Siemens

We have audited the attached balance sheet of Siemens Limited (the
 Company) as at 30 September 2008, the profit and loss account and the
 cash flow statement of the Company 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.
 
 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.
 
 As required by the Companies (Auditors Report) Order, 2003 (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.
 
 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 it 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 of the Company, as at 30 September 2008, and taken on record
 by the Board of Directors, we report that none of the directors is
 disqualified as at 30 September 2008 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 30 September 2008;
 
 (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 to the Auditors Report
 
 Referred to in our report of even date
 
 (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 all 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) Fixed assets disposed off during the year were not substantial, and
 therefore, do not affect the going concern assumption.
 
 (ii) (a) The inventory, except goods-in-transit and stocks lying with
 third parties, has been physically verified by the management during
 the year. In our opinion, the frequency of such verification is
 reasonable. For stocks lying with third parties at the year-end,
 written confirmations have been obtained.
 
 (b) The procedures for the 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. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) The Company has neither granted nor taken any loans, secured or
 unsecured, to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Act.
 
 (iv) In our opinion and according to the information and explanations
 given to us, and having regard to the explanation that purchases of
 certain items of inventories and fixed assets are for the Companys
 specialised requirements and similarly certain goods sold are for the
 specialised requirements of the buyers and suitable alternative sources
 are not available to obtain 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 purchase of inventories and
 fixed assets and with regard to the sale of goods and services. We have
 not observed any major weakness in the internal control system during
 the course of the audit.
 
 (v) In our opinion, and according to the information and explanations
 given to us, there are no contracts and arrangements the particulars of
 which need to be entered into the register maintained under section 301
 of the Act.
 
 (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 account maintained by the
 Company pursuant to the rules prescribed by the Central Government for
 maintenance of cost records under section 209(1 )(d) of the Act in
 respect of electrical motors 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.
 
 (ix) (a) According to the information and explanations given to us and
 on the basis of our examination of the records, the Company is
 generally regular in depositing 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 with
 the appropriate authorities.
 
 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,
 Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and
 other material statutory dues were in arrears as at 30 September 2008
 for a period of more than six months from the date they became payable.
 
 There were no dues on account of cess under section 441A of the Act
 since the date from which the aforesaid section comes into force has
 not yet been notified by the Central Government.
 
 (b) According to the information and explanations given to us, there
 are no dues of Income-tax, Wealth tax and Cess which have not been
 deposited with the appropriate authorities on account of any dispute.
 
 According to the information and explanations given to us, the
 following dues of Sales tax, Service tax, Excise duty and Customs duty
 have not been deposited by the Company on account of disputes.
 
 Name of the statute             Nature of the                   Amount
                                 dues                (Rs. in thousands)
 
 Central Excise Act,             Duty and                         7,440
 1944 and Service Tax            penalty
                                                                 52,367
 State and Central               Tax,                            46,286
 Sales Tax Acts,                 interest and
 Work Contract Tax               penalty
 Acts, Entry Tax
                                                                 65,560
                                                                 13,175
                                                                 56,442
 Customs Act, 1962               Duty                           120,000
 
 Period to which the             Forum where
 amount relates                  dispute is pending
 
 1993/94, 1994/95,               Commissioner
 1995/96 1996/97,                (Appeals)
 1989/90 to 1999/00,
 2000/01 & 2002/03
 1980/81, 1994/95,               Customs, Excise,
 1995/96,                        Service Tax Appellate
 1996/97 to 1998/99,             Tribunal
 2001/02 to 2006/07
 1967/68, 1968/69,               Assistant
 1970/71, 1973/74,               Commissioner
 1979/80, 1980/81,
 1982/83 to 1984/85,
 1987/88 to 1989/90,
 1995/96, 1996/97,
 1998/99 to 2006/07
 1996/97,                        Deputy
 1974/75 to 1977/78,             Commissioner
 1986/87, 1987/88,
 1989/90, 1991/92,
 1992/93, 1993/94,
 1995/96, 1996/97,
 1998/99 to 2007/08
 1986/87, 1989/90,               Sales Tax Tribunal
 1990/91, 1992/93
 1993/94,
 1994/95 to 1999/00,
 2000/01,
 2001/02 & 2002/03
 1996/97, 2001/02,               High Court
 2006/07 to 2007/08
 1998/99                         High Court
 
 (x) The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses in the financial year
 and in the immediately preceding financial year.
 
 (xi) The Company did not have any outstanding dues to any financial
 institution, banks or debenture holders during the year.
 
 (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) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi / mutual benefit
 fund / society.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company.
 
 (xvi) The Company did not have any term loans outstanding during the
 year.
 
 (xvii)According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we are of
 the opinion that the
 funds raised on short-term basis have not been used
 for long-term investment.
 
 (xviii)The Company has not made any preferential allotment of shares to
 companies/firms/parties 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 by public issues.
 
 (xxi) During the course of our audit management has noticed and
 reported certain instances of frauds relating to theft by third party
 and employees amounting to Rs 4,518 thousand. The investigations
 relating to these cases are in progress and the amounts have either
 been recovered or the Company is adequately covered by insurance.
 According to information and explanations given to us, no fraud by the
 Company has been noticed or reported during the course of our audit.
 
                                                   For B S R & Co.
                                             Chartered Accountants
 
                                                      Akeel Master
                                                           Partner
                                             Membership No: 046768
 Mumbai
 Date : 25 November 2008