1) We have audited the attached Balance sheet of PREMIER INDUSTRIES
 (INDIA) LIMITED,DEWAS as at 31st March,2012 and the relative Profit 
 & Loss Account and the Cash Flow Statement for the year ended on that 
 date, which we have signed under reference to this report. These 
 financial statements are the responsibility of the management of the 
 Company. 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 mis-state- ment. 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 principals used and significant estimates made
 by management, as well as evaluating the overall presentation of the
 financial statements. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3) We have obtained all the information and explana- tions which, to
 the best of our knowledge and belief, were necessary for the purpose of
 our audit.
 
 4) 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.
 
 5) The Balance Sheet and Profit & Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 6) In our opinion the Balance Sheet and the Profit & Loss Account and
 the Cash Flow Statement dealt by this report are in compliance with the
 Accounting Standards referred to in Section 211 (3c) of the Companies
 Act, 1956.
 
 7) On the basis of written representation received from ail the
 Directors of the Company as on 31st March, 2012 and the information and
 explanation as made available, we report that none of the Directors of
 the Company prima facie have any disqualification as referred to in
 Clause (g) of Sub-Section (1) of the Section 274 of the Companies Act,
 1956.
 
 8) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with and
 subject to :-
 
 i.  Note No. 8(c) in respect of non-transfer of funds to Investors
 Education and Protection Funds.
 
 ii.  Note No. 10 (Fixed Assets Schedule) regarding non-provision of
 depreciation on certain machine and regarding non-provision in accounts
 for extra shift depreciation on the amount of revaluation of fixed
 assets.
 
 iii. Note No. 33 in respect of adopting of revised AS-15 to some extent
 only.
 
 iv.  Note No. 38 regarding contingant liabilities in respect of
 non-provision of demand of Central Excise & Sales Tax.
 
 v.  Note No. 41 regarding accounts of the Company prepared on going
 concern basis.
 
 We further report that without considering item mentioned at (i),
 (iii), (iv), (v) above the effect of which is not there, had the
 observations made by us in paragraphs (ii) above been considered, the
 Loss for the year would have been Rs. 2,53,87,679 (as against the
 reported Loss of Rs.  2,33,39,799), debit balance of Profit & Loss
 Accounts would have been Rs. 44,02,18,824 (as against the reported
 figures of Rs. 43,81,70,944), and read together with other notes there
 on give the information required by the Com- pany Act, 1956 in the
 manner so required and give a true and fair view, in confirmaty with
 the accounting principles generally accepted in India.
 
 (a) In the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March,2012.
 
 (b) In the case of Profit & Loss Account of the Loss of the Company 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.
 
 As required by the Companies (Auditors''Report) order, 2003 issued by
 Central Government Of India in terms of Sub-Section (4A) of Section 227
 of the Companies Act, 1956, we further report that:
 
 i.  a) The nature of the Companie''s business/activities during the
 year was such that clause (xii),(xiii) and (xiv) of the paragraph 4 of
 the Companies (Auditors Report) Order 2003 are not applicable to the
 Com- pany
 
 ii.  a) The Company has maintained proper records show- ing full
 particulars, including quantitative details and unit wise situation of
 fixed assets.
 
 b) Physical verification of fixed assets was carried out during the
 year in accordance with the Company''s policy. In our opinion the
 frequency of verification is at reasonable intervals having regard to
 the size of the company and nature of assets. According to the infor-
 mation and explaination given to us no materials dis- crepancies were
 noticed on such verification.
 
 c) During the year, in our opinion, a substantial part of fixed assets
 has not been disposed off by the Com- pany.
 
 iii. a) The inventory of the Company has been physically verified by
 the management during the year and at the year end. In our opinion the
 frequency of verifica- tion is resonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventory
 followed by the management were found reasonable and adequate in
 relation to the size of the Company and nature of its business,
 
 c) On the basis of our examination of records of inventory, in our
 opinion, the Company has maintained proper records of inventory and
 discrepancies noticed on physical verification between the physical
 stock and the book records were not material in relation to the
 operation of the Company.
 
 iv.  a) In our opinion and according to the information and
 explanations given to us, the Company has taken loans during the year
 from two parties listed in the Register maintained under section 301 of
 the Compa- nies Act, 1956, .The outstanding balance as on 31.03.12 was
 Rs.22,06,31,004/- and the maximum balance outstanding was Rs.
 22,57,03,354/-.
 
 b) The terms & condition of such loan was not preju- dicial to the
 interest of the Company.
 
 c)In our opinion and according to the explanation given to us the
 company is regular in paying the principal and interest wherever
 applicable.
 
 (d) In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans to parties listed in
 the Register maintained under section 301 of the Companies Act, 1956,
 except has maintained a Current A/c with one of its Group Company,
 hence sub clause (iii) (b), (c) and (d) of the Order are not applicable
 in respect of loans granted.
 
 v.  According to the information and explanations given to us, there is
 an adequate internal control procedure commensurate with the size of
 the Company and na- ture of its business, for purchase of raw
 materials, stores, components, plant & machinery, equipment and other
 assets.
 
 vi.  a) Based on the Audit procedure applied by us and as per the
 information and explainations given to us the particulars of Contracts
 or arrangements referred to in Section 301 of the Act are entered in
 the register require to be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the Company has pur- chased/sold stores, raw materials,
 finished goods and components from / to and also paid rent, processing
 charges, interest to Company in which Directors are interested as
 listed in the register maintained under section 301 of the Companies
 Act, 1956, at prices which are reasonable having regards to prevailing
 market prices of such goods, materials or services or the prices at
 which transaction for similar goods, ma- terials or services have been
 made with other parties.
 
 vii. The Company has not accepted any deposit from public as defined in
 section 58-A of the Companies Act, 1956 and the rules framed thereunder
 except Inter Corpo- rate deposit from body corporates. No order has
 been passed by Company Law Board ,National Company Law Tribunal or any
 Court during the year.
 
 viii.  In our opinion, the internal audit system is reasonably
 commensurate with the size and nature of the busi- ness of the Company.
 
 ix.  We have been informed that the prescribed cost records pursuant to
 the rule made by the Central Government under section 209 (1) (d) of
 the Companies Act, 1956 are being maintained for its Soya Division.
 However we have not carried out any detailed examination of such
 accounts and records with a view to determine whether they are accurate
 or complete.
 
 x.  a) The Company has been regular in depositing during the year
 provident fund and employees state insurance dues with the appropriate
 authorities.
 
 b) According to the information and explanations given to us, no
 undisputed amount payable in respect of Income Tax, Sales Tax, Custom
 Duty,Excise Duty and Service Tax as on 31.03.12 were outstanding for a
 period of more than six months (except deferement of Sales Tax and
 Entry Tax for the year) from the date they became payable except the
 Entry Tax of Rs 1727109 /-due for earlier years and Vat Tax of Rs.
 11647041/ - due up to 30.09.2011.
 
 c) As on 31.03.12, according to records of the Company and the
 information and explanations given to us, the following are the
 particulars of dues on account of Income Tax, Excise Duty,Cess, Sales
 Tax, Service Tax,Custom Duty and Wealth tax matters that have not been
 deposited on account of any dispute:
 
 Sr. 
 No. Name of 
     the Statute      Nature of 
                      the dues          Amount  
                                       (Rs.In lacs)   Forum where
                                                      pending
 
 1 Commercial 
 Tax Levies          Sales Tax & 
                     Entry Tax         24694662/-     Commissioner of
                     Demand 
                     including                        Sales Tax
                     interest & 
                     penalty
 
 2 Central 
 Excise Act, 
 1944                Excise Duty        1118153/-     Commissioner of
                                                      Central Excise
                                                     (Appeal)
 
 xi.  a) In our opinion the company''s accumulated losses as on 31.03.12
 exceeds its net worth and it has incurred cash loss during the
 financial year ended on that date and had also incurred cash loss in
 the immediate preceding financial.
 
 b) According to the information provided by the Company, the Company is
 a Sick Industrial Company within the meaning of section 3(1)(XII) of
 the Sick Industrial Companies (Special Provision) Act, 1985 and is duly
 registered with BIFR.
 
 xii. The Company has defaulted in the repayment of dues to Financial
 Institutions. Bank and debenture holders and the period, amount of
 default and the explanations furnished by the Company are as follows:
 
 S.
 No. Name of 
     Financial        Total Default till
                      31.03.12 including          Period of Default
     Institutions
    /Bank/Others      principal amount & 
                      Interest (as per
                      revival package duly 
                      approved by AAIFR)
                     (In Rs.)
 
 1 DEBENTURE 
   HOLDERS            9901954                      F. Y. 1999-2000 
                                                   To 2011-12
 
 xiii.  According to the information and explanations given to us, the
 Company has given guarantee to Banks, the terms and conditions whereof,
 are not prejudicial to the interest of the Company.
 
 xiv. In our opinion and according to the information and explanations
 given to us, the Company has not taken any term loan during the year.
 
 xv.  Based on the information and explanations given to us and on an
 overall examination of the Balance Sheet of the Company, in our
 opinion, the funds raised on shortterm basis have prima facie been used
 for shortterm purpose only.
 
 xvi. During the year the Company has not made preferential allotment of
 shares to parties and Companies covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 xvii.  In our opinion and according to the information and explanations
 given to us, the Company has not issued any debentures during the year.
 
 xviii.  The Company has not raised any money by public issue during the
 year.
 
 xix. According to the information and explanations given to us, during
 the year, no fraud on or by the Company has been noticed or reported.
 
                                           FOR M/S M. MEHTA & CO.
 
                                           CHARTERED ACCOUNTANTS
 
                                           Firm Reg. No. 000957C
 
                                              CA: (P. R.BANDI)
 
 PLACE: INDORE                                    PARTNER
 
 DATE:31.05.2012                                (M.N0.16402)