1.  We have audited the attached Balance Sheet of KEC INTERNATIONAL
 LIMITED (“the Company”) as at March 31, 2011, the Proft and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto, in which are incorporated the
 returns for the year ended on that date audited by other auditors from
 the Company’s overseas branches at Afghanistan, Algeria, Bangladesh,
 Egypt, Ethiopia, Georgia, Ghana, Kazakhstan, Kenya, Lebanon, Malaysia,
 Mali, Namibia, Nigeria, Oman, Phillipines, South Africa, Tazikistan,
 Tunisia , United Arab Emirates and in case of Libya branch return for
 the nine months ended December 31, 2010 audited by other auditors
 alongwith the management accounts for the three months ended March 31,
 2011. 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 give in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Without qualifying our report attention is invited to Footnote to
 Note 11 of Schedule 19. During the year the Company has made provision
 for commission to non-executive directors of Rs. 880 lacs which exceeds
 1% of the net profits computed under Section 349 of the Companies Act,
 1956 by Rs. 625.81 lacs which is subject to approval of members in the
 forthcoming annual general meeting and of the Central Government.
 
 5.  Further to our comments in the Annexure referred to in paragraphs 3
 and 4 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 it appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the Company’s overseas branches at Afghanistan,
 Algeria, Bangladesh, Egypt, Ethiopia, Georgia, Ghana, Kazakhstan,
 Kenya, Lebanon, Malaysia, Mali, Namibia, Nigeria, Oman, Philippines,
 South Africa, Tazikistan, Tunisia, United Arab Emirates, and in case of
 Libya for the nine months ended December 31, 2010, audited by other
 auditors;
 
 (iii) the reports on the accounts of the Company’s overseas branches at
 Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Georgia, Ghana,
 Kazakhstan, Kenya, Lebanon, Malaysia, Mali, Namibia, Nigeria, Oman,
 Phillipines, South Africa, Tazikistan, Tunisia and United Arab
 Emirates, and in case of Libya for the nine months ended December 31,
 2010, audited by other auditors have been forwarded to us and have been
 dealt with by us in preparing this report.
 
 (iv) 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 and the audited Branch Returns and in case of Libya also with
 the management accounts for the three months ended March 31, 2011;
 
 (v) 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;
 
 (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 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 March 31, 2011;
 
 (b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (c) 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, we report that 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 (iii), (v), (vi), (x), (xii),
 (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 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 the 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 inventory:
 
 (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 explanation
 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) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the
 
 Company and the nature of its business with regards to 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
 weaknesses in internal control system.
 
 (v) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (vi) 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 Electric Cables and Conductor 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.
 
 (vii) 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:
 
 Statute     Nature of Dues        Forum where Dispute is   Relating 
                                                            to various
                                                            years 
                                                            comprise 
                                                            in the 
                                                            period
 
 Sales Tax   Tax/Penalty/Interest  Assistant Commissioner/  1995-1996 to
                                                            2009-2010 
                                   Joint Commissioner/
                                   Deputy Commissioner/
                                   Additional Commissioner 
                                   (Appeal)
 
             Tax/Penalty/Interest  Rajasthan Tax Board, 
                                   Ajmer                    1994-1995 to 
                                                            2008-2009
 
             Tax/Interest          Appellate Tribunal       1989-1990 to 
                                                            2004-2005
 
 The Central 
 Excise Act, Duty/Penalty/Interest Customs Excise and       1994-1995 to 
 1944                              Service Tax Tribunal     2009-2010
 
             Duty/Penalty/Interest Additional Commissioner/ 1994-1995 to
                                   Commissioner (Appeals)   2010-2011
 
             Interest on 
             Differential Duty     High Court               2001-2002 to 
                                                            2005-2006
 
 The Finance 
 Act, 1994   Service Tax           Commissioner             2004-2005 to 
                                                            2009-2010
 
 The Income 
 Tax Act,    Tax/Interest          Commissioner of Income   A.Y. 2008-
                                                            2009
 1961                              Tax (Appeals)
 
 
 Statue                      Amount involved (Rs. in lacs)
 
 Sales Tax                             2,215.72
 
                                          22.65
 
                                         154.49
 
 The Central Excise Act, 1944            363.45
 
                                         354.60
 
                                          61.76
 
 The Finance Act, 1994                    14.84
 
 The Income Tax Act, 1961                244.32
 
 
 
 For the above purpose only statutory dues payable in India have been
 considered.
 
 (viii) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks and financial institutions.
 
 (ix) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by its wholly owned subsidiaries from banks are
 not prima facie prejudicial to the interests of the Company.
 
 (x) 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.
 
 (xi) 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.
 
 (xii) To the best of our knowledge and according to the information and
 explanations given to us, no fraud on or by the Company has been
 noticed or reported during the year.
 
                                          For Deloitte Haskins & Sells
                                                 Chartered Accountants
                                             (Registration No.117365W)
 
                                                           U. M. NEOGI
                                                               Partner 
                                                 (Membership No.30235)
 
 Place : Mumbai 
 Date  : May 6,2011