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 the 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 Section 227(4A) 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 :

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) In our opinion, proper books of accounts as required by Law have been kept by the Company so far as it appears from our examination of these 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 accounts.

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 referred in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

(v) On the basis of the written representations received from the directors as on 31.03.2012 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 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 accounts read in conjunction with the notes and accounting policies 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 Balance Sheet of the state of affairs of the company as at 31st March, 2012;

b) In the case of the Profit and Loss Account of the LOSS 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE ON THE ACCOUNTS OF UBE INDUSTRIES LIMITED FOR THE YEAR ENDING 31ST MARCH, 2012

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification. As regards capital works in-progress, no such asset held by the company, the same will be verified by the management on completion of assets.

(c) As explained to us, no fixed assets disposed off during the year, hence the verification procedure are not applicable to the company.

(d) During the financial year, the company has capitalized the entire capital work in progress of which is belongs to Projects and Contract Division.

2. (a) The Inventories of the company have been physically verified by the Management during the year at reasonable intervals except no stocks lying with others which have been verified with reference to confirmation, certificates and others relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks has compared to book records, which in our opinion were not material, have been properly dealt with in the books of accounts.

(d) The Company has not taken any interest free unsecured loan from a party covered in the register maintained under section 301, of the Companies Act, 1956 hence the rate of interest and other terms and conditions or its repayment procedures are not applicable.

3. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls with regard to purchase of inventory, fixed assets and for the sale of goods.

4. (a) According to the information and explanations given to us as confirmed by the Company Secretary of the Company, we are of the opinion that the no transactions that are need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanation 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 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard does not arise.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public covered by the directions issued by the Reserve Bank of India and the provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under where applicable and issuance of Order by the Company Law Board in this regard does not arise.

6. As per the information and explanations given to us by the management, the Company's internal control procedures together with internal checks conducted by the management staff during the year can be considered as an internal audit system commensurate with the size and nature of its business.

7. We have broadly reviewed without making a detailed examination of the records maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed records have been made and maintained.

8. (a) According to the records of the Company and as per the information and explanations given to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, Cess and other material statutory dues, as on 31.03.2012 Rs. 0 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of Sales Tax, Customs Duty, Wealth Tax and Cess which have not been deposited on account of any dispute as on 31.03.2012 except Income Tax the details of which are as given under:

- Income Tax Liability pertaining to the assessment year 1993-1994 is Rs. 36,20,286/- and the company has preferred an appeal before the income Tax appellate Tribunal, no provision is made in this regard since the appeal is pending.

9. As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

10. According to records of the Company, that the company does not taken any loans from financial institution or bank or debenture holders, hence the repayment procedure or due or overdue or default and its verification procedure are not applicable.

11. As per 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 share, debentures and other securities to any body during this year.

12. In our opinion ,as the Company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of Clause 4(xiii) of the Companies (Audit Report) Order, 2003 are not applicable to the Company for this year.

13. According to the records of the Company, the investments made in the nature of shares in other Companies are held in the name of the Company and necessary records recording the transactions and relevant entries have been maintained. However, during the current financial year, the Company has not made any transactions of the dealing or trading in shares, securities, debentures and other investments.

14. As per the information and explanations given to us, that the company does not given any guarantees for loans taken by others from financial institutions hence the verification of interest conditions or its guarantees outstanding are not applicable.

15. According to records of the Company has not raised any term loans during the year hence its application procedure are not applicable.

16. As per the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company, we report that no long term funds raised during the year, hence its utilization procedures are not applicable.

17. As per the information and explanation given to us, during the year 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.

18. The Company has not issued any debentures during the year, which requires the creation of security.

19. During the year the Company has not made any public issues for which the management has to disclose the end use of money raised through that public issue.

20. As per the representation given by the Company and relied on by us, no fraud on or by Company has been noticed or reported during the year.

                                   for C.V.S. Balachandra Rao & Co.,
                                               Chartered Accountants
                                      Firm Registration No.: 007507S

                                              C.V.S. Balachandra Rao
                                                             Partner
                                               Membership No. 204580