We have audited the attached balance sheet of Britannia Industries
 Limited (the Company) as at 31 March 2011, the profit and loss account
 and the cash flow statement for the year ended on that date annexed
 thereto.  These fnancial statements are the responsibility of the
 Companys Management. Our responsibility is to express an opinion on
 these fnancial statements based on our audit.
 
 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 fnancial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the fnancial statements.  An audit also includes
 assessing the accounting principles used and signifcant estimates made
 by Management, as well as evaluating the overall fnancial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditors Report) Order, 2003, as
 amended, issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act),
 we enclose in the Annexure a statement on the matters specifed in
 paragraphs 4 and 5 of the said Order.
 
 Further to our comments in the Annexure referred to 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, the profit and loss account and the cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 (d) 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 Act;
 
 (e) on the basis of written representations received from the
 directors, as at 31 March 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualifed as at 31
 March 2011 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act on the said date;
 
 (f) 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 Act in the manner so required 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 of the
 Company for the year ended on that date; and
 
 (iii) 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
 
 Annexure referred to in our Report to the Members of Britannia
 Industries Limited (the Company) for the year ended 31 March 2011. We
 report that:
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a regular programme of physical verifcation of its
 fixed assets by which all fixed assets are verifed in a phased manner
 over a period of three years. In our opinion, this periodicity of
 physical verifcation is reasonable having regard to the size of the
 Company and the nature of its assets. Pursuant to the programme, a
 portion of fixed assets have been physically verifed during the year and
 no material discrepancies were observed on such verifcation.
 
 (c) Fixed assets disposed off during the year were not substantial, and
 therefore, do not affect the going concern assumption.
 
 (ii) (a) The inventory, except goods-in-transit and stocks lying with
 third parties, has been physically verifed by the Management during the
 year. In our opinion, the frequency of such verifcation is reasonable.
 For stocks lying with third parties at the year-end, written
 confrmations have been obtained by the Management.
 
 (b) The procedures for physical verifcation 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 is maintaining proper records of inventories. The
 discrepancies noticed on verifcation between the physical stocks and
 the book records were not material.
 
 (iii) (a) The Company has granted unsecured loans to two companies
 covered in the register maintained under Section 301 of the Companies
 Act, 1956 (the Act). The maximum amount outstanding during the year
 was Rs. 1,080,224 thousands and the year-end balance of such loan was Rs.
 12,278 thousands. The Company has not granted any other secured or
 unsecured loans to companies/ frms/other parties listed in the register
 maintained under Section 301 of the Act.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 on which the aforesaid loan has been granted to these companies, is
 not, prima facie, prejudicial to the interest of the Company.
 
 (c) In case of loans granted to companies listed in the register
 maintained under Section 301, the loans are repayable on demand and the
 borrowers have been regular in repayment of principal amount and
 interest as demanded.
 
 (d) There is no overdue amount of more than Rupees one lakh in respect
 of aforesaid loan
 
 given to the companies listed in the register maintained under Section
 301 of the Act.
 
 (e) The Company has not taken any loans, secured or unsecured from
 companies, frms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 (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 with regard
 to purchase of inventories and fixed assets and with regard to the sale
 of goods and services. We have not observed any major weaknesses in the
 internal control system during the course of the audit.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion, and according to the information and explanations
 given to us, the transactions made in pursuance of contracts and
 arrangements referred to in (a) above and exceeding the value of Rs. 5
 lakh with each party during the year have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vi) The Company has not accepted any deposits from the public during
 the year.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the 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 manufactured by the
 Company.
 
 (ix) (a) According to the information and explanations given to us and
 on the basis of our examination of the records of the Company, amounts
 deducted/accrued in the books of account in respect of 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 have been regularly deposited during the year
 by the Company with the appropriate authorities.
 
 There are no dues on account of Cess under Section 441A of the Act
 since the date from which the aforesaid section comes into force has
 not yet been notifed by the Central Government of India.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of 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 were in arrears as at 31 March 2011 for a
 period of more than six months from the date they became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of Wealth tax, Customs duty and Cess which have not been
 deposited with the appropriate authorities on account of any dispute.
 The particulars of dues of Income-tax, Sales-tax, Service tax and
 Excise duty dues as at 31 March 2011 which have not been deposited on
 account of disputes are as follows:
 
 Statute/Nature of   Amount (Rs.)   Period to 
                                   which      Forum where the dispute is
                                                      pending
 dues                            the amount
                                   relates*
 
 Excise duty
 (including          12,792,532    1998-2001   Supreme court
 service tax)
 
                     26,452,708    1994-2007   High court
 
                    253,759,761    1980-2010   Tribunal/CESTAT
 
                    418,928,063    1991-2011   Appellate Authority up to 
                                               Commissioners level
 
 Sales tax / Value   47,724,543    2007-2010   Supreme court
 added tax
 
                     77,545,789    1989-2010   High court
 
                     30,524,318    1996-2010   Tribunal
 
                    225,265,297    1980-2010   Appellate Authority up to 
                                               Commissioners level
 
 Income tax         299,595,205    1992-2004   High court
 
                      9,178,646    1990-1992   Tribunal
 
                     16,846,143    2004-2008   Appellate Authority up to 
                                               Commissioners level
 
 *The amounts disclosed are net of payments and include interest and
 penalties, wherever applicable.
 
 (x) The Company does not have any accumulated losses at the end of the
 fnancial year and has not incurred cash losses in the fnancial year and
 in the immediately preceding fnancial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 banks or debenture holders. The Company did not have any outstanding
 dues to any fnancial institutions.
 
 (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) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund/nidhi/mutual beneft
 fund/society.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for loans taken by others from banks or fnancial
 institutions are not prejudicial to the interest of the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans taken by the Company have been applied for
 the purpose for which they were raised.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we are of
 the opinion that the funds raised on short-term basis have not been
 used for long-term investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to companies/frms/parties covered in the register maintained under
 Section 301 of the Act.
 
 (xix) According to the information and explanations given to us, the
 Company has created security or charge in respect of bonus debentures
 issued and outstanding at the year end.
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company during the year has been noticed or reported
 during the course of our audit.
 
                                                        for B S R & Co.
 
                                                 Chartered Accountants
 
                                     Firm registration number: 101248W
 
                                                   Natrajh Ramakrishna
 Place : Mumbai                                                Partner
 
 Date : 27 May 2011                           Membership number: 32815