1.  We have audited the attached Balance Sheet of VOLTAS LIMITED (the
 Company) as at 31st March, 2011, the profit and Loss Account and the
 Cash Flow Statement of the Company for the year ended on that date,
 both annexed thereto. 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 significantestimates
 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
 specifiedin paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) 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;
 
 (b) 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;
 
 (c) 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;
 
 (d) 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;
 
 (e) 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:
 
 (i) in the case of the Balance Sheet, of the state of afairs of the
 Company as at 31st March, 2011;
 
 (ii) in the case of the profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of the written representations received from the
 Directors as on 31st March, 2011 taken on record by the Board of
 Directors, we report that none of the Directors is disqualifed as on
 31st March, 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/transactions etc., clauses (x), (xii), (xiii), (xiv),
 (xvi), (xviii), (xix) and (xx) 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 verifed 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 of 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 afected the going concern status
 of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verifed during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 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) The Company has neither granted nor taken any loan, secured or
 unsecured, to/from companies, frms or the parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining 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 purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs 5 lakhs in respect
 of any party, the transactions have been made at prices which are prima
 facie reasonable having regard to the prevailing market prices at the
 relevant time except in respect of certain purchases for which
 comparable quotations are not available and in respect of which we are
 unable to comment.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A & 58AA or any other relevant provisions of
 the Companies Act, 1956.
 
 (viii) In our opinion, the Company has an adequate internal audit
 system commensurate with the size and the nature of its business.
 
 (ix) 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 air conditioning system and refrigerators 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.
 
 (x) 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, Customs 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, Customs Duty, Excise Duty, Cess and other material
 statutory dues in arrears as at 31st March, 2011 for a period of more
 than six months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Service Tax and Excise
 Duty which have not been deposited as on 31st March, 2011 on account of
 disputes are given below:
 
 Statute            Nature of Dues           Forum where Dispute
                                             is pending
 
 Income Tax Act, 
 1961               Income Tax                 High Court
 
 The Central Excise 
 Act,               Excise Duty                Supreme Court
 1944
                                               High Court
                                               Customs, Excise and 
                                               Service Tax Appellate 
                                               Tribunal (CESTAT)
 
                                               Commissioners/ 
                                               Adjudicating Authority
 
 Finance Act, 
 1994 and           Service Tax                Customs, Excise and
 Service Tax Laws                              Service Tax Appellate
                                               Tribunal (CESTAT)
 
                                               Commissioner of 
                                               Central Excise (Appeals)
 
                                               Commissioners/ 
                                               Adjudicating Authority
 
 Central Sales 
 Tax Act           CST, VAT, GST and Entry     Supreme Court
 and Value Added 
 Tax               Tax (including penalty      High Courts 
 Act of various 
 States            and interest)
 
                                               Appellate Tribunals
 
                                               Commissioner (Appeals)
 
                                               Deputy Commissioner 
 
                                               (Appeals)
 
                                               Assessing Authority
 
 
 
 Statute              Period to which the amount           Amount
 
                      relates                              involved
 
                                                        (Rs in lakhs)
 
 Income Tax Act,1961     1973-75                           1.32
 
 The Central Excise
 Act                     1993-96                          45.74
 
                         1986-87                           7.95
 
                         1983-86                           0.27
 
                         1975,1982,1984, 1985-91,       1862.19 
                         1992-95, 1997-2008
 
                         1998 - 2008                     849.94
 
                         2003-08                        1511.43
 
                         1998-99, 2001-10                587.89
 
                         1993-94, 1996-2001              543.71
 
                         1988-91, 1992-94, 1995-96,     2465.90
 
                         1997-98, 1999-2000, 2002-05,
 
                         2007-10
 
                         1986-88, 1989-90, 1991-93,      847.45 
 
                         1994-98, 1999-2005, 2006-08
 
                         1989-2009                      3061.50
 
                         1989-92, 2003-07                252.27
 
                         1985-89, 1990-2008              125.61
 
 (xi) 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.
 
 (xii) 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 others from banks and financial institutions
 are not prima facie prejudicial to the interests of the Company.
 
 (xiii) 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.
 
 (xiv) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
                                        For Deloitte Haskins & Sells
 
                                               Chartered Accountants
 
                                          (Registration No. 117366W)
 
                                                       Nalin M. Shah 
 
 Mumbai, 
                                                             Partner
 19th May, 2011                                  Membership No.15860