We have audited the attached Balance Sheet of Havells India Limited, as
 at 31st March, 2011 and also the Profit and Loss Account of the Company
 for the year ended on that date annexed thereto and the Cash Flow
 Statement for the period ended on that date. 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.
 
 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 the 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 (Auditors Report) Order, 2003, as amended
 by the Companies (Auditors Report) (Amendment) Order 2004, issued by
 the Central Government in terms of subsection (4A) of section 227 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.
 
 Further to our comments in the Annexure referred to above, we report
 that:
 
 i) 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;
 
 ii) 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 for the purpose of our audit have been
 received in respect of branches not visited by us;
 
 iii) the Balance Sheet, the 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
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 Companies Act, 1956.
 
 v) on the basis of written representations received from the directors,
 as on 31st March, 2011 and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March
 2011 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act, 1956;
 
 vi) in the absence of the notification in the Official Gazette of the
 Central Government, the Company has not made any provision for cess
 payable under section 441A of the Companies Act, 1956. As per the
 explanations given to us, the required provision for cess payable shall
 be made in accordance with the notification, as and when issued by the
 Central Government in its Official Gazette.
 
 vii) Without qualifying our opinion, we draw your attention to Note no.
 11 of Schedule 18, that pursuant to the Scheme of arrangement u/s 391,
 392 and 394 of the Companies Act, 1956 and as approved by the Honble
 High Court of Judicature at Delhi vide their order dated 19th August
 2010, certain expenses and other items as prescribed therein have been
 adjusted from the Business Reconstruction Reserve account. Had the said
 adjustments not been made and treated in accordance with the generally
 accepted accounting principles:-
 
 i) The net profit after tax for the year (inclusive of the effect of
 MAT credit) would have been lower by Rs. 0.12 crore,
 
 ii) The provision for current tax and MAT credit entitlement would have
 been lower by Rs. 0.04 crore and Rs.  0.02 crore respectively.
 
 viii) in our opinion, and to the best of our information and according
 to the explanations given to us, the said accounts read together with
 the significant accounting polices and notes thereon, 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 31st March, 2011 and
 
 b) in the case of Profit and Loss Account, of the profit of the Company
 for the year ended on that date; and
 
 c) in the case of Cash Flow Statement, of the cash flows of the Company
 for the year ended on that date.
 
 
 
 
 
 
 ANNEXURE TO THE AUDITORS REPORT
 
 In terms of the information and explanations given to us and the books
 and records examined by us in the normal course of audit and to the
 best of our knowledge and belief, we state as under:
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) The fixed assets have been physically verified by the management at
 reasonable intervals. As explained to us, the discrepancies noticed on
 physical verification of fixed assets were not material in relation to
 the size and nature of fixed assets and have been properly dealt with
 in the books of accounts. In our opinion, the frequency of the physical
 verification is reasonable having regard to the size of the Company and
 the nature of its business.
 
 (c) In our opinion, the fixed assets disposed off during the year do
 not constitute substantial part of fixed assets of the Company and such
 disposal, in our opinion, has not affected the going concern status of
 the Company.
 
 (ii) (a) The inventories have been physically verified during the year
 by the management at reasonable intervals.
 
 (b) In our opinion, the procedures of 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) On the basis of our examination of the records of inventories, we
 are of the opinion that the Company is maintaining proper records of
 inventories. The discrepancies noticed on physical verification of
 stocks as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 (iii) In our opinion and as per the informations given to us, the
 Company has not granted or taken any loans, secured or unsecured, to /
 from companies, firms or other parties covered in the register
 maintained under Section 301 of the Act. Accordingly, the provisions of
 clauses 4(iii) (a to g) of the Order are not applicable to the Company.
 
 (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.  Further, on the basis of our examination
 and according to the information and explanations given to us, no major
 weaknesses in the aforesaid internal control system has been noticed.
 
 (v) (a) As per prima facie examination of the register maintained under
 section 301 of the Act, we are of the opinion that the transactions
 that need to be entered in the register in pursuance of section 301 of
 the Act have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made during the year, aggregating in
 value of Rupees five lakhs or more with each party 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 deposits from public. Therefore,
 directives issued by the Reserve Bank of India and the provisions of
 section 58A and 58AA or any other relevant provisions of the Companies
 Act, 1956 and rules framed thereunder are not applicable for the year
 under audit.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) The Company is engaged in the manufacturing of electrical
 cables, electric motors, fans, printed circuit boards and compact
 fluorescent lamps, the cost records in respect of which have been
 prescribed u/s 209(1)(d) of the Companies Act 1956. We have broadly
 reviewed the same and are of the opinion that the prima facie, the
 prescribed records and accounts are being maintained. We have not,
 however, made a detailed examination of the same.
 
 (ix) (a) The Company is regular in depositing undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income Tax, VAT / Sales Tax, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty, Cess or any other statutory dues
 with the appropriate authorities.  There are no arrears of outstanding
 statutory dues as at 31st March 2011 for a period of more than six
 months from the date they become payable. However, the Company has not
 made any provision towards cess payable u/s 441A of the Companies Act,
 1956, since the required notification has not been issued by the
 Central Government in this regard.
 
 (b) The particulars of dues of Income Tax/Sales Tax/VAT/Custom
 Duty/Service Tax/Excise Duty/Cess or any other Government dues which
 have not been deposited on account of any dispute are disclosed in Note
 No. 25 of Schedule 18 to the Balance Sheet.
 
 (x) The Company has no accumulated losses as at 31st March, 2011 and
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 (xi) The Company has not defaulted in repayment of dues to any
 financial institution or banks. The Company has not issued any
 debentures.
 
 (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) The provisions of any special statute applicable to a chit
 fund/nidhi/mutual benefit fund/ societies are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not dealing or trading in shares,
 debentures, securities and other investments.  Accordingly, the
 provisions of clauses 4(xiv) of the Order are not applicable to the
 Company.
 
 (xv) According to the information and explanation given to us, the
 Company has given following guarantees for and on behalf of
 subsidiaries as under:
 
 (a) The Company has given a corporate guarantee of Rs. 215.02 crores
 (Euro 34 millions) for and on behalf of wholly owned subsidiary company
 Havells Netherlands Holding B.V., in respect of Asian Terms Facility
 Agreement entered with Barclays Capital and State Bank of India on 13th
 March, 2007, against the loan taken by the said subsidiary. The
 outstanding loan as on the date of the Balance sheet is Rs. 63.24
 crores (Euro 10 Millions)
 
 (b) The Company has given an irrevocable and unconditional corporate
 guarantee of Rs. 31.62 crores (Euro 5 millions) to Deutsche Bank in
 respect of credit facilities and other financial accommodation
 sanctioned to the step-down subsidiary company Havells Sylvania Europe
 Limited . The outstanding amount of the said credit facility as on the
 date of the Balance Sheet is Rs. 11.88 crores (Euro 1.88 Million)
 
 (c) The Company has given a corporate guarantee of Rs. 100 crores to
 Yes Bank Limited in respect of Standby letter of credit facility
 sanctioned to its subsidiary company Havells Exim Limited. The
 outstanding amount of the said credit facility as on the date of the
 Balance Sheet is Rs. 25.60 crores.
 
 In our opinion, the terms and conditions on which such guarantees and
 commitments have been given are not prima facie prejudicial to the
 interests of the Company, since the same are on account of commercial
 expediency.
 
 (xvi) On the basis of examination of accounting records and cash flow
 statements, and as per the explanations given to us, we are of the
 opinion that, the term loans were applied for the purpose for which the
 loans were obtained.
 
 (xvii) On the basis of examination of accounting records and cash flow
 statements, and as per the explanations given to us, we are of the
 opinion that the funds raised on short-term basis have not been used
 for long-term investments.
 
 (xviii) The Company has made allotment of 2219000 Equity Shares of Rs.
 5/- each fully paid-up shares to parties and companies covered under
 register maintained under section 301 of the Act during the year in
 pursuance of Scheme of Arrangement u/s 391, 392 of the Companies Act,
 1956 and as approved by the Honble High Court of Judicature at Delhi
 vide their order dated 19.08.2010 and the price at which such shares
 are issued are not prejudicial to the interests of the Company.
 
 (xix) The Company has not issued any debentures. Accordingly, the
 provisions of clauses 4(xix) of the Order are not applicable to the
 Company.
 
 (xx) During the year, the Company has not raised any money by way of
 public issue.
 
 (xxi) During the checks carried out by us and as per information made
 available to us, no fraud on or by the Company has been noticed or
 reported during the year under audit.
 
                                         For V. R. BANSAL & ASSOCIATES
 
                                                 Chartered Accountants
 
                                               Registration No.016534N
 
                                                          (V.P. BANSAL)
 
 Dated : 27th May, 2011                                        Partner
 
 Place : NOIDA                                   Membership No. : 8843