1.  We have audited the attached Balance Sheet of Mahindra & Mahindra
 Limited as at 31st March, 2012, the Statement of Profit and Loss 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 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 the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 Statement of Profit and Loss 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 Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) 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 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 31st March, 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 the written representations received from the
 Directors as on 31st March, 2012, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2012 from being appointed as a director in terms of Section
 274(1) (g) of the Companies Act, 1956.
 
 i.  In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets have not been physically verified by the
 management during the year but the Company has a system of verifying
 the fixed assets once in every three years. In our opinion the
 frequency of verification is at reasonable intervals.
 
 (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.
 
 ii.  In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 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.
 
 iii. 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.
 
 iv.  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 is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 v.  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 have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in
 respect of any party, 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,
 the transactions have been made at prices which are prima facie
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 vi.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Companies Act,
 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
 to the deposits accepted from the public. According to the information
 and explanations given to us, no order has been passed by the Company
 Law Board or the National Company Law Tribunal or the Reserve Bank of
 India or any Court or any other Tribunal.
 
 vii. In our opinion, the Company has an adequate internal audit system
 commensurate with the size 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 motor vehicles and tractors and
 are of the opinion that 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 the 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, Value Added 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 Income- tax,
 Wealth Tax, Customs Duty, Excise Duty, Cess and other material
 statutory dues in arrears as at 31st March, 2012 for a period of more
 than six months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty and Cess which have not been deposited as on
 31st March, 2012 on account of disputes are given below:
 
 Statute        Nature of 
                Dues        Forum where the 
                            Dispute is pending    Period to
                                                  which the     Amount
                                                                involved
                                                  amount 
                                                  relates      (Rs. in 
                                                                crores)
 
 Income-Tax 
 Laws           Income-Tax  Appellate Authority 
                            - Tribunal Level      1998-2009       799.66
 
                            Appellate Authority 
                            - Commissioner 
                           (Appeals)              1995-2009        29.72
 
 Sales Tax 
 Laws             Sales Tax High Court            1987-2008       181.88
 
                            Appellate Authority 
                            - Tribunal Level      1987-2010         8.65
 
                            Appellate Authority 
                            - Commissioner 
                           (Appeals)              1997-2010        43.26
 
 Service Tax 
 Laws             Service 
                  Tax       Appellate Authority 
                            - Tribunal Level      2002-2009         5.95
 
                            Appellate Authority 
                            - Commissioner        2004-2010        36.94
 
 Excise Duty 
 Laws             Excise 
                  Duty      Supreme Court         1991-1996       475.52
 
                            Appellate Authority
                            - Tribunal Level      1987-2009       536.86
 
                            Appellate Authority
                            - Commissioner        2001-2010        81.23
 
 Customs Duty 
 Laws             Customs 
                  Duty      Appellate Authority 
                            - Tribunal Level      1992-2001         0.76
 
 x.  The Company does not have accumulated losses as at 31st March, 2012
 and has not incurred cash losses during the financial year ended on
 that date 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, financial institutions and 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 provisions of any special statute as specified under the
 clause (xiii) of the said Order 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 paragraph 4(xiv) of the Order are not applicable to the
 Company.
 
 xv.  According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions, the terms and conditions, whereof, in
 our opinion are prejudicial to the interests of the Company.
 
 xvi. In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained.
 
 xvii.  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 investments.
 
 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. According to the information and explanations given to us, the
 Company has created security in respect of the debentures issued in
 earlier years.
 
 xx.  The Company has not raised any money by public issue during the
 year.
 
 xxi. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 significant fraud on or by the Company, noticed or reported during the
 year nor have we been informed of such case by the management.
 
 
 
 
                                         For DELOITTE HASKINS & SELLS
 
                                                Chartered Accountants 
 
                                             (Registration No.117364W)
 
                                                         B. P. Shroff
 
                                                              Partner
 
                                                 (Membership No.34382)
 
 MUMBAI : 30th May, 2012