1.  We have audited the attached Balance Sheet of ALSTOM Projects India
 Limited (the Company) as at 31 March 2011, and the related Profit and
 Loss Account and Cash Flow Statement for the year ended on that date
 annexed thereto, which we have signed under reference to this report.
 These financial statements are the responsibility of the Companys
 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 (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956
 of India (the Act) 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 give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (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 appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) 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 to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the directors
 and taken on record by the Board of Directors, none of the directors is
 disqualified as on 31 March 2011 from being appointed as a director in
 terms of clause (g) of sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, 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 31 March 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 Annexure to Auditors Report
 
 Referred to in paragraph 3 of the Auditors report of even date to the
 members of ALSTOM Projects India Limited on the financial statements
 for the year ended 31 March 2011
 
 (i) (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover all the items over a
 period of three years which, in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the Management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 (ii) (a) The inventory has been physically verified by the Management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 (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 Act. Accordingly clauses (iii) (b), (c) & (d)
 of paragraph 4 of the Order are not applicable in the case of the
 company in the current year.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act. Accordingly clauses (iii) (f) & (g) of
 paragraph 4 of the Order are not applicable in the case of the company
 in the current year.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, no major weakness have been noticed or
 reported.
 
 (v) According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year to be entered in the register required to be
 maintained under that Section. Accordingly, the question of commenting
 on transactions made in pursuance of such contracts or arrangements
 does not arise.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii)The Central Government of India has not prescribed the
 maintenance of cost records under clause (d) of sub-section (1) of
 Section 209 of the Act for any of the products of the Company.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the 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
 as applicable with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
 duty and cess as at 31 March 2011 which have not been deposited on
 account of a dispute, are as follows:
 
 Name of the Statute      Nature of dues             Amount in 
                                                     (Rs.000)
 
 Andhra Pradesh General 
 Sales Tax (GST),         Works Contract Tax on       520,219
 1957; Andhra Pradesh 
 Value Added Tax          Inter State Sales 
 (VAT), 2005 and Central 
 Sales Tax (CST) Act, 1956
 
 Central Excise Act, 1944 Excise duty and penalty     216,962
 
 Central Sales Tax 
 Act, 1956                Central Sales Tax Penalty    14,185
 
 Bombay Sales Tax 
 Act, 1957 and Central    Works Contract Tax on        10,211
 Sales Tax Act, 1956      Inter State Sales
 
 Central Excise Act, 1944 Excise duty and penalty      21,424
 
 Orissa General Sales 
 Tax Act,1947 and         Works Contract Tax on         3,603
 Central Sales Tax 
 Act, 1956                Inter State Sales
 
 Tamil Nadu General 
 Sales Tax Act,1959       Sales Tax and Penalty         1,752
 
 Income Tax Act, 1961     Income Tax and Interest      62,313
 
 
 Name of the Statute      Period to which the     Forum where the
                          amount relates          dispute is 
                                                  pending 
 
 Andhra Pradesh General 
 Sales Tax (GST), 1957;        2004-2008            High Court
 Andhra Pradesh Value 
 Added Tax (VAT), 2005
 and Central Sales Tax (CST
 Act, 1956
 
 
 Central Excise Act, 1944      1979-2008            CESTAT
 
 Central Sales Tax Act, 1956   1993-1999            First/ Second
                                                    appellate authority
 
 Bombay Sales Tax Act, 1957    1984-1992            First/ Second
 and Central Sales Tax                              appellate authority
 Act, 1956
 
 
 Central Excise Act, 1944      2007-2008            CESTAT
 
 Orissa General Sales Tax      1992-1997            HIGH COURT
 Act,1947 and Central Sales 
 Tax Act, 1956
 
 Tamil Nadu General Sales      2004-2005            High Court
 Tax Act,1959
 
 Income Tax Act, 1961         A.Y. 2007-2008        CIT (Appeals)
 
 
 (x) The Company has no accumulated losses as at 31 March 2011 and
 it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 (xi) According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii)The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/ societies are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 (xvi)The Company has not obtained any term loans.
 
 (xvii) On the basis of an overall examination of the balance sheet of
 the Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 (xviii) 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 during the year.
 
 (xix) The Company has not issued any debentures during the year and
 there are no debentures outstanding at the year-end.
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the Management.
 
 
                                      For Price Waterhouse
                                      Firm Registration Number: 012754N
                                      Chartered Accountants
 
                                      V. Nijhawan
                                      Partner
                                      Membership Number: F-87228
 
 Place: Noida 
 Date : 25 April 2011