1. We have audited the attached Balance Sheet of Majestic Auto Limited,
 Ludhiana as at March 31, 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.
 
 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 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.
 
 4. Further to our comments in the annexure referred to in above paragraph,
 we state 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 such
 books;
 
 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;
 
 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 Section 211(3C) 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 of
 the Company, we report that none of the directors is disqualified as on
 31.03.2011 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act, 1956; and
 
 vi) Without qualifying our report, we draw attention to note no. 16 of
 notes to account, regarding the non ascertainability of the impact on
 stock valuation on the financials of the company due to change in stock
 valuation technique from Monthly Moving weighted average Basis to
 Moment Moving Weighted average for more appropriate and relevant
 presentation of financial statements.
 
 vii) In our opinion and to the best of our information and according to
 the explanations given and management representations made to us, the
 said accounts read together with ''Significant Accounting Policies'' and
 other ''Notes to Account'' 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 REFERRED TO IN PARAGRAH  ''3'' OF THE AUDITORS’ REPORT TO THE
 MEMBERS OF MAJESTIC AUTO LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED
 31ST MARCH, 2011.
 
 i) a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) As explained to us, the Company has a system of physical
 verification, which is designed to cover all assets over a period of
 three years, which in our opinion is reasonable having regard to the
 size of the Company and the nature of its fixed assets. Pursuant to the
 programme, certain fixed assets have been physically verified by the
 management during the year and no material discrepancies were noticed
 on such verification.
 
 c) The company has not disposed off any substantial part of its fixed
 assets so as to affect the Company as a going concern.
 
 ii) a) The inventory in the custody of the Company has been physically
 verified during the year by the management. In our opinion, the
 frequency of the verification is reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, 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.
 
 c) On the basis of examination of the records of inventories, we are of
 the opinion that the Company is maintaining proper records of inventory
 and no material discrepancy was noticed on physical verification.
 
 iii) a) The Company has not granted any loans, secured and unsecured,
 to companies, firms or other parties listed in the register maintained
 u/s 301 of the Companies Act, 1956, therefore the provisions of Clause
 4 (iii)(b), (c) and (d) of the Companies (Auditor''s Report) Order, 2003
 are not applicable to the Company.
 
 b) The Company has taken unsecured inter corporate deposits from three
 Companies covered under register maintained u/s 301 of the Companies
 Act, 1956. The maximum amount involved during the year was Rs.15.25
 crores and the year end balance was Rs. 5 crores.
 
 c) According to information and explanations given to us, the rate of
 interest and other terms & conditions of the aforesaid deposits are not
 prima-facie prejudicial to the interest of the company.
 
 d) In our opinion and according to information and explanations given
 to us, the Company has been regular in repayment of stipulated
 principal and interest.
 
 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 for
 sale of goods and services. During the course of our audit, we have not
 observed any continuing failure to correct any major weakness in
 internal controls.
 
 v) a) Based on the audit procedures applied by us and according to the
 information and explanations given to us, we are of the opinion that
 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 contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956, and exceeding a value of Rs. 5 lacs 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 except for items stated to be of proprietary nature, where the
 question of comparison does not arise.
 
 vi) As the Company has not accepted any deposits from the public,
 therefore provision of clause 4 
 
 (vi) of the Companies (Auditors'' Report) order, 2003 is not applicable
 to the Company.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of is 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 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.
 
 ix) a) According to the records of the Company / information and
 explanations given to us, the Company is regular in depositing
 undisputed statutory dues including Provident Fund, Investor Education
 and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
 material statutory dues applicable to it with the appropriate
 authorities.  According to the information and explanations given to
 us, no undisputed amount payable in respect of the above were in arrear
 as at 31st March, 2011 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 Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
 Excise Duty and Cess which have not been deposited on account of any
 dispute except as stated below:-
 
 S. No.  Nature            Nature of                   Amount                
 of      Statute           Dispute                     Unpaid
                                                          Rs.
                                                    
 1.      Punjab Value      Penalty u/s 51(7) (b)     1,77,357
         Added Tax, 2005   of Punjab Value Added
                           Tax Act, 2005
 
 2.      -do-              -do-                        42,700
  
 3.      U.P. Trade        Penalty Under             1,98,108
 
         Tax               U.P. Trade Tax Act
 
 
 
 Nature                Period to       Forum where
 of Statute            which the       dispute is
                       amount relates  pendin
   
 Punjaj Value          A.Y. 2005-06    Dy. Excise & Taxation
 Added Tax, 2005                       Commissioner (Appeals),
                                       Patial
 
 -do-                  A.Y. 2005-06    -do-
 
 U.P.Trade             A.Y. 2005-06    Assistant Commissioner 
 Tax                                   (Appeals), U.P. Trade Tax,
                                       Noida
 
 x) The Company has no accumulated losses at the end of the financial
 year. It has not incurred cash losses in the current 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 repayment of dues to the
 financial institutions or banks or debenture holders.
 
 xii) 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) In our opinion, the Company is not a chit fund/ nidhi/ mutual
 benefit fund/ society. Therefore, the provision of clause 4(xiii) of
 the Companies Act (Auditor''s Report) order, 2003 is not applicable to
 the Company.
 
 xiv) The Company is not dealing or trading in shares, securities,
 debentures and other investments. Therefore, the provision of Clause
 
 (xiv) of the Companies (Auditor''s report) order, 2003 is 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
 banks or financial institutions.
 
 xvi) According to information and explanations given to us, the Company
 has applied the term loans for the purpose for which the loans were
 raised.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we report
 that Rs.212.18 Lac raised on short term basis have been used for long
 term investments.
 
 xviii) The Company has not made any preferential allotment of shares
 during the year to parties and companies covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly,
 the provision of clause 4 (xviii) of the Companies (Auditor''s Report)
 Order, 2003 is not applicable to the Company.
 
 xix) The Company has not issued new debentures during the year covered
 by our audit. Accordingly, the provision of clause 4(xix) of Companies
 (Auditor''s Report) Order, 2003 is not applicable to the Company.
 
 xx) The Company has not raised money by way of public issue during the
 year. Accordingly, the provision of clause 4(xx)of the Companies
 (Auditor''s Report) Order, 2003 is not applicable to the Company.
 
 xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no material fraud on or by the Company has been noticed or
 reported during the course of our audit.
 
 
                                For and on behalf of B.D.Bansal & Co.
                                                Chartered Accountants
                                                ICAI Reg. No. 000621N
 
                                                (Satish Kumar Bansal)
 Place : Ludhiana                                             PARTNER
 Date : 30.05.2011                                Membership No.80324