We have audited the attached Balance Sheet of The Indian Hume Pipe
 Company Limited as at 31st March, 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 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.
 
 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. The Branch Auditor’s Reports have been forwarded to us and
 have been appropriately dealt with in this report;
 
 (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 and with the audited returns from the branches;
 
 (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 the affairs of the
 Company as at 31st March, 2011;
 
 b) in case of the Profit and Loss account, of the profit for the year
 ended on that date; and
 
 c) in the case of Cash Flow statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS’ REPORT
 Re: The Indian Hume Pipe Company Limited
 Referred to in paragraph 3 of our report of even date,
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of Fixed
 Assets.
 
 (b) Fixed assets have been physically verified by the management during
 the year. In our opinion the frequency of such verification is
 reasonable having regard to the size of the Company and the nature of
 it’s fixed assets. No material discrepancies were noticed on such
 physical verification.
 
 (c) The fixed assets disposed off during the year were not substantial.
 According to the information and explanation given to us, we are of the
 opinion that the disposal of the fixed assets has not affected the
 going concern status of the Company.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management 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) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) (a) The Company has not granted any loans, secured or unsecured
 to the companies, firms and other parties covered in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly
 sub clause (b), (c) and (d) are not applicable.
 
 (b) The Company has not taken any loans, secured or unsecured from the
 companies, firms and other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Accordingly sub clause
 (f) & (g) are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, 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 and fixed assets and with regard to the sale
 of goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in the
 internal control system.
 
 (v) According to the information and explanations given to us, there
 were no contracts or arrangements that needed to be entered in the
 register maintained under section 301 of the Companies Act, 1956.
 Accordingly sub clause (b) is not applicable.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with provisions of sections 58A
 and 58AA or any other relevant provision of the Companies Act, 1956 and
 the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. As informed to us, no order has been
 passed by the Company Law Board, National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) 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. However, we have
 not made a detailed examination of the records for determining whether
 they are accurate or complete.
 
 (ix) (a) The Company is generally regular in depositing with
 appropriate authorities, undisputed statutory dues including Provident
 Fund, Investor Education and Protection Fund, Employee’s State
 Insurance, Income Tax, Fringe Benefit Tax, Sales Tax, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty, Cess and any other material
 statutory dues applicable to it.
 
 According to the information and explanations given to us, undisputed
 dues in respect of Provident Fund, Investor Education and Protection
 Fund, Employees’ State Insurance, Income-tax, Wealth-tax, Service tax,
 Sales-tax, Customs duty, Excise duty, cess and other statutory dues
 which were outstanding, at the year end for a period of more than six
 months from the date they became payable are as follows:
 
 Name of the   Nature of    Amount   Period to Due date   Date of
 Statue        the Dues     (Lacs)   to which             payment
                                     amount 
                                     relates 
 
 Andhra 
 Pradesh       Works        26.11    2009-10   20.04.11    Not
 Value         Contract                                    paid
 Added         tax
 Tax, 
 2005 
 
 (b) According to the records of the Company, there are no dues of Sales
 Tax, Income Tax, Fringe Benefit Tax, Customs Duty, Wealth Tax, Service
 Tax, Excise Duty, Cess which have not been deposited on account of any
 dispute other than those detailed below:
 
 Period to Forum where dispute is pending
 
 Name of  Nature    Period to     Forum where  dispute is pendind
 Statute  of Dues   which the  commiss        Appelete   High Court
                    amount    ionerate/       Tribunal      Rs Lacs)
                              Dy Commi        Authorit
                            ssionerate          ies(Rs
                               Rs Lacs)           Lacs)
 
 
 
 
 
 Sales 
 Tax / 
 VAT      Tax /
          Penalty/
          Interest  1980-81          -               -         1.09
 
                    1982-83          -               -         2.57
 
                    1986-87          -               -         1.78
 
                    1989-90          -           25.31        75.15
 
                    1990-91          -           35.70        66.84
 
                    1991-92          -           31.31        15.09
 
                    1992-93          -           15.40        90.82
 
                    1993-94          -           14.39        88.83
 
                    1994-95          -           53.11        69.66
 
                    1995-96          -          106.11       157.94
 
                    1996-97          -            0.20        77.95
 
                    1997-98        1.12              -        65.35
 
                    1998-99          -               -        59.30
 
                    1999-00          -               -         5.81         
 
                    2000-01          -               -        85.30
 
                    2001-02          -               -       197.15
 
                    2002-03          -               -       167.40
 
                    2003-04          -               -       120.21
 
                    2004-05          -               -        59.95
 
                    2005-06          -               -        32.53
 
                    2006-07        4.50              -        34.45
 
                    2007-08       13.35              -            -
                
                    2008-09           -          16.47            -       
 
 Central 
 Excise 
 Act,     Duty, 
 1944     Interest 
          and       1978-79       1.06               -            -
          Penalty
          on        1981-82       0.37               -            -
          Valua
          -tion
          Classifi  1982-83       0.11               -            -
          cation/
          Tariff
                    1985-86       0.06               -            -
 
                    1990-91          -            1.73            -       
                     
                    1991-92       0.57            0.80            -       
           
                    1992-93       0.15               -            -
 
                    1993-94          -            0.35            -
 
                    1994-95       7.01            3.10            -
 
                    1995-96       0.59            1.61            -
 
                    1996-97       0.53               -            -      
 
                    1997-98       0.71               -            -       
 
                    1998-99       0.80               -            -       
 
                    1999-00       0.51               -            -       
 
                    2000-01       1.25               -            -      
 
                    2004-05      11.89            8.44            -      
 
                    2005-06          -            4.80            -
 
                    2006-07          -            5.40       211.53
 
                    2007-08          -          376.00            -       
 
                    2008-09      44.43          439.34            -       
 
                    2009-10          -            0.74            -       
 
                    2010-11          -          131.06            -       
 Service 
 Tax      Tax, 
          Penalty, 
          Interest  2008-09          -            1.80            -      
 
                    2009-10       7.76               -            -
 
                    2010-11       6.27               -            -
 
 (x) The Company does not have any accumulated losses as per the Balance
 Sheet as at the end of the financial year. The Company has not incurred
 cash losses during the financial year covered by our audit and 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 repayment of dues to a
 financial institution, bank or debenture holders.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/
 Society. Therefore, the provisions of clause 4(xiii) of the Companies
 (Auditor’s Report) Order, 2003 (as amended) are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) According to the information and explanations given to us, the
 term loans have been applied for the purpose for which the loans were
 obtained.
 
 (xvii) According to the information and explanations given to us, and
 on an overall examination of Balance Sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 (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.
 
 (xix) There are no debentures issued by the Company during the year and
 therefore the requirement of creation of security or charge is not
 applicable.
 
 (xx) The Company has not raised any money during the year by public
 issue.
 
 (xxi) As per the information and explanations given to us, no fraud on
 or by the Company has been noticed or reported during the course of our
 audit
 
 
                                                For K. S. Aiyar & Co,
                                               Chartered Accountants 
                                            Registration No: 100186W
 
 
                                                   Raghuvir M. Aiyar
                                                             Partner 
                                               Membership No.: 38128
 
 Place: Mumbai 
 Date: 24th May, 2011