1.  We have audited the attached Balance Sheet of Kidde India Limited
 (theCompany) as at March 31, 2009, and the related Profit and Loss
 Account and Cash Flow Statement for the period from January 1, 2008 to
 March 31, 2009 annexed thereto, which we have signed under reference to
 this report. 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 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 (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together, the Order), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956, of
 India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Without qualifying our opinion, we draw your attention to Note 14
 on Schedule 19, regarding the appropriateness of the going concern
 basis used for the preparation of these Accounts because the net-worth
 of the Company has been eroded as at March 31, 2009, and the validity
 of the going concern basis would depend upon the continuance of the
 existing support by Kidde International Limited, U.K, the holding
 company. The Accounts do not include adjustments that would result from
 discontinuance of the funding by the holding company.
 
 5.  Further to our comments in the Annexure referred to in Paragraph 3
 above, we report that:
 
 (a) Note 9(b) on Schedule 19 regarding payment of remuneration
 aggregating Rs. 2,469 (000s) and Rs. 1,752 (VOOs) to the Directors of
 the Company which is subject to approval of Central Government of India
 and Shareholders of the Company, respectively.
 
 (b) Subject to our remarks in paragraph 5(a) above and Note 11(b) on
 Schedule 19 regarding non-disclosure of quantitative details of
 turnover and production and details of raw material consumed in respect
 of manufacturing activity and purchase of traded goods, 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;
 
 (c) 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;
 
 (d) The Balance Sheet, Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (e) In our opinion, the Balance Sheet, Profit and Loss Account and the
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section 3C of Section 211 of
 iiie Act;
 
 (f) On the basis of written representations received from the Directors
 as on March 31, 2009, and taken on record by the Board of Directors of
 the Company, none of the Directors is disqualified as on March 31, 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (g) In our opinion and to the best of eur information and according to
 the explanations given to us, the said financial statements together
 with the Notes thereon and attached thereto give in the prescribed
 manner, subject to Note 11(b) on Schedule 19 regarding non-disclosure
 of quantitative details of turnover and production and details of raw
 material consumed in respect of manufacturing activity and purchase of
 traded goods, the information required by the Act and give, subject to
 our remarks in paragraph 5(a) above and related notes referred to
 therein with consequential effects on the Companys loss for the year
 and the relevant items on the Balance Sheet, the effect of which could
 not be determined, a true and fair view, in conformity with the
 accounting principles generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009; (ii) in the case of the Profit and Loss
 Account, of the loss for the period ended on that date and (iii) in the
 case of the Cash Flow Statement, of the cash flows for the period ended
 on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the Company have been physically verified by
 the Management during the period and no material discrepancies between
 the book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of the fixed assets has not been
 disposed of by the Company during the period.
 
 (ii) (a) The inventory (excluding stocks lying with third party) has
 been physically verified by the Management during the period. In
 respect of inventory lying with third parties, these have been
 substantially confirmed by them. In our opinion,the frequency of
 verification is reasonable.
 
 (b) In our opinion, the procedures for physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the natureof its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 (iii) (a) 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 Act. Accordingly, clauses (iii)(b) to (iii)(d)
 of paragraph 4 of the Order are not applicable to the Company for the
 current period.
 
 (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, clauses (iii)(f) and
 (iii)(g) of the paragraph 4 of the Order are not applicable to the
 Company for the current period.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 of supply do not exist for obtaining comparative quotations, there is
 generally an adequate internal control system commensurate with the
 size of the Company and the nature of its business for purchase of
 inventory, fixed assets and for the sale of goods and services.
 Further, on the basis of our examination of the books and records of
 the Company and according to the information and explanations given to
 us, we have neither come across nor have been informed of any
 continuing failure to correct major weaknesses in the aforesaid
 internal control system.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs, no
 comparison of prices could be made as the transactions of purchase of
 raw materials and components and services according to Management were
 of special nature and there were no other transactions of similar
 nature with other parties.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion,;the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) The Central Government of India has not prescribed the
 maintenance of cost records under clause (d) of sub-section (1) of
 Section 209 of the Act for any of the products of the Company.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income-tax, wealth tax, service tax,
 customs duty, excise duty, cess and other material statutory dues, as
 applicable, with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of income tax,
 wealth tax, service tax, customs duty and cess which have not been
 deposited on account of any dispute. The particulars of dues of sales
 tax and excise duty as at March 31, 2009 which have not been deposited
 on account of dispute are as follows:
 
 Name of the    Nature of dues    Amount     Forum where the dispute is
 Statue             pending    (Rs. in 000s)
 
 The Central 
 Sales Tax    Sales Tax Liability 
              for the             2,510      Gujarat Value Added Tax 
                                             Tribunal, 
 Act, 1956    period 2003-04 and 
              2004-05                        Ahmedabad.
 
              Sales Tax Liability 
              for the            10,608      Deputy Commissioner of 
                                             Sales Tax
              period 2002-03                 Appeal III, Surat
 
              Sales Tax Liability 
              for the                36      Deputy Commissioner of 
                                             Sales Tax
              period 1998-99                 (Appeals), Mumbai.
 
              Sales Tax Liability 
              for the                35      Assessing Authority, 
                                             New Delhi
              period 2003-04
 
              Sales Tax Liability 
              for the             9,412     Joint Commissioner of 
                                            Sales Tax
              period 2001-02, 
              2002-03 and                   (Appeals).Thane
              2003-04
 
 The Gujarat 
 Sales Tax    Sales Tax Liability 
              for the             3,614     Deputy Commissioner of 
                                            Sales Tax
 Act, 1969    period 2002-03                Appeal III, Surat
 
 The Bombay 
 Sales Tax    Sales Tax Liability 
              for the             2,148     Deputy Commissioner of 
                                            Sales Tax
 Act, 1959    period 1998-99 and 
              2000-01                       (Appeals), Mumbai
 
              Sales Tax Liability 
              for the             1,091     Joint Commissioner of 
                                            Sales Tax
              period 2001-02 and 
              2002-03                       (Appeals).Thane
 
 The Orissa 
 Sales Tax    Sales Tax Liability 
              for the               169     Orissa Sales Tax Tribunal, 
                                             Cuttack
 Act, 1947    period 1993-94
 
 The Uttar 
 Pradesh      Sales Tax Liability 
              for the             1,000    Assistant Commissioner of 
                                            Uttar Pradesh
 Sales Tax 
 Act, 1948    period 2004-05               Trade Tax, Agra
 
 Rajasthan 
 VAT Act,     Sales Tax Liability 
              for the               132     Deputy Commissioner, Jaipur
 2003         period 2006-07
 
 The Central 
 Excise Act,  Excise Duty Liability 
              for the             2,636     Assistant Commissioner 
                                            Central Excise
 1944         period January 1998 to        & Customs, Surat
              December 1998 and
              September 1999 to January
               2000
 
              Excise Duty Liability 
              for the               864     Assistant Commissioner 
                                            Central Excise
              period March 1995 to          & Customs, Daman
              February 1997
 
              Excise Duty Liability 
              for the               102     Deputy Commissioner of 
                                            Central Excise,
              period January 1999 to        Vapi
              March 1999
 
              Excise Duty Liability 
              for the             1,854     Commissioner of Central 
                                            Excise
              period January 1998 to        (Appeals), Mumbai
               March 2001
 
              Excise Duty Liability 
              for the               460     Customs, Excise and 
                                            Service Tax
             years 1986-1987 to 
              1988-89                       Appeallate Tribunal, 
                                            Ahmedabad.
             (upto August 1989)   
 
 (x) As at March 31, 2009, the accumulated losses of the Company are
 more than fifty percent of the net worth and it has incurred cash
 losses during the financial period ended on that date and in the
 immediately preceding financial year.
 
 (xi) According to the records of the Company examined by us and the
 information and explanations given to us, the Company has notdefaulted
 in repayment of dues to any bank as at the Balance Sheet date. Further,
 there were no dues payable to financial institution or debenture
 holders as at the Balance Sheet date.
 
 (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 chit fund/
 nidhi/ mutual benefit fund/ societies are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 (xv) In our opinion, and 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 during the period.
 
 (xvi) The Company has not obtained any term loans.
 
 (xvii) On the basis of an overall examination of the Balance Sheet of
 the Company, in our opinion and according to the information and
 explanations given to us, funds aggregating Rs. 106,503 (VOOs) raised
 on a short-term basis have been used for long term investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained under
 Section 301 of the Act during the period.
 
 (xix) The Company has not issued any debentures during the period.
 
 (xx) The Company has not raised any money by public issue during the
 period.
 
 (xxi) During the course of our examinationof the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India and according to the information and
 explanations given to us, except for few instances of site expenses
 claimed by employees of Company by misstating the expense vouchers/
 records and misappropriation of Companys assets which as represented
 to us do not involve material amounts, we have neither come across any
 other instance of fraud on or by the Company, noticed or reported
 during the period, nor have we been informed of such case by the
 Management.
 
                                                          Sd/- 
                                                     Uday Shah
 
                                                       Partner
                                      Membership No. F - 46061
 
                                          For and on behalf of
 
 Place: Mumbai                                Price Waterhouse
 
 Date : August 31, 2009                  Chartered Accountants