1.  We have audited the attached Balance Sheet of Eveready Industries
 India Limited (the Company) as at March 31, 2011, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on thatdate, both 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.
 
 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 the 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 (Auditor''s 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.  Attention is invited to:
 
 (a) Note 3 of Schedule 17 forming part of the financial statements
 regarding amortization of brand over a period of 40 years on the basis
 of an expert opinion.
 
 (b) Note 33 of Schedule 17 of the financial statements regarding the
 status of the Company''s investments of Rs. 4,110 Lakhs in and advances
 of Rs. 1,731.73 Lakhs to its subsidiary Novener SAS and in respect of
 which no provision has been made for reasons explained therein.
 
 5.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (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 it 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 are in compliance
 with the Accounting Standards referred to in Section 211 (3C) of the
 Companies Act, 1956;
 
 (e) 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31,2011;
 
 (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.
 
 6. On the basis of the written representations received from the
 Directors as on March 31,2011 taken on record by the Board of
 Directors, none of the Directors is disqualified as on March 31,2011
 from being appointed as a director in terms of Section 274(1 )(g) of
 the Companies Act, 1956.
 
 Annexure to the Auditors''Report
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Company''s
 business/activities/result, clauses (x), (xii), (xiii), (xiv), (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 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
 explanations 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 explanations
 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 not taken any loans, secured or unsecured, from
 companies, firms or other parties listed in the Register maintained
 under Section 301 of the Companies Act, 1956.
 
 In respect of loans, secured or unsecured, granted by the Company to
 companies, firms or other parties covered in the Register under Section
 301 of the Companies Act, 1956, according to the information and
 explanations given to us:
 
 (a) At the year-end, the outstanding balances of such loans aggregated
 Rs. 1,751.43 lakhs and the maximum amount involved during the year
 wasRs. 1,753.74 lakhs.
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interests of
 the Company.
 
 (c) The receipts of principal amounts and interest have been regular.
 
 (d) There is no overdue amount outstanding at the year end.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, 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) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in
 respect of any party, the transactions (excluding loans reported in
 paragraph (iv) above) have been made at prices which are prima facie
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956.
 
 (viii) In our opinion, the Company has an adequate internal audit
 system commensurate with the size and the nature of its business.
 
 (ix) 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 dry cell batteries 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.
 
 (x) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 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 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 March 31, 2011 for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 March 31, 2011 on account of disputes are given below:
 
 Name of Statute Nature of Dues     Amount   Period to which amount 
                                             Pertains
                                  (in lacs)
 
 Sales Tax Act   Sales Tax           16.57   1995-1996 & 2007-08
 
                                      0.35   1998-1999
 
                                      0.56   2001-02
 
                                     32.31   1999-2000 to 2002-03 & 
                                             2005-2007
 
                                      3.02   2006-07
 
 Central 
 Excise Act      Excise Duty**     1496.53   1996-97 to 2002-03 & 2003-04
 
                                    201.62   1996-98
 
                                    549.15   1987-88 to 1991-92,
 
                                             1999-00 to 2006-07
 
                                     80.13   1991-92 to 1998-1999, 
                                             2000-01,
                                             2004-05 to 2005-06 & 2007-10
 
                                     31.99   1996-98
 
                                     56.43   1996-1997 to 98-99
 
                                             & 2001-02 to 2008-2009
 
                                    132.73   2001-02 to 2004-05,
                                             2009-10 to2010-11
 
                 Service Tax *#      46.48   2004-05 to 2008-09
 
                                     27.49   2004-05, 2006-07 to 2010-11
 
                                     13.72   2006-07
 
 Customs Act     Customs Duty*       31.31   2005-06
 
 Income Tax Act  Income Tax          71.59   1974-75 to 1985-86
 
                                    599.70   1991-92 to 1994-95
 
                                    125.48   1983-84 to 1990-91
 
 Name of Statute   Forum where Disputes is Pending
 
 Sales Tax Act     Commissioner of Sales Tax
 
                   Additional Commissioner of Sales Tax
 
                   Deputy Commissioner of Commercial Tax Appeals
 
                   Assistant Commissioner of Sales Tax
 
                   Joint Commissioners of Commercial Tax Appeals
 
 Central Excise 
 Act               High Court
 
                   Commissioner of Central Excise
 
                   Customs Excise & Service Tax Appellate Tribunal
 
                   Commissioner of Central Excise (Appeals)
 
                   Additional Commissioner of Central Excise
 
                   Assistant Commissioner of Central Excise
 
                   Deputy Commissioner of Central Excise
 
                   Customs Excise & Service Tax Appellate Tribunal
 
                   Commissioner of Central Excise & Service Tax
                   (Appeals)
 
                   Assistant Commissioner of Central Excise and
                   Service tax.
 
 Customs Act       Customs Excise & Service Tax Appellate Tribunal
 
 Income Tax Act    High Courts Income Tax Appellate Tribunal
 
                   High Court
 
                   Deputy Commissioner of Income Tax & High Court
 
 * Excludes interest mentioned in a few cases of the relevant orders /
 show cause notices by respective Authorities but amount not quantified.
 
 # Excludes penalty mentioned in a few cases of the relevant orders /
 show cause notices by respective Authorities but amount not quantified.
 
 (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, financial institutions.
 
 (xii) In our opinion the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks or financial
 institutions are prima facie not prejudicial to the interest of the
 Company.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained.
 
 (xiv) 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.
 
 (xv) 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. 302009E
 
                                                        K. Rajasekhar
 
                                                              Partner
 
 Hyderabad, August 10,2011                      Membership No.: 23341