1.  We have audited the attached Balance Sheet of M AND B SWITCHGEARS
 LIMITED as at 31st March, 2012, the Statement of Profit and Loss 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 statements
 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), 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 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 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 appears from our examination of those
 books.
 
 c) The Balance Sheet, the Statement of Profit and Loss and 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 Cash Flow Statement dealt with by this report are prepared in
 compliance with the Accounting standards referred to in section 211
 (3C) of the Companies Act, 1956.
 
 e) On the basis of 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 Clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, said accounts, 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
 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 for
 the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the Cash Flows for the
 year ended on that date.
 
 Referred to in paragraph 3 of our report of even date.
 
 i.  In respect of its Fixed Assets :
 
 a.  The Company has maintained proper records showing full particulars
 including quantitative details and situation of its fixed assets.
 
 b.  As per the information given to us the fixed assets have been
 physically verified by the management during the year and there is a
 regular programme of verification which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its fixed
 assets. No material discrepancies were noticed on such verification.
 
 c.  During the year, the Company has not disposed off a substantial
 part of fixed assets and we are of the opinion that the going concern
 status of the company is not affected.
 
 ii.  In respect of Inventories:
 
 a.  The inventory has been physically verified during the year by the
 management. In our opinion, the frequency of verification is
 reasonable.
 
 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. As
 explained to us there were no discrepancies noticed on physical
 verification of inventory as compared to the book records.
 
 iii. a. According to the information and explanations given to us, the
 Company has not granted any loan secured or unsecured to companies,
 firms or other parties covered in the register maintained U/s 301 of
 the Companies Act, 1956. Hence the provisions of clauses iii(b), iii(c)
 and iii(d) of the Order are not applicable to the company.
 
 b. According to the information and explanations given to us, the
 Company has not taken any loans secured or unsecured from companies,
 firms or other parties covered in the register maintained U/s 301 of
 the Companies Act, 1956. Hence the provisions of clauses iii(f) and
 iii(g) of the Order are not applicable to the company.
 
 iv.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory, fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in internal control system in respect of these areas.
 
 v.  In respect of transactions covered U/s 301 of the Companies Act,
 1956.
 
 a.  According to the information and explanations given to us, we are
 of the opinion that the particulars of contract or arrangements that
 need to be entered into the register maintained U/s 301of the Companies
 Act, 1956 have been so entered.
 
 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 does not exceed during the year, the value of
 Rs. 5,00,000 or more in respect of any party.
 
 vi.  According to the information and explanations given to us, the
 Company has not accepted any deposits from public to which the
 provisions of section 58A, 58AA or any other relevant provisions of the
 Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
 1975 apply.
 
 vii. In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii.  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.
 
 ix.  a) The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education protection fund, employee''s state insurance, income
 tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess
 and other material statutory dues applicable to it.  According to the
 information and explanation given to us, no undisputed amounts payable
 in respect of income tax, sales tax, service tax, wealth tax, custom
 duty, excise duty, cess and other statutory dues were in arrears, as at
 31st March, 2012 for a period of more than six months from the date
 they became payable.
 
 b) According to the information and explanation given to us, there were
 no dues of sales tax, income tax, custom duty, wealth tax, excise duty
 and cess which have not been deposited with appropriate authorities on
 account of any dispute except detailed as under:
 
 Name of      Nature       Amount       Period to     Forum where
 Statute      of the       Involved     which the     dispute is
              disputed    (Rs. In       dispute       pending
              dues         Lacs)        relates
 
 Income Tax   Income       109.80       2006-07       Income Tax
 Act, 1961    Tax                                     Appellate Tribunal
 
 x.  In our opinion, the Company has no accumulated losses as at 31st
 March 2012 and it has not incurred any 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 or Bank.  The Company has not issued any
 debenture.
 
 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 or a nidhi/
 mutual benefit fund/society. Therefore, the provisions of clause 4
 (xiii) of the Companies (Auditor''s Report) Order, 2003 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 Report) Order,
 2003 are not applicable to the Company.
 
 xv.  According to the information and explanations given to us, and the
 representations made by the management, the Company has given guarantee
 for loans taken by others from any Bank or financial institution, the
 terms and conditions where of are not prejudicial to the interest of
 the company.
 
 xvi. In our opinion, the term loans have been applied for the purpose
 for which it was 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 no funds raised on short- term basis have been used for long-term
 investment.
 
 xviii.  According to the information and explanations given to us, the
 Company has not made preferential allotment of shares to parties or
 Companies covered in the register maintained under section 301 of the
 Act.
 
 xix. According to the information and explanations given to us, during
 the period covered by our audit report, the Company has not issued any
 debentures.
 
 xx.  The company had made an initial public offering of shares in
 October 2011 and the shares were listed on Bombay Stock Exchange and
 National Stock Exchange on 20.10.2011. We have verified the end use of
 money raised by public issues from the draft prospectus filed with
 SEBI, the offer document and as disclosed in the notes to the financial
 statements.
 
 xxi. During the course of our examination of the books of account 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 not come across any instance of
 material fraud on or by the Company, noticed or reported during the
 year, nor have we been informed of such case by the management.
 
                                         For ASHOK KHASGIWALA & CO.
 
                                             Chartered Accountants
 
                                              (Firm Reg. No. 0743C)
 
                                                   CA AVINASH BAXI
 
 Indore                                                    Partner
 
 Date: 30.05.2012                                     M.No : 79722