We have audited the attached Balance Sheet of M/s. W.S. Industries
 (India) Limited as at 31st March 2012 and also the Statement of Profit
 and Loss of the Company for the year ended on that date annexed thereto
 and Cash Flow Statement for the year ended on that date. 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.
 
 We have 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 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.
 
 As required by the Companies (Auditors Report) Order, 2003, as amended
 by the Companies (Auditors'' Report) (Amendment) Order 2004 issued by
 the Government of India in terms of Section 227(4A) of the Companies
 Act, 1956, we enclose in the annexure a statement of the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 Further to our comments in Annexure referred to above, we report that;
 
 a) We have obtained all the information and explanation which, to the
 best of our knowledge and belief, were necessary for the purpose of our
 audit.
 
 b) In our opinion, proper books of accounts as required by law have
 been kept by the company, so far as appears from our examination of the
 books.
 
 c) The balance sheet and profit and loss account dealt with by this
 report are in agreement with the books of accounts.
 
 d) In our opinion, the Balance Sheet and Profit and Loss Account read
 with Schedules and Notes thereon dealt with by this Report comply with
 the Accounting Standards referred to in Sub-Section (3C) of Section 211
 of the Companies Act 1956, so far as applicable.
 
 e) On the basis of the written representation received from the
 directors as on 31st March 2012 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 subsection (1) of Section 274 of the
 Companies Act 1956
 
 f) Subject to the above, in our opinion and to the best of our
 information and explanation given to us, they said accounts read with
 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 the accounting principles generally accepted in India:
 
 i.  In the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March 2012 and
 
 ii.  In the case of Statement of Profit and Loss of the LOSS for the
 year ended on that date.
 
 iii. In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in Paragraph (3) of our report of even date)
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details
 
 and situation of fixed assets.
 
 (b) The fixed assets of the company have been physically verified
 during the year by the management and no material discrepancies between
 the book records and the physical inventory have been noticed.
 
 (c ) During the year, the Company has not disposed off any substantial
 part of its fixed assets, affecting the going concern.
 
 (ii) (a) Physical verification of stocks of Finished Goods, Stores,
 Spare Parts and Raw materials was conducted by the management during
 the period, except materials lying with third parties from whom
 confirmation certificates have been obtained. Materials in Bond have
 been verified with the respective Bills of Entry. In our opinion, the
 frequency of verification was reasonable.
 
 (b) The procedures of physical verification of stocks followed by the
 management are reasonable and adequate, commensurate to the size of the
 company and the nature of its business.
 
 (c) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. The discrepancies noticed on verification between the
 physical stocks and the book records were not material and have been
 properly dealt with in the Books of Accounts.
 
 (iii) (a) The Company has not granted any loans, secured or unsecured
 to companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (b) The Company has taken a loan from a party covered in the register
 maintained under Section 301 of the Companies Act 1956. The maximum
 amount involved during the year and the year end balance was Rs 16.30
 Crores.
 
 (iv) In our opinion the terms and conditions are not prejudicial to the
 interest of 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 purchase of stores, raw materials
 including components, plant and machinery, equipment and other assets
 and with regard to sale of goods.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of 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 such contracts or
 arrangements entered in the Register maintained under Section 301 of
 the Companies Act 1956, have been made at prices, which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 (vi) As explained to us, the company has complied with the Provisions
 of Section 58A of the Companies Act, 1956.
 
 (vii) A firm of Chartered Accountants is appointed as Internal Auditors
 of the company for the period under review. !n our opinion, the company
 has internal audit system commensurate with its size and nature of its
 business.
 
 (viii) (a) The Company is regular in depositing its 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 any other
 statutory dues with the appropriate authorities.
 
 (b) At the end of the financial year there were no dues of sales Tax,
 Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess
 which have not been deposited on account of any dispute except as
 follows:
 
                                          Amount        Forum where
 Name of the statute    Nature of dues  ( Rs in Lakhs )  dispute is
                                                        pending
 
 Income Tax             Income Tax        4.00          High Court
 
 Income Tax             Income Tax       33.18          CIT, Appeals
 
 (ix) The Company has not defaulted in repayment of dues to Financial
 Institutions or Banks, except the following:-
 
 (a) an amount ofRs 245.30 Lakhs has fallen due on 31st March 2012 and
 since been paid.
 
 (b) an amount of Rs 77.80 Lakhs has fallen due on 20th March 2012.
 
 (x) The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xi) According to the information and explanations give to us, the
 company has not given any guarantee for loans taken by others from
 Banks and Financial Institutions.
 
 (xii) The term loans availed during the year have been utilized for the
 purpose for which they have been raised.
 
 (xiii) The Company has incurred cash losses in the financial year under
 report, however, no cash loss has been incurred in the immediately
 preceding financial year.
 
 (xiv) The funds raised by the Company on short term basis have not been
 used for long term investments.
 
 (xv) 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.
 
 (xvi) No fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
 (xvii) Other provisions of Companies (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 are not applicable.
 
                                               For M/S. S. VISWANATHAN
 
                                                 Chartered Accountants 
 
                                                Firm Regn. No. 004770S
 
                                                   CHELLA K SRINIVASAN
 
 Chennai                                                       PARTNER
 
 31st May 2012                                  Membership No.: 023305