1.  We have audited the attached Balance Sheet of TITAN INDUSTRIES
 LIMITED (the Company) as at 31st March, 2011, the Profit and Loss
 Account 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 fi
 nancial 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 signifi cant
 estimates made by the Management, as well as evaluating the overall fi
 nancial 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 give in the Annexure a statement on the matters
 specifi ed 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 Profit and Loss Account 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 Profit and Loss Account 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, 2011;
 
 (ii) in the case of the Profit and Loss Account, 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 fl ows 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, 2011 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualifi ed as on
 31st March, 2011 from being appointed as a director in terms of Section
 274(1)(g) of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 i) Having regard to the nature of the Company''s
 business/activities/result, clauses (x), (xii), (xiii), (xiv) and (xx)
 of CARO are not applicable.
 
 ii) In respect of fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) Most of the fixed assets were physically verifi ed during the year
 by the Management in accordance with a regular programme of verifi
 cation which, in our opinion, provides for physical verifi cation of
 all fixed assets at reasonable intervals. According to the information
 and explanation given to us, no material discrepancies were noticed on
 such verifi cation.
 
 (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.
 
 iii) In respect of its inventories:
 
 (a) As explained to us, inventories were physically verifi ed during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verifi cation 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 inventories
 and no material discrepancies were noticed on physical verifi cation.
 
 iv) (a) During the year the Company has not granted any loans, secured
 or unsecured to companies, fi rms or other parties covered in the
 Register maintained under Section 301 of the Companies Act, 1956. In
 respect of unsecured loans, granted to such a party in earlier years,
 the maximum amount involved at any time during the year and the year
 end balance is Rs. 3193.14 lakhs and Rs. 240.54 lakhs respectively. The
 balance has been fully provided as no recoveries are expected and
 therefore clauses (iii) (b) to (d) of CARO are not applicable.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, fi rms or other parties listed in the Register maintained
 under Section 301 of the Companies Act, 1956 and therefore clauses
 (iii) (f) and (g) of CARO are not applicable.
 
 v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased/sold are of a special nature and suitable alternative sources
 are not readily available for obtaining comparable quotations/ prices,
 there is an adequate internal control system commensurate with the size
 of the Company and the nature of its business with regard to purchase
 of inventory and fixed assets and for the sale of goods and services.
 During the course of our audit, we have not observed any major
 weaknesses in such internal control system.
 
 vi) In respect of the 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 need 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, and having regard to our comments in paragraph
 (v) above, the transactions have been made at prices which are prima
 facie reasonable having regard to the prevailing market prices at the
 relevant time .
 
 vii) According to the information and explanations given to us, the
 Company has not accepted any deposits from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A, 58AA and other relevant provisions of the
 Companies Act, 1956.
 
 viii) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 ix) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 in respect of the manufacture of watches and clocks 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.
 
 x) According to the information and explanations given to us in respect
 of statutory dues:
 
 (a) The Company has generally been 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, Customs duty, Excise duty, Cess and other
 material statutory dues applicable to it with the appropriate
 authorities. As at 31st March, 2011 there are no arrears of such
 undisputed statutory dues outstanding for a period of more than six
 months from the date they became payable except for Rs 3.68 lakhs
 relating to Value Added Tax and the same has been subsequently paid.
 
 (b) 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, 2011 on account of any disputes are given below:
 
 Name of Statute  Nature of     Amount  Period to 
                                        which the  Forum where Dispute 
                                                   is pending
                  the Dues     (Rs. in 
                                lakhs)  amount 
                                        relates
 
 Income-tax 
 Act, 1961       Income tax       2.39  1997-98    Bombay High Court
 
                                 25.21  2002-03    Income Tax Appellate 
                                                   Tribunal
 
                                340.76  2007-08    Dispute Resolution 
                                                   Panel
 
 Sales Tax 
 Laws            Sales tax       71.55  2000-01    The High court of 
                                                   Judicature of AP,
                                                   Hyderaad
 
                                 13.81  2000-01    Deputy Commissioner
                                                  (Appeals)
 
                                 37.71  2003-04, 
                                        2005-06 & 
                                        2008-09   Additional Commissioner
 
                                224.84  2001-03 & 
                                        2004-08   Deputy Commissioner
 
                                  5.86  2004-05   Assistant Commissioner
 
                                  8.55  2010-11  Commercial Tax Inspector
 
 The Customs 
 Act,            Customs        316.94  1989-94   Supreme Court
 
 1962            duty
 
 The Central 
 Excise          Excise duty  2,272.59  May 2005 
                                        to March 
                                          2009    Supreme Court
 Act, 1944
 
                                  0.42  July 2001
                                         to July
                                           2002   High Court
 
                                584.88 March 1987 
                                       to February Customs, Excise and 
                                                   Service Tax
                                       1990, April 
                                         1995 to 
                                          October  Appellate Tribunal
                                       1998 and 
                                        2001- 09
 
                                 3.74  March 2002 
                                       to February Commissioner (Appeals)
                                       2003 & July
                                         2007 to
                                        February 
                                          2009
 
                                 9.54  July 1999 – 
                                        November 
                                          1999    Additional Commissioner
 
                               392.56  1996 - 97, 
                                       1998-2001, Assistant Commissioner
                                       2004 - 07
 
 xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 banks and debenture holders.
 
 xii) The Company has not given any guarantee for loans taken from banks
 or financial institutions.
 
 xiii) In our opinion and according to the information and explanations
 given to us, the term loan has been applied for the purpose for which
 it was obtained.
 
 xiv) 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 investment.
 
 xv) The Company has not made any preferential allottment of shares to
 parties and companies covered in the Register maintained under Section
 301 of the Companies Act, 1956.
 
 xvi) As per the information and explanations given to us, the Company
 has created security in respect of debentures issued.
 
 xvii) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
                                          For DELOITTE HASKINS & SELLS
 
                                                 Chartered Accountants
 
                                             (Registration No. 008072S)
 
                                                         B. Ramaratnam
 
                                                               Partner
 
 Mumbai, 29th April, 2011                        (Membership No. 21209)