Amara Raja Batteries

We have audited the attached Balance Sheet of Amara Raja Batteries
 Limited as at March 31, 2009, its Profit and Loss Account for the year
 ended on that date and its Cash Flow Statement for the year ended on
 that date annexed thereto.  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.
 
 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.
 
 As required by the Companies (Auditors Report) Order, 2003 issued by
 the Central Government of India in terms of sub- section (4A) of
 Section 227 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.
 
 Further to our comments in the Annexure referred to above, we report
 that:
 
 1.  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;
 
 2.  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;
 
 3.  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;
 
 4.  In our opinion, the Balance Sheet, the Profit and Loss Account, and
 the Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section(3C) of Section 211 of
 the Companies Act, 1956;
 
 5.  On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2009 from being appointed as a director in terms of clause
 (g) of subsection (1) of Section 274 of the Companies Act, 1956;
 
 6.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the statement
 of Accounting Policies and Notes forming part of the 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;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009;
 
 b) in the case of the Profit and Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Annexure to the Auditors Report
 
 The Annexure referred to in the Auditors Report to the members of
 Amara Raja Batteries Limited for the year ended March 31, 2009. We
 report that
 
 1.  a) The Company has maintained proper records showing
 
 full particulars including quantitative details and situation of fixed
 assets.
 
 b) According to the information and explanations furnished to us, the
 Company has physically verified part of its fixed assets during the
 year. However, the Company has adopted a phased programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. The discrepancies
 noticed on such verification, which were not material, have been
 properly dealt with in the books of account.
 
 c) According to the information and explanations furnished to us, the
 Company has not disposed of a substantial part of its fixed assets
 during the year.
 
 2.  a) According to the information and explanations
 
 furnished to us, the Company has physically verified its inventories
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion, 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) According to the information furnished to us, the Company is
 maintaining proper records of inventory.  The discrepancies noticed on
 verification between the physical stocks and the book records, which
 were not material, have been properly dealt with in the books of
 account.
 
 3.  a) According to the information and explanations
 
 furnished to us, the Company has not granted any loans, secured or
 unsecured to companies, firms or other parties whose particulars are
 recorded in the register maintained under section 301 of the Companies
 Act, 1956. Accordingly the provisions of clauses 4(iii)(b), 4(iii)(c)
 and 4(iii)(d) of the order are not applicable.
 
 b) According to the information and explanations furnished to us, the
 Company has not taken any loans, secured or unsecured from companies,
 firms or other parties whose particulars are recorded in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly
 the provisions of clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the
 order are not applicable.
 
 4.  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 purchases of inventory, fixed assets and for the sale of goods and
 services. Further during the course of our audit, we have not come
 across any instances of major weaknesses in internal control that in
 our opinion, require correction.
 
 5.  a) Based on the information and explanations given to us,
 
 we are of the opinion that the transactions that are required to be
 entered in the register maintained under Section 301 of Companies Act,
 1956 have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions which have been entered into, pursuant to
 contracts that have been entered in the register maintained under
 Section 301 of the Companies Act, 1956, have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 6.  The Company has not accepted any deposits from the public and
 consequently, the directives issued by Reserve Bank of India and the
 provisions of Sections 58A and 58AA or any other relevant provisions of
 the Act and the rules framed there under are not applicable. According
 to the information furnished to us, no order has been passed on the
 Company by the Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal for non
 compliance with the provisions of Sections 58A and 58AA of the
 Companies Act, 1956.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account and records
 maintained by the Company pursuant to the Rules made by the Central
 Government for the maintenance of cost records under Section 209(1 )(d)
 of the Companies Act, 1956 and we are of the opinion that prima facie
 the prescribed accounts and records have been made and maintained.
 However, we have not carried out a detailed audit of the same.
 
 9.  a) According to the information furnished to us, the
 
 Company is regular in depositing with appropriate authorities, 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 applicable to it. There were no undisputed
 statutory dues in arrears as at the date of the Balance Sheet under
 report, for a period of more than six months from the date they became
 payable.
 
 b) According to the information furnished to us, the following amounts
 of Sales Tax have been disputed by the Company, and hence were not
 remitted to the authorities concerned at the date of the Balance Sheet
 under report.
 
 Name of the Statue    Nature of the dues     Amount (Rs. in Million>
 
 Central Sales Tax      Central Sales Tax              0.454
 Act, 1956
 
 Central Sales Tax      Central Sales Tax              0.930
 Act, 1956
 
 Central Sales Tax      Central Sales Tax              0.363
 Act, 1956
 
 Kerala General Sales   Kerala Sales Tax               0.144
 Tax Act, 1963
 
 Central Sales Tax      Central Sales Tax              0.719
 Act, 1956
 
 Delhi Sales Tax        Delhi Sales Tax                0.291
 Act 1975
 
 Central Sales Tax      Central Sales Tax              5.485
 Act, 1956
 
 Central Sales Tax      Central Sales Tax              0.020
 Act, 1956
 
 
 Period to which the                 Forum where the
 amount relates                      dispute is pending
 
 1996-97, 1997-98                 A.P. STAT, Hyderabad
 2004-05                          Dy. Commissioner,
                                  Kolkata
 2003-04                          Dy. Commissioner,
                                  Kochi
 
 2003-04                          Dy. Commissioner,
                                  Kochi
 2004-05                          Dy. Commissioner,
                                  Delhi
 2004-05                          Dy. Commissioner,
                                  Delhi
 
 2004-05                          J.C (Appeals),
                                  Ghaziabad
 2002-03                          Sales Tax Tribunal,
                                  Patna
 
 10.  According to the information and explanations furnished to us, the
 Company has no accumulated losses at the end of the financial year and
 it has not incurred cash losses either during the financial year
 covered by our audit or in the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explanations
 furnished to us by the Company, there were no defaults in repayment of
 its dues to financial institutions and banks at the date of the Balance
 Sheet. The Company has not issued any debentures.
 
 12.  According to the information and explanation given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion and according to the information and explanations
 furnished to us, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society and hence the requirements of clause 4(xiii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 Company during the year under report.
 
 14.  According to the information furnished to us, the Company is not
 dealing in or trading in shares, securities, debentures and other
 investments. Accordingly, the requirements of clause 4(xiv) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions.
 
 16.  According to the information and explanations given to us, the
 term loans obtained by the Company during the year were applied for the
 purpose for which they were obtained.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we report
 that funds raised on short-term basis have not been used for long-term
 investment during the year under report.
 
 18.  According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year to parties and companies covered in the register maintained under
 Section 301 of the Act, or to any others.
 
 19.  According to the information and explanations given to us, the
 Company has not issued any debentures during the year under report.
 
 20.  The Company has not raised any money through public issues during
 the year. Accordingly, the provisions of clause 4(xx) of the Companies
 (Auditors Report) Order,2003 are not applicable to the Company during
 the year under report.
 
 21.  According to the information and explanations given to us, and
 based on the audit procedures generally adopted by us, we report that,
 during the year, no fraud on or by the Company, has been noticed or
 reported that is either significant or could have caused a material
 misstatement in the financial statements.
 
 For E. Phalguna Kumar & Co.,               For Chevuturi Associates
 Chartered Accountants                         Chartered Accountants
 
 E. Phalguna Kumar                           S. Gopala Krishna Murthy
 Partner                                                   Proprietor
 
 (ICAI Memb. No: 20278)                        (ICAI Memb. No: 29248)
 
 Hyderabad
 June 01, 2009