1.  We have audited the attached Balance Sheet of AREVA T&D India
 Limited (the Company) as at December 31,2010, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date both 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.
 
 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 misstatements.  An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 (CARO)
 issued by the Central Government 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 in paragraph 3
 above, we report as follows:
 
 (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 it 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, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211 (3C) of the
 Companies Act, 1956;
 
 (v) in our opinion and to the best of our information and according to
 the explanations given to us, the said 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 December31,2010;
 
 (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.
 
 5. On the basis of written representations received from the Directors
 as on December 31, 2010 taken on record by the Board of Directors, none
 of the Directors is disqualified as on December 31, 2010 from being
 appointed as a director in terms of Section 274 (1) (g) of the
 Companies Act 1956.
 
 (i) Having regard to the nature of the Companys
 business/activities/result, clauses (vi), (x), (xii), (xiii), (xiv),
 (xv), (xvi), (xviii), (xix) and (xx) of CARO are not applicable.
 
 (ii) In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventories:
 
 a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) 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 with regard
 to purchases of inventory and fixed assets and the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (vi) Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that there are no contracts or arrangements that need to be
 entered into the register maintained under Section 301 of the Companies
 Act, 1956.
 
 (vii) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (viii) We have broadly reviewed the books of account 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 in respect of manufacture of power transformers and are of
 the opinion that prima facie the prescribed accounts and records have
 been made and maintained. We have, however, not made a detailed
 examination of the records with a view to determining whether they are
 accurate or complete. To the best of our knowledge and according to the
 information and explanations given to us, the Central Government has
 not prescribed the maintenance of cost records for any other product of
 the Company.
 
 (ix) According to the information and explanations given to us in
 respect of statutory dues:
 
 a) The Company has generally been regular in depositing undisputed
 statutory dues, including Provident Fund, Investor Education and
 Protection Fund, Employees State Insurance, Income-tax, Sales Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other
 material statutory dues applicable to it with the appropriate
 authorities.
 
 b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at December 31,2010 for a period of more than six
 months from the date they became payable.
 
 c) According to the information and explanations given to us, there are
 no dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
 Excise Duty and cess which have not been deposited as on December
 31,2010, with the appropriate authorities on account of disputes except
 for dues referred to in note 22 (b) to (f) to the financial statements.
 
 (x) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks.
 
 (xi) In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet, we
 report that funds raised on short- term basis have not been used during
 the year for long- term investment.
 
 (xii) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
 
 
                                           For DELOITTE HASKINS & SELLS
                                                  Chartered Accountants
                                                Registration No.008072S
 
                                                Bhavani Balasubramanian
                                                                Partner
                                                   Membership No. 22156
 
 New Delhi
 February 25, 2011