1.  We have audited the attached Balance Sheet of Hitachi Home and Life
 Solutions (India) Limited (the Company) as at March 31, 2011 and also
 the Profit and Loss account and the Cash Flow statement for the year
 ended on that date annexed thereto. 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 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 (as
 amended) (the Order) 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.
 
 4.  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 purposes 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;
 
 iii. The balance sheet, 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, 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 the Act.
 
 v. On the basis of the written representations received from the
 directors, as on March 31, 2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act.
 
 vi. 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;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 b) in the case of the Profit and Loss account, of the profit for the
 year ended on that date; and
 
 c) in the case of Cash Flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 Hitachi Home and Life Solutions (India) Limited (the Company)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets are physically verified by the management during the
 year and no material discrepancies identified on such verification.
 
 (c) There was no disposal of a substantial part of fixed assets during
 the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (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) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Accordingly, the
 provisions of clause 4(iii)(a) to (d) of the Order are not applicable
 to the Company and hence not commented upon.
 
 (b) According to information and explanations given to us, 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 Companies Act, 1956. Accordingly, the provisions of clause
 4(iii)(e) to (g) of the Order are not applicable to the Company and
 hence not commented upon.
 
 (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, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in the internal control system in respect of these
 areas.
 
 (v) According to the information and explanations provided by the
 management, in our opinion, there are no contracts or arrangements that
 need to be entered in the register maintained under Section 301 of the
 Companies Act, 1956.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (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 accounts 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 Act and are
 of the opinion that prima facie, the prescribed accounts and records
 have been made and maintained.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities 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 applicable to it.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise of
 the company in depositing the same.
 
 (b) 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,
 wealth-tax, service tax, value added tax, sales-tax, custom duty,
 excise duty, cess and other undisputed statutory dues were outstanding,
 at the year end, for a period of more than six months from the date
 they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income tax, sales tax, service tax, excise duty and cess on account of
 any dispute that have not been deposited, are as follows:
 
 Name of the 
 statute        Nature of dues      Amount   Period to 
                                              which    Forum where
                              (Rs. in 000) the amount 
                                               relates dispute is pending
 
 Sales Tax 
 Act           Demand raised in    22,542  1998-99 to Deputy Commissioner
 (Central & 
 States)       assessments at 
               various                     2007-08    Appeals / Joint
               locations                              Commissioner 
                                                      Appeals
 
 Finance Act, 
 1994          Demand raised on    10,249  2005-06 to CESTAT, Ahmedabad
 (Service tax  advertisement 
               expenses                    2010-11
               including interest 
               and penalty
 
               Demand raised on 
               Consulting           4,864  2000-01 to CESTAT, Ahmedabad
               Engineers Services 
               including                   2003-04
               interest and penalty
 
               Demand raised on 
               Commission             876  2004-05    CESTAT, Ahmedabad
               including interest 
               and penalty
 
               Demand raised for 
               wrong service        3,212 2003-04 and CESTAT, Ahmedabad
               tax credit including 
               interest                     2004-05
               and penalty
 
 Customs Act, 
 1962          Dispute over 
               classification          92  2000-01    Deputy 
                                                      Commissioner
                                                      Appeals
 
               Dispute over 
               classification      17,144  2008-09    CESTAT, Mumbai
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to banks. The Company
 has no outstanding dues to debenture holders and financial
 institutions.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Order are not applicable to the Company.
 
 (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 to the
 Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 (xvi) Based on the information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet and cash flow statement of
 the Company, we report that 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.
 
 (xix) The Company did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money through a public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 year.
 
 
 
 For S.R. Batliboi & Associates
 
 Firm Registration No.:101049W 
 
 Chartered Accountants
 
 per Sudhir Soni
 
 Partner                                               Place: Mumbai
 
 Membership No.: 41870                                 Date:May 23, 2011