1.  We have audited the attached Balance Sheet of IFB Industries
 Limited (the Company) as at 31st March 2011, the Profit and Loss
 Account and the 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 the 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 (CARO)
 issued by the Central Government in terms of Section 227(4A) 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.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows :
 
 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 it appears from our examination of
 those books;
 
 c.  the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3 C) of the
 Companies Act, 1956;
 
 e.  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
 gives 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 2011;
 
 ii. in the case of the Profit and Loss Account, 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 31st March 2011, taken on record by the Board of Directors, and
 specially in view of the order dated 14th May 2004 passed by the
 Hon''ble Calcutta High Court on a writ petition filed by the Company and
 the existing Directors challenging the applicability of Section
 274(l)(g) of the Companies Act, 1956 which is pending final disposal,
 none of the Directors has been considered as disqualified as on 31st
 March 2011 from being appointed as a director in terms of Section
 274(l)(g) of the Companies Act, 1956.
 
 
 
 ANNEXURE to the Auditors'' Report
 
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Company''s
 business/activities/result, clauses (vi), (xii), (xiii), (xiv), (xvi),
 (xviii) and (xix) of CAROare not applicable.
 
 (ii) Inrespectofitsfixedassets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) Tne fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) Inrespectofitsinventories:
 
 (a) As explained to us, inventories were physically verified during the
 year by the management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) in our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, 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. During the
 course of our audit, we have not observed any major weakness in such
 internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered in the Register, maintained under the
 said Section has been so entered.
 
 (b) Where each of such transactions is in excess of Rs 500 thousands in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices
 
 at the relevant time except in respect of certain purchases for which
 comparable quotations are not available and in respect of which we are
 unable to comment.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by the internal audit department of the Company and by a
 company appointed by the Management have been commensurate with the
 size of the Company and the nature of its business.
 
 (viii) We have broadly reviewed the books of account 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 in respect of manufacture of electrical motors and machine
 tools and areof the opinion mat prima facie the prescribed accounts and
 records have been made and maintained. We have, however, not made a
 detailed examination of the records with a view to determining whether
 they are accurate or complete. To the best of our knowledge and
 according to the information and explanations given to us, the Central
 Government has not prescribed the maintenance of cost records for any
 other product of the Company.
 
 (ix) According to information and explanations given to us in respect
 of statutory dues:
 
 a.  The Company has generally been regular in depositing undisputed
 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
 applicable to it with the appropriate authorities.
 
 b.  There were no undisputed amounts payable in respect of Provident
 Fund, Sales Tax. Income-tax, Wealth Tax, Service Tax, Customs Duty,
 Excise Duty Cess and other material statutory dues in arrears as at
 31st March 2011 for a period of more than six months from the date they
 became payable.
 
 c.  Details of dues of Sales Tax, Service Tax, Excise Duty and Cess
 which have not been deposited as on 31st March 2011 on account of any
 dispute are given below:
 
 Name of the        Nature of     Value    Period to  Forum where dispute
                                           which      is pending
                                (Rs in 
                                Thousand)  amount 
                                           relates
 
 Central Sales 
 Tax Act &      Sales tax inclu-  27,977   1996-97,   Assessing Officer,
                                                      Assistant
 Local Sales 
 Tax Act        ding entry tax              1998-99,  Commissioner, Joint
                 and trade tax              2000-01   Commissioner 
                                              to      and Senior Joint
                                            2006-07   Commissioner, 
                                                      Commissioner
                                                      Appeals, Appellate
                                                      and Revisional 
                                                      Board, Appellate 
                                                      Tribunal.
 
 Central Excise 
 Act, 1944      Excise duty,      18,916    2000-01,  High Court,CEGAT,
 and Chapter V 
 of the Finance Service tax                 2004-05 
                                               to     Commissioner
                                                      Appeals,
 Act, 1994, as 
 amended        including                 2009-2010   and Assistant / 
                                                      Additional
                penalty                               Commissioner of 
                                                      Central Excise, 
                                                      Central Excise and
                                                      Service Tax 
                                                      Appellate 
                                                      Tribunal (CESTAT).
 
 Bombay 
 Provincial    Cess including   10,250      2004-05,
                                             2005-06  Civil Judge Court-
 Municipal 
 Corporation   interest on                   2006-07  
                                               and     Senior Division,
                                                       Thane and
 Act, 1949     Cess                         2007-2008  Bombay High Court
 
 (x) The accumulated losses of the Company at the end of the financial
 year are less than fifty per cent of its net worth and the Company has
 not incuned cash losses during the financial year and in the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by others from banks are not prima facie
 prejudicial to the interests of the Company.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet, we
 report that funds raised on short term basis have not been used during
 the year for long-term investment.
 
 (xiv) The Company has not raised any money through public issues during
 the year.
 
 (xv) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
                                          For DELOITTEHASKINS& SELLS
 
                                               Chartered Accountants
                                          (Registration No. 302009E)
 
                                               Abhijit Bandyopadhyay
                                                             Partner 
 Kolkata, 27th May, 2011                       Membership No. 054785