dy. Commissioner
                            (Appeals) III Commercial Taxes,
                            Jaipur, Dy. Commissioner of
                            Commercial Tax (Coimbatore, Indore
                            & Sitarampur), Additional
                            Commissioner, Commercial Tax,
                            Indore and M. P. Commercial Tax
                            Appellate Board, Bhopal.
 
 Excise       153.88        CESAT, New Delhi, CESAT, West
 
 Duty                       Regional Bench, Mumbai,
 
                            Commissioner of (Appeals), Indore
                            and Commissioner of Central Excise
                            (Appeals), Pune I Commissionerate,
                            Pune 
 
 TOTAL        462.86
 
 10.  There are no accumulated losses as at the Balance Sheet date. The
 Company has not incurred cash losses during the financial year covered
 by our audit, nor in the immediately preceding financial year.
 
 11.  Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to any financial
 institution, bank or debenture holders.
 
 12.  The Company has not granted 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 funds are
 not applicable to the Company.
 
 14.  The Company is not dealing or trading in shares, securities,
 debentures and other investments.
 
 15.  The Company has not given any guarantee for loans taken by others
 from banks or financial institutions.
 
 16.  The term loans have been applied for the purpose for which they
 were raised.
 
 17.  The funds raised on short-term basis have not been used for long
 term investment.
 
 18.  The Company has not made preferential allotment of shares during
 the year.
 
 19.  No money has been raised by debenture issues during the year.
 
 20.  No money has been raised by public issues during the year.
 
 21.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the Company has been noticed or reported during the course of our
 audit.
 
 
                                               For M/s. P. G. Bhagwat
 
                                                      [FRN : 101118W]
 
                                                Chartered Accountants
 
 Place : Pune                                          S. S. Athavale
 
 Date : 28th May, 2011                                        Partner
 
                                                 Membership No. 83374