Voltas

1.  We have audited the attached Balance Sheet of VOLTAS LIMITED, as at
 31st March, 2009, the Profit 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 from the Qatar, Bahrain
 and UAE Branches audited by other auditors. 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 the auditing standards
 generally accepted in India. These 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 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 (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.  Further to our comments in the Annexure referred to in paragraph 3
 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 Qatar, Bahrain and UAE Branches audited by
 other auditors;
 
 (iii) the reports on the accounts of the Qatar, Bahrain and UAE
 Branches 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;
 
 (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 31st March, 2009;
 
 (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.
 
 5. On the basis of the written representations received from the
 Directors as on 31st March, 2009, taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2009 from being appointed as a director in terms of Section
 274(1)(g) of the Companies Act, 1956.
 
 (Referred to in paragraph 3 of our report of even date)
 
 (i) The nature of the Companys business/activities during the year is
 such that, clauses (x), (xii), (xiii), (xiv), (xviii), (xix), (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 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
 explanation 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) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other 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
 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 in 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 quotation is 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 deposits from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Section 58A and 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.
 
 (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, 2009 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, 2009 on account of
 disputes are given below:-
 
 Particulars                 Forum where Dispute is pending
 
 1.     Income Tax            High Court
 2.     Excise Duty           Supreme Court
                              High Court
                              Customs, Excise And Service Tax Appellate
                              Tribunal (CESTAT)
                              Commissioner of Central Excise (Appeals)
                              Commissioners/Adjudicating Authority
 3.     Service Tax           Customs, Excise and Service Tax
                              Appellate Tribunal (CESTAT)
                              Commissioner of Central Excise
                              Commissioners/Adjudicating Authority
 4.     Sales Tax             Supreme Court
                              High Courts
                              Appellate Tribunals
                              Commissioner Appeals
                              Deputy Commissioner Appeals
                              Assessing Authority
 
 Period to which the amount relates            Amount
                                               involved
                                              (Rs. in lakhs)
 
 1973-75,1990-91                                 1.84
 1993-96                                        45.74
 1986-87                                         7.95
 2001-02                                         5.52
 1983-86                                        20.21
 1975,1982,1984,1985-91,1992-95,              2018.14
 1997-2008 
 1998 to 2003                                   16.00
 2001-08                                        59.70
 1998-2008                                    2043.90
 1993-94,1996-2001                             543.71
 1988-91,1992-94,1995-96,1997-2000,           2342.30
 2002-05,2007-09
 1986-88,1989-90,1991 -93,1994-98,             724.23
 1999-2005
 1989-2008                                     751.74
 1989-92,2004-07                               212.61
 1985-89,1990-2007                            1668.32
 
 (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 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, the term loans have been applied for the purposes for
 which they were obtained.
 
 (xiv) 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.
 
 (xv) 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
 
                                                  Nalin M. Shah
 Mumbai,                                           Partner
 29th May, 2009                                   Membership No. 15860