1.  We have audited the attached Balance Sheet of GMM Pfaudler Limited,
 as at March 31, 2012 ,the Statement of Profit and Loss and 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 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) Order (Amendment) Order
 2004, issued by the Central Government in terms of Section 227(4A) of
 the Companies Act, 1956, we give 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 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 purpose 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 such
 books.
 
 c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow
 Statement referred to in this report are in agreement with the books of
 account.
 
 d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
 and Cash Flow Statement comply with the Accounting Standards referred
 to in sub-section (3C) of Section 211 of the Companies Act, 1956, to
 the extent applicable.
 
 e) In our opinion and to the best of our information and according to
 the explanations given to us the said accounts i read with the 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 March 31, 2012;
 
 ii) in the case of the Statement of Profit and Loss, of the profit 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 written representations received from the directors
 as on March 31, 2012 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 2012;
 from being appointed as director under clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 
 Referred to in paragraph (3) of our report of even date on the accounts
 of GMM Pfaudler Limited for the year ended March 31,2012.
 
 1) (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a program for physical verification of fixed assets
 at periodic intervals. In our opinion, the period of verification is
 reasonable having regard to the size of the Company and the nature of
 its assets. The discrepancies noticed on such verification were not
 material and the same have been properly dealt with in the books of
 account.
 
 (c) In our opinion, the fixed assets disposed off during the year were
 not substantial, and do not affect the going concern assumption.
 
 2) (a) The management has conducted physical verification of inventory
 at reasonable intervals.
 
 (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.
 
 (ii) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between physical inventories and
 book records were not material in relation to the operations of the
 Company and the same have been properly dealt with in the books of
 account.
 
 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 Companies Act, 1956.
 
 (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 Companies Act, 1956.
 
 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, for the purchase of inventory and fixed assets and for the
 sale of goods and services.
 
 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 Act have been entered in the register required to
 be maintained under that section.
 
 (b) In our opinion and according to the information and explanation
 given to us, having regard to the explanation that certain transactions
 being of a special nature where comparable alternative quotations are
 not available, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act 1956 and exceeding rupees five lakh with any party
 during the year, have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 6) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits during the year
 from the public within the meaning of Sections 58A and 58AA or any
 other relevant provisions of the Companies Act, 1956, and the rules
 framed there under.
 
 7) The Company has an internal audit system, which in our opinion, is
 commensurate with the size of the Company and the nature of its
 business.
 
 8) We have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(1 )(d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed cost records have been maintained. We have, however, not
 made a detailed examination of the cost records with a view to
 determine whether they are accurate or complete.
 
 9) (a) According to the records examined by us, the Company is
 generally regular in depositing undisputed statutory dues including
 Provident Fund, Employees'' State Insurance, Income Tax, Wealth Tax,
 Service Tax, Customs Duty, Excise Duty, cess and other statutory dues
 applicable to it with the appropriate authorities.  According to the
 information and explanations given to us, no undisputed amounts payable
 in respect of aforesaid statutory dues were outstanding, at the
 year-end for a period of more than six months from the date they became
 payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service
 tax, Excise Duty or cess outstanding on account of any dispute, other
 than those stated hereunder:
 
 Name of Statute    Nature of Dues   Amount    Period to     
                                               which the  Forum where
                                                          dispute
                                     (In Rs. 
                                     Millions)  amount 
                                                relates   is pending
 
 Income tax 
 Act, 1961          IncomeTax          488      1991-92   Income Tax
                                                          Appellate 
                                                          Tribunal
 
 Central 
 Excise Act         Excise Duty       4348    1996-2012   Assistant 
                                                          Commissioner
                                                          of Central 
                                                          Excise and 
                                                          Tribunal
 
 10) The Company has no accumulated losses as at the end of the
 financial year and it has not incurred any cash losses in the current
 and immediately preceding financial year.
 
 11) According to the information and explanations given to us and based
 on the documents and records produced to us, the Company has not
 defaulted in repayment of dues to a financial institution, bank or
 debenture holders.
 
 12) According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares and other securities.
 
 13) In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund and nidhi / mutual benefit
 fund/ societies.
 
 14) In our opinion, the Company has maintained proper records of the
 transactions and contracts in respect of investments purchased and sold
 during the year and timely entries have been made therein. The
 investments made by the Company are held in its own name.
 
 15) According to the information and explanations given to us and the
 records examined by us, the Company has not given any guarantee for
 loans taken by others from banks or financial institutions.
 
 16) According to the information and explanations given to us and the
 records examined by us, the Company has not obtained any term loans.
 
 17) On the basis on an overall examination of the balance sheet and
 cash flows of the Company and the information and explanations given to
 us, we report that the Company has not utilized the funds raised on
 short-term basis for long-term investment.
 
 18) The Company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 19) The Company did not issue any debentures during the year.
 
 20) The Company has not raised any money through a public issue during
 the year.
 
 21) Based on 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 year.
 
 For and on behalf of 
 
 KALYANI WALLA & MISTRY 
 
 Chartered Accountants
 
 Firm Registration No: 104607W
 
 Vinayak M. Padwal
 
 Partner
 
 M. No: F 49639
 
 Mumbai, May 7, 2012