1.  We have audited the attached Balance Sheet of Greaves Cotton
 Limited, (the Company) as at 31 March 2011, and also the Profit and
 Loss Account and the Cash Flow Statement for the nine months period
 ended on that date annexed there-to (collectively referred as the
 financial statements). 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 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.
 
 3. As required by the Companies (Auditors Report) Order,
 
 2003 (the Order) (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 Order.
 
 4.  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 and proper returns adequate
 for the purposes of our audit have been received from the branch not
 visited by us.  The Branch Auditors Report have been forwarded to us
 and have been appropriately dealt with;
 
 c.  The financial statements dealt with by this report are in agreement
 with the books of account and with the audited returns from the branch;
 
 d.  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 disqualified 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;
 
 e.  In our opinion and to the best of our information and according to
 the explanations given to us, the financial statements dealt with by
 this report comply with the accounting standards referred to in
 sub-section (3C) of section 211 of the Act and the Rules framed there
 under and 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, in the case of:
 
 i) the Balance Sheet, of the state of affairs of the Company as at 31
 March 2011;
 
 ii) the Profit and Loss Account, of the profit for the nine months
 period ended on that date; and
 
 iii) the Cash Flow Statement, of the cash flows for the nine months
 period ended on that date.
 
 
 ANNEXURE TO THE AUDITORS REPORT
 of even date to the members of Greaves Cotton Limited, on the financial
 statements for the nine months period ended 31 March 2011 (the
 period)
 
 Based on the audit procedures performed for the purpose of reporting a
 true and fair view on the financial statements of the Company and
 taking into consideration the information and explanations given to us
 and the books of account and other records examined by us in the normal
 course of audit, 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 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. No material discrepancies were noticed on
 such verification.
 
 (c) In our opinion, a substantial part of fixed assets has not been
 disposed off during the period.
 
 (ii) (a) The inventory has been physically verified during the period
 by the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventory 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 inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) The Company has not granted any loan, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. Accordingly, the provisions of clauses
 4(iii)(b) to (d) of the Order are not applicable.
 
 (b) 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. Accordingly, the provisions of clauses
 4(iii)(f) and 4(iii)(g) of the Order are not applicable.
 
 (iv) In our opinion, there is an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, no major
 weakness has been noticed in the aforesaid internal control system.
 
 (v) (a) In our opinion, the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Act have been so entered.
 
 (b) In our opinion, the transactions made in pursuance of such
 contracts or arrangements and exceeding the value of rupees five lakhs
 in respect of any party during the period have been made at prices
 which are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) In our opinion, the Company has complied with the provisions of
 sections 58A and 58AA and other relevant provisions of the Act and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. No order has been passed by the
 Company Law Board or National Company Law Tribunal or Reserve Bank of
 India or any Court or any other Tribunal in this regard.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its 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 under
 section 209 (1)(d) of the Act for the maintenance of cost records in
 respect of Companys products 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 with a
 view to determine whether they are accurate or complete.
 
 (ix) (a) The Company is regular in depositing 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,
 as applicable, with the appropriate authorities. Further, no undisputed
 amounts payable in respect thereof were outstanding at the period end
 for a period of more than six months from the date they become payable.
 
 (b) The dues outstanding in respect of sales tax, income tax, customs
 duty, wealth tax, excise duty, cess on account of any dispute, are as
 follows:
 
 Name of the statute    Nature of dues     Amount       Period to which
                                           (Rs. crore)    the amount
                                                             relates
                                                        (financial year)
 
 Central Sales Tax      Non submission of     0.02          1992-93
 Act, 1956 and Local    forms, interest and 
 Sales Tax Acts         other matters
 
                                              0.34          1996-97
 
                                                            2002-03 
 
                                                            2005-06 
 
                                                            2007-08
 
                                              0.20          2001-02
 
                                              1.31          1999-00 
 
                                                            1994-95 
      
                                                            2000-01 
 
                                                            2001-02 
 
                                                            2002-03 
 
                                                            2004-05
 
                                              0.05          2002-03
 
                                              0.42          2003-04 
 
                                                                & 
 
                                                            2004-05
 
                                              0.77          1991-92 
 
                                                            1999-00 
  
                                                            2000-01
 
                                              0.44          1992-93 
 
                                                            1997-98 
 
                                                            1998-99
 
                                              0.09          2003-04
 
                                              0.40          2008-09
 
                                                               to 
 
                                                            2010-11 
 
 Central Excise Act,    Disallowance of       0.03          1996-97
 1944                   exemption
 
 Central Excise         Penalty for           0.62          1993-94
 Rules, 1944            incorrect valuation                    to
 
                                                            1996-97 
 
 Central Excise Act,    Disallowance of       0.25          1991-92
 1944                   input credit and                    1996-97
                        penalty 
 
 Income Tax Act,        Minimum               2.84          2003-04
 1961                   Alternate Tax
 
 
 
 Name of the statute    Forum where dispute is pending
 
 Central Sales Tax      Additional Commissioner (Appeals) 
 Act, 1956 and Loacl
 Sales Tax Acts
 
                        Additional Commissioner (Appeals)
 
                        Revision Board 
 
                        Appellate Tribunal
 
                        High Court 
 
                        Revision Board
 
                        Assessing Officer
 
                        Revision Board
 
                        Joint Commissioner of Sales Tax
                        (Appeals)
 
                        Supreme Court
 
                        Deputy Commissioner (Appeals)
 
                        Commissioner of Central Excise (Appeals)
 
                        High Court 
 
                        Commissioner (Appeals)
 
 
 (x) In our opinion, the Company has no accumulated losses at the end of
 the financial year and it has not incurred cash losses in the current
 period and the immediately preceding financial year.
 
 (xi) In our opinion, the Company has not defaulted in repayment of dues
 to a financial institution or a bank during the period. The Company has
 no dues payable to debenture holders during the period.
 
 (xii) In our opinion, the Company has not granted any loans and
 advances on the basis of security by way of pledge of
 
 shares, debentures and other securities. Accordingly, the provisions of
 clause 4(xii) of the Order are not applicable.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Accordingly, the provisions of clause 4(xiii) of
 the Order are not applicable.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable.
 
 (xv) In our opinion, the terms and conditions on which the Company has
 given guarantee for loans taken by others from banks or financial
 institutions are not, prima facie, prejudicial to the interest of the
 Company.
 
 (xvi) In our opinion, the Company has applied the term loans for the
 purpose for which the loans were obtained.
 
 (xvii) In our opinion, no funds raised on short-term basis have been
 used for long-term investment.
 
 (xviii)The Company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the
 Order are not applicable.
 
 (xix) The Company has neither issued nor had any outstanding debentures
 during the period. Accordingly, the provisions of clause 4(xix) of the
 Order are not applicable.
 
 (xx) The Company has not raised any money by public issues during the
 period. Accordingly, the provisions of clause 4(xx) of the Order are
 not applicable.
 
 (xxi) No fraud on or by the Company has been noticed or reported during
 the period covered by our audit.
 
 
                                           For Walker, Chandiok & Co
                                               Chartered Accountants
                                       Firm Registration No: 001076N
 
 
 
                                            per Khushroo B. Panthaky
                                                             Partner
                                              Membership No. F-42423
 
 
 Place : Mumbai 
 Date  : 29 April 2011