We have audited the attached balance sheet of Britannia Industries
 Limited (''the Company'') as at 31 March 2012, the statement of profit
 and loss and the cash flow statement for the year ended on that date
 annexed thereto. These financial statements are the responsibility of
 the Company''s Management. Our responsibility is to express an opinion
 on these financial 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 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 (Auditor''s 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 specified 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 purpose 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 statement of profit and loss 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 statement of profit and loss
 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 2012 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as at
 31 March 2012 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; and
 
 (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 2012;
 
 (ii) in the case of the statement of profit and loss, 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 2012. 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 verification of its
 fixed assets by which all fixed assets are verified in a phased manner
 over a period of three years. In our opinion, this periodicity of
 physical verification 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 verified during the year
 and no material discrepancies were observed on such verification.
 
 (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 verified by the Management during
 the year. In our opinion, the frequency of such verification is
 reasonable. For stocks lying with third parties at the year-end,
 written confirmations have been obtained by the Management.
 
 (b) The procedures for 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 is maintaining proper records of inventories. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) (a) The Company has granted unsecured loan to one company covered
 in the register maintained under Section 301 of the Companies Act, 1956
 (''the Act''). The maximum amount outstanding during the year aggregated
 Rs. 100 crores and the year-end balances of such loans aggregated Rs. Nil.
 The Company has not granted any other secured or unsecured loans to any
 other companies / firms / 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 above unsecured loan has been granted to this company, is
 not, prima facie, prejudicial to the interest of the Company.
 
 (c) In case of loan granted to the company listed in the register
 maintained under Section 301, the loan is repayable on demand and the
 borrower has been regular in repayment of principal amount and interest
 as demanded.
 
 (d) There is no overdue amount of more than Rs. 1 lakh in respect of
 above loan given to the company listed in the register maintained under
 Section 301 of the Act.
 
 (e) 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.
 
 (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 except for certain services which are for Company''s
 specialised requirements and for which suitable alternative sources are
 not available to obtain comparable quotations. However, on the basis of
 information and explanations provided, the same appear reasonable.
 
 (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)We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules prescribed by the Central Government for
 maintenance of cost records under Section 209(1)(d) of the Act in
 respect of the products manufactured by the Company and are of the
 opinion that prima facie, the prescribed accounts and records have been
 made and maintained. However, we have not made a detailed examination
 of the records.
 
 (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 notified 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 2012 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 as at 31 March 2012 which have not been deposited on
 account of disputes are as follows:
 
 Statute / 
 Nature of dues    Amount 
                    (Rs.)     Period to 
                            which the   Forum where the dispute is 
                                                pending
                            amount
                            relates *
 
 Excise duty 
 (including    12,792,532   1998-2001   Supreme Court
 service tax)
 
               27,289,266   1994-2007   High Court
 
              140,019,199   1980-2010   Tribunal / CESTAT
 
              118,739,293   1991-2012   Appellate Authority up to  
                                        Commissioner''s level
 
 Sales tax / 
 Value added   62,581,739   1998-2012   Supreme Court
 tax
 
               88,703,374   1989-2010   High Court
 
               32,665,900   1996-2012   Tribunal
 
              243,728,972   1989-2012   Appellate Authority up to 
                                        Commissioner''s level
 
 Income tax   299,595,205   1992-2002   High Court
 
                9,178,646   1990-1992   Tribunal
 
               16,846,143   2004-2008   Appellate Authority up to
                                        Commissioner''s 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
 financial year and has not incurred cash losses in the financial year
 and in the immediately preceding financial 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 financial 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 benefit
 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 financial
 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 / firms / 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
 material 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: 28 May 2012                      Membership number: 32815