THE INDUSTRIAL & PRUDENTIAL INVESTMENT COMPANY LIMITED

Auditors Report TO THE MEMBERS OF THE INDUSTRIAL & PRUDENTIAL INVESTMENT COMPANY LIMITED
1. We have audited the attached Balance Sheet of THE INDUSTRIAL & PRUDENTIAL INVESTMENT COMPANY LIMITED, as at 31st March 2011, 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 the 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report 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 those 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 prescribed by the Companies (Accounting Standards) Rules, 2006 as per sub-section (3C) of section 211 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, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together 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 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 Flow for the year ended on that date. For N. M. RAIJI & CO., Chartered Accountants Firm Registration No.: 108296W Place : Mumbai Date : 23rd May, 2011 CA. Y. N. THAKKAR Partner Membership No: 033329 11

THE INDUSTRIAL & PRUDENTIAL INVESTMENT COMPANY LIMITED

Annexure referred to in paragraph 3 of our report of even date
Clause No. 4 (ii), 4(viii), 4(x), 4(xvi) of the Order is not applicable to the Company. i. a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. b) The fixed assets of the Company have been physically verified by the management during the year. No material discrepancies were noticed on such verification as compared with the book records. c) The Company has not disposed off substantial part of fixed asset during the year. ii. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly subclause (b),(c),(d), (f) and (g) of clause 4(iii) of the Order is not applicable. iii. In our opinion, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system. iv. There are no particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained in pursuance of section 301. Accordingly, sub-clause (b) of clause 4(v) of the Order is not applicable. v. The Company has not accepted any deposits from the public. vi. The Company does not have an internal audit system. Considering the nature and scale of operations of the Company and in the context of the close supervision exercised by the Board of Directors, we are informed that an internal audit system is not considered necessary at present. vii. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed applicable statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, custom duty, excise, cess and any other statutory dues applicable to it. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of undisputed statutory dues which remained outstanding as at 31 March, 2011 for a period of more than six months from the date they became payable. (b) According to the records made available to us and the information and explanations given by the management, there are no dues of sales tax / income tax /custom duty / wealth tax / service tax / excise duty / cess that have not been deposited on account of any dispute.
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THE INDUSTRIAL & PRUDENTIAL INVESTMENT COMPANY LIMITED

Annexure referred to in paragraph 3 of our report of even date
viii. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately preceding such financial year. ix. The company has no dues payable to banks, financial institutions, or debenture holders. Accordingly, provisions of clause 4(xi) of the Order is not applicable to the company. 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. The Company is not a chit / nidhi / mutual benefit fund/society. xii. Based on our examination of the records and evaluation of the related internal controls, we are of the opinion that in respect of current investments, wherein the Company is dealing in shares, securities and other investments, proper records have been maintained of those transactions and contracts and entries therein have generally been made on timely basis. The Company has held the investments in its own name except as permissible under section 49 of theAct. xiii. The Company has not given any guarantee for loans taken by others from banks or financial institutions. xiv. During the year the Company has not raised any funds on short term basis. 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 Act. xvi. During the year the Company has not issued any debentures. xvii. The Company has not raised any money by public issue during the year. xviii. According to the information and explanations given to us, no fraud on or by the Company, has been noticed or reported during the course of our audit.

For N. M. RAIJI & CO., Chartered Accountants Firm Registration No. 108296W Place : Mumbai Date : 23rd May, 2011 CA. Y. N. THAKKAR Partner Membership No: 33329 13