Auditor Report of Aditya Birla Nuvo Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

1. We have audited the accompanying Standalone Financial Statements of Aditya Birla Nuvo Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, in which are incorporated the branch''s financial statements for the year ended on that date audited by the branch auditors of the Company.

Management''s Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Financial Statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Financial Statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s management and Board of Directors, as well as evaluating the overall presentation of the Standalone Financial Statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements 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, of the state of affairs of the Company as at March 31, 2015, its Profit and its cash flows for the year ended on that date.

Other Matter

7. The accompanying Standalone Financial Statements include total assets of Rs. 1,716.15 crore as at March 31, 2015, and total revenues of Rs. 3,547.87 crore for the year ended on that date, in respect of one branch, which has been audited by branch auditors, whose financial statements, other financial information and auditor''s reports have been furnished to us. Our opinion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of this branch, and our report in terms of sub-sections (3) and (11) of section 143 of the Act, in so far as it relates to the aforesaid branch, is based solely on the reports of such other auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2015 (''the Order'') issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

9. As required by section 143(3) of the Act, we further report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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 reports on the accounts of the branch offices of the Company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

d. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the audited financial statements received from the Branch;

e. In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards specified under section 133 of the Act, Read with Rule 7 of the Companies (Accounts) Rules 2014;

f. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act;

10. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements – Refer Note 45(iv) to the Standalone Financial Statements;

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 45(iii) to the Standalone Financial Statements;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 8 of Our Independent Auditors'' Report to the members of the Company on the Standalone Financial Statements for the year ended March 31, 2015

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year other than inventory lying with third parties, where certificates confirming stocks have been received in respect of substantial portion of stock held.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of paragraph 3(iii) (a) to (b) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for 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 weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposits from the public.

(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 sub-section (1) of the section 148 of the Act, in respect of the Company''s products to which the said rules are made applicable, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales- tax,wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Name of the Nature of the Period Statute dues

Income tax Tax Demand AY 2006-07 Act, 1961

1975-76, 1976-77, 1986-87 & 2001-02

2003-04, 2004-05, Customs Act, Tax Demand, Interest 2005-06, 2007-08 1962 and Penalty 2009-10, 2013-14 2013-14

1977-78, 1986-87 1985-86, 1991-92, 1995-00, 2001-02, 2002-03, 2008-09 Central Excise Excise Duty, Interest 1994-95, 1996-97, Act, 1944 and Penalty 1997-98,1998-99, 2005-2012 1997-98 to 2000-01

Entry Tax 2013-14 & 2014-15

1999-00, 2002-03, 2004-05 & 2010-11 2002-03, 2004-05, 2007-08, 2008-09

Sales Tax, 1995-96, 1996-97, Value Added Tax, 1997-98, 1999-00, Central Sales Tax, 2001-02, 2002-03 to Sales Tax Act Non-Submission of 2004-05, 2005-06, forms, Purchase Tax, 2006-07, 2007-08, Trade Tax including 2008-09, 2009-10, Interest 2010-11

2002-03, 2003-04, 2006-07, 2007-08, 2009-10, 2010-11, 2011-12

2002-03, 2003-04 Service Tax Finance Act, 1994 including Interest (Service Tax) 2012-13 and Penalty

Textile 1981-82 to 1998-99 Committee Textile Cess Act 1990-00 to 2004-05

Gujarat Cess on generation 2011-12 to 2014-15 Green Cess of electricity through Act, 2011 captive power generation plants

Name of the Statute Forum where Amount dispute is pending (Rs. in Crores)

Income tax Act, 1961 Commissioner 102.13 (Appeals)

Customs Act, 1962 High Court 0.39

CESTAT 1.30

Commissioner 0.64 (Appeals)

Central Excise Act, 1944 High Court 0.06

CESTAT 3.11

Commissioner 1.24 (Appeals)

Commissioner/ 0.05 Deputy Commissioner

Sales Tax Act High Court 11.14

High Court 7.69

Appellate Tribunal 1.01

Commissioner 17.55 (Appeals)/Revisional Boards

Assessing authorities 7.09

Finance Act, 1994 (Service Tax) CESTAT 0.82

Commissioner 1.31 (Appeals)

Textile Committee Act Textile Committee 0.63 Cess Appellate Tribunal

Assessing authorities 0.65

Gujarat Green Cess Act, 2011 Supreme Court 1.72 of India

(c) In our opinion and to the best of our information and according to the explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiaries from banks or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained other than temporary deployment pending application.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. However, branch auditors have reported that there was a case of employee misappropriation which was not material and was appropriately dealt with by the management.

For and on behalf of For and on behalf of

KHIMJI KUNVERJI & CO. S R B C & CO LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration No. 105146W ICAI Firm Registration Number: 324982E

Per Shivji Vikamsey Per Vijay Maniar

Partner Partner

Membership No. 2242 Membership No. 36738

Mumbai Mumbai

Date: May 14, 2015 Date: May 14, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Aditya Birla Nuvo Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 (''The Act''), read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements 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 March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 purpose of our audit;

b. 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;

c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the audited financial statements received from the Branches;

d. The report on the accounts of the branch offices audited under section 228 by a person other than the company''s auditor has been forwarded to us as required by clause (c) of sub- section (3) of section 228 and have been dealt with in preparing our report in the manner considered necessary by us;

e. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;

f. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of 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) All fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, 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) During the year, pursuant to sale of its Carbon Black business, the Company has disposed off fixed assets related to this business which formed substantial part of the total fixed assets of the Company. Based on the information and explanations given by the management and on the basis of audit procedures performed by us, we are of the opinion that the sale of these assets has not affected the going concern status of the Company.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, 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, the provisions of clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information and explanations given to us, 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, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for 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 weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(v) (b) of the Order are not applicable to the Company.

(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 made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act, in respect of the Company''s products to which the said rules are made applicable, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) The Company is generally regular in depositing with appropriate authorities 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 applicable to it.

(b) 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 outstanding, at the year end, for a period of more than six months from the date they became payable.

(ix) (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of the Period statute dues

Income Tax Tax Demand, Short AY 2008-09, Act, 1961 payment of TDS 2009-10

Customs Act, Tax Demand, 1975-76, 1976-77, 1962 Interest and Penalty 1986-87 & 2001-02 2003-04 to 2005-06, 2007-08, 2009-10 & 2013-14

2013-14

Central Excise Excise Duty, 1977-78, 1986-87 Act, 1944 Interest and Penalty 1985-86, 1991-92, 1999-00, 1995-96 to 2005-06, 2001-02 to 2003-04, 2007-08

1994-95, 1996-97 to 1998-99

1997-98 to 2001-02

2010-11 to 2013-14

Sales Tax Act Entry Tax 2013-14 2002-03 to 2004-05

Sales Tax, Value 2002-03, 2004-05 Added Tax, Central 2002-03 , 2004-05 Sales Tax, Non- 2001-02, 2005-06 Submission of forms, to 2013-14

Purchase Tax, Trade 1995-96 to 1997-98, Tax including Interest 1999-00, 2003-04 to 2009-10 2002-03, 2003-04, 2006-07, 2007-08, 2010-11

Finance Act, 1994 Service Tax including 2003-04, 2004-05 (Service Tax) Interest and Penalty

2007-08

Textile Committee Textile cess 1981-82 to Act 1998-1999

1990-00 to 2004-05

Gujarat Green Cess on generation 2011-12 to 2013-14 Cess Act, 2011 of electricity through captive power generation plants

Name of the statue Forum where Amount dispute is pending (Rs. in Crore)

Income Tax Act, 1961 Commissioner 0.01 (Appeals)

Customs Act, 1962 High Court 0.39

CESTAT 1.26

Commissioner 0.83

Central Excise Act, 1944 High Court 0.06

Appellate Tribunal 3.95

Commissioner 0.87 (Appeals)

Commissioner/ 0.12 Dy Commissioner

Superintendent 0.02

Sales Tax Act High Court 3.49

Commissioner 0.02 (Appeals)

High Court 0.28

Appellate Tribunal 0.02

Commissioner 11.80 (Appeals)

Revisional Board 5.90

Assessing 3.41 Authorities

Finance Act, 1994 (Service Tax) CESTAT 0.79

Commissioner 1.23

Textile Committee Act Textile Committee 0.63 Cess Appellate Tribunal, Mumbai

Assessing Authorities 0.65

Gujarat Green Cess Act, 2011 Supreme Court of 1.19 India

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Orderare not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiaries from banks or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) The Company has unsecured debentures outstanding during the year, on which no security or charge is required to be created.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of For and on behalf of

KHIMJI KUNVERJI & CO. S.R. BATLIBOI & CO. LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration No. 105146W ICAI Firm Registration No. 301003E

Per Shivji K. Vikamsey Per Vijay Maniar

Partner Partner

Membership No. 2242 Membership No. 36738

Mumbai Mumbai

Date: May 20, 2014 Date: May 20, 2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Aditya Birla Nuvo Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss, and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors'' consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements 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 March 31, 2013;

b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 purpose of our audit;

b. 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. The Branch Auditors'' Reports have been forwarded to us and have been appropriately dealt with in this report;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the audited financial statements received from the Branches;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of Clause (g) of Sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of 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 phased programme for physical verification of all its fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, 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, the provisions of Clauses 4(iii) (b) to (d) of the Order are not applicable to the Company.

(e) According to the information and explanations given to us, 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, the provisions of Clauses 4(iii) (f) to (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for 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 weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(v) (b) of the Order are not applicable to the Company.

(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 made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act, in respect of the Company''s products to which the said rules are made applicable, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities the 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 applicable to it.

(b) 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 outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of Dues Amount Statute (Rs. in Crore)

Income-tax Act, 1961 Tax Demand, Short 0.30 payment of TDS

7.50

Customs Act, 1975 Tax Demand, Interest and Penalty 0.21

0.39

Central Excise Excise Duty, 0.87 Act, 1944 Interest and Penalty

13.06

5.92

2.03

0.78

0.02

Sales Tax Act Entry Tax 55.99

0.02

Sales Tax, Value 1.05 Added Tax, Central Sales Tax, Non- submission of forms, Purchase Tax, Trade Tax including Interest

0.09

0.74

13.25

6.46

0.07

Finance Act, 1994 Service Tax including 0.32 (Service Tax) Interest and Penalty

0.76

0.80

Textile Committee Act Textile Cess 0.63

0.65

Name of the Statute Period to which the Forum where amount relates dispute is pending

Income Tax Act 1961 AY 1996-97 & 1997-98 Assessing Officer

2007-08, 2009-10 & 2010-11 CIT (A)

Customs Act 1975 2003-04, 2004-05, 2007-08, CESTAT 2009-10

1975-76, 1976-97, 1986-87, High Court 2001-02

Central Excise Act 1944 1985-86, 1991-92, 1994-95, CESTAT 1995-96, 1999-00, 2003-04, 2008-09

1983-84 to 2011-12 Commissioner

1977 to 1978 & 1996-97 High Court to 2011-12

2001-02 to 2002-03 Appellate Tribunal

1998-99 CIT (A)

2010-11 to 2011-12 Superintendent

Sales Tax Act 2003-04 to 2012-13 Supreme Court of India

2002-03 to 2004-05 Commissioner

2003-04, 2004-05, High Court 2005-06, 2006-07, 2007-08, 2008-09

2002-03, 2004-05 to 2006-07 Tribunal

2002-03 to 2003-04 Assessing Authorities

2001-02, 2002-03, Commissioner 2006-07 to 2009-10

1995-96 to 1997-98, Revisonal Board 1999-00, 2003-04 to 2009-10

2001-02 CIT (A)

Finance Act 1994 1997-98 to 1999-00 and Supreme Court 2004-05 to 2006-07 of India

2003-04 to 2004-05 CESTAT

2002-03 to 2007-08 Commissioner

Textile Committee Act 1981-82 to 1998-99 Textile Committee Cess Appellate Tribunal, Mumbai

1999-00 to 2004-05 Assessing Authorities

(x) The Company has no accumulated losses at the end of the financial year, and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiaries from banks or financial institutions, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) The Company has unsecured debentures outstanding during the year, on which no security or charge is required to be created.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of For and on behalf of

KHIMJI KUNVERJI & CO. S.R. BATLIBOI & CO. LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration Number: 105146W ICAI Firm Registration Number: 301003E

Per Shivji K. Vikamsey Per Vijay Maniar

Partner Partner

Membership No. 2242 Membership No. 36738

Mumbai Mumbai

Date: May 29, 2013 Date: May 29, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Aditya Birla Nuvo Limited ('the Company') as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date 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 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.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) ('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.

4. 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 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. The Branch Auditor's Reports have been forwarded to us and have been appropriately dealt with in this report;

iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches;

iv. In our opinion, the Balance Sheet, Statement of Profit and Loss 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, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 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 March 31, 2012;

b) in the case of the Statement of Profit and Loss, 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 referred to in paragraph 3 of our report of even date Aditya Birla Nuvo Limited

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has phased programme for physical verification of all its fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Based on which, certain fixed assets have been verified during the year. As informed, no material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, 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, the provisions of clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information and explanations given to us, 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, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for 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 weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(v) (b) of the Order is not applicable to the Company.

(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 made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Act, in respect of Company's products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities 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 applicable to it.

(b) 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, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Statue Natures of Dues Forum where

Dispute is Pending

Central Excise Act Excise Duty, CESTAT

Interest and

Penalty

Commissioner (Appeals)

High Court(s)

Central Sales Tax Act Central Sales Tax Assessing Authorities

Commissioner (Appeals) High Court(s)

Customs Act Tax Demand, CESTAT

Interest and Penalty

High Court(s)

Finance Act, 1994 Service Tax including CESTAT

(Service Tax) interest and penalty Commissioner (Appeals)

Supreme Court of India

Sales Tax Act Entry Tax Commissioner (Appeals)

Supreme Court of India

Sales Tax / Appellate Tribunal

Purchase Tax / Assessing Authorities

Turnover Tax

including Interest Commissioner and Penalty (Appeals)

High Court(s)

Taxation Tribunal

Tamil Nadu Tax on Electricity Tax Assessing Authorities

Consumption or Sale High Court(s)

of Electricity Act, 2003

Textile Committee Act Textile Cess Assessing Authorities

Textile Committee Cess Appellate Tribunal,

Mumbai

UP Trade Tax Act Tax Demand and Trade Tax Tribunal

Interest

Value Added Tax Tax Demand, Appellate Tribunal

Interest and Penalty / Assessing Authorities Non Submission of Commissioner (Appeals) Forms

Income Tax Act Short payment of

TDS Commissioner (Appeals)

Name of the status Period to which Amount

Central Excise the Amount Relates (Rs. in Crore) 1985-86 to 2003-04, 2.34

2008-09,

2010-11 to 2011-12

1983-84 to 2011-12 4.17

1977-78, 1996-97 to 5.44 1999-00

Central sales 1995-96 to 1997-98, 4.26

1999-00, 2003-04 to

2007-08

2006-07, 2008-09 to 18.26

2009-10

2002-03, 2004-05 0.28

Customs 2003-04, 2004-05, 0.11 2007 -08, 2009-10

Financial 1975-76, 1976-77, 0.39

1986-87, 2001-02

2003-04, 2004-05 0.07

2002-03 to2005-06 0.38

Sales tax 1997-98 to 1999-00 0.13 and 2004-05 to

2006-07

2002-03 to 2004-05 0.02

2003-2004 to 2011-12 103.88

2004-05 0.01 1981-82 to 1986-87 0.98 2002-03 and 2003-04

2001-02, 2002-03, 0.93

2007-08, 2009-10

2003-04 to 2008-09 0.25

2004-05 0.01

Tamil Nadu tax 2011-12 0.62

1999-00 to 2002-03 4.88

Textile 1998-99 to 2004-05 0.65 1981-82 to 1998-99 0.63

UP trade tax 2002-03 0.01

Value added tax 2005-06, 2006-07 0.06 2005-06 to 2008-09 1.42

2008-09 0.02

Income tax 2007- 08 to 2009-10 0.23

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order, are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

(xix) The Company has unsecured debentures outstanding during the year, on which no security or charge is required to be created.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of For and on behalf of

KHIMJI KUNVERJI & CO. S.R. BATLIBOI & CO.

Firm Registration No.: 105146W Firm Registration No.: 301003E

Chartered Accountants Chartered Accountants

Per Shivji K. Vikamsey Per Vijay Maniar

Partner Partner

Membership No. 2242 Membership No. 36738

Mumbai Mumbai

Date: May 15, 2012 Date: May 15, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Aditya Birla Nuvo Limited ('the Company') as at March 31, 2011, and also the Profit and Loss Account, and the Cash Flow Statement for the year ended on that date 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 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.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) ('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.

4. 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 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. The Branch Auditor's Report have been forwarded to us and have been appropriately dealt with in this report;

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 and with audited returns from the branches;

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 written representations received from the directors as on March 31, 2011, and 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 director in terms of Section 274 (1)(g) of the Act;

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 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 case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date Re: Aditya Birla Nuvo Limited

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a phased programme for physical verification of all its fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, 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. Hence, clauses (iii)(b), (c) and (d) of the Order are not applicable.

(e) As informed, 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. Hence, clauses (iii)(f) and (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets, and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided to us, there have been no transactions which need to be entered in the register maintained under Section 301 of the Act. Hence, clause (v) (b) of the Order is not applicable to the Company.

(vi) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(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 made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act, in respect of the Company's products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities 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 applicable to it. Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) 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 undisputed statutory dues outstanding at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Statue Natures of Dues Forum where Dispute is Pending

Central Excise Act Excise Duty Tribunals including

Interest and Commissioner Penalty (Appeals)

High Court(s) Assessing Authorities

Sales Tax Act Sales Tax/ Tribunals Purchase Tax including Interest and Penalty Joint Commissioner (Appeals)

Additional Commissioner (Appeals)

Commissioner (Appeals)

Deputy Commissioner (Appeals)

High Court(s)

Assessing Authorities

Entry Tax Demand Joint Commissioner and Interest (Appeals)

Textile Textile Cess Tribunals Committee Act Assessing

Authorities

Value Added Tax Tax Demand Tribunals and Interest/ Additional Non-submission Commissioner of Forms (Appeals)

Assessing Authorities

Custom Act Tax Demand Tribunals and Interest High Court(s)

Employees' State Employees' State Tribunals

Insurance Act Insurance Dues

Electricity Tax Tamil Nadu High Court(s)

Electricity Tax Assessing

Authorities

Finance Act, 1994 Service Tax Tribunals

(Service Tax) Assessing

Authorities

U.P . Trade Tax Tax Demand Tribunals

Act, 1948 and Interest Additional

Commissioner (Appeals)

Name of the Statue Period to which Amount the Amount Relates (Rs. in Crore)

Central Excise Act 1985-86 to 2005-06, 2.69 2007-08

1989-90 to 2009-10 11.51

1977-78 0.02

1984-85 to 2010-11 2.89

Sales Tax Act 1981-82 to 1986-87, 0.33

1999-00 to 2003-04,

2004-05

2001-02 0.21

2000-01, 2001-02, 17.90 2006-07, 2009-10

2000-01, 2001-02, 0.07 2006-07

2004-05, 2005-06, 1.25

2006-07, 2009-10

2002-03 0.21

1988-89, 1994-95 to 6.74

2007-08

2002-03 to 2004-05, 102.57 2008-09

Textile Committee Act 1980-81 to 1998-99 0.63

1998-99 to 2004-05 0.65

Value Added Tax 2005-06 to 2006-07 0.06

2008-09 0.03

2005-06 to 2007-08 0.78

Custom Act 2003-04 0.11

1975-76, 1976-77, 0.39

1986-87, 2001-02

Employees' State Insurance Act 1998-99 and 0.07

2002-03 to 2005-06

Electricity Tax 1998-99 to 2002-03 4.62

2002-03 to 2004-05 0.70

Finance Act, 1994 (Service Tax) 2003-04, 2004-05 1.36

2001-02 to 2005-06 0.38

U.P . Trade Tax Act, 1948 2002-03 0.07

2007-08 0.01

(x) The Company has no accumulated losses at the end of the financial year, and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debentureholder.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company has issued 20,000,000 unsecured debentures of Rs.100 each on which no security or charge is required to be created.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Khimji Kunverji & Co. For S.R. Batliboi & Co.

Firm Registration No. 105146W Firm Registration No. 301003E

Chartered Accountants Chartered Accountants

Per Shivji K. Vikamsey Per Vijay Maniar

Partner Partner

Membership No. 2242 Membership No. 36738

Place: Mumbai Place: Mumbai

Date: May 30, 2011 Date: May 30, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Aditya Birla Nuvo Limited as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date 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 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.

3. As required by the Companies (Auditor s Report) Order, 2003 (as amended) (hereinafter referred to as

the Order ) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (hereinafter referred to as the Act ) we enclose 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 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. The Branch Auditor s Report have been forwarded to us and have been appropriately dealt with in this report;

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 and with audited returns from the branches;

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 written representations received from the directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as director in terms of section 274 (1)(g) 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 March 31, 2010;

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 case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date

Re: Aditya Birla Nuvo Limited

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a phased program for physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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 and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, 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. Hence clause (iii) (b), (c) & (d) of the Order are not applicable.

(e) As informed, 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. Hence clauses (iii) (f) & (g) of the Order, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) According to the information and explanations provided to us, there have been no transactions which need to be entered in the register maintained under section 301 of the Act. Hence, clause (v) (b) of the Order is not applicable to the Company.

(vi) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(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 made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act, in respect of the Company s products to which the said rules are made applicable, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities 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 applicable to it.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) 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, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Statute Nature of dues Amount (Rs. in Crores)

Central Excise Act Excise Duty including 2.65 Interest and Penalty 10.42

0.02 1.30

Sales Tax Act Sales Tax /Purchase Tax including interest 0.45 and Penalty

0.44

1.22

8.15 Textile Commitee Act Textile Cess 0.63

0.65

Entry Tax Tax Demand and 0.02 Interest

75.37

Value Added Tax Tax Demand and 0.06

Interest/Non 0.04 Submission of forms

2.59

Customs Act Tax Demand and 0.11 Interest

0.39

Income Tax Act Income Tax 11.39

Employee s State Employee s State 0.07 Insurance Act Insurance Dues

Electricity Tax Tamil Nadu Electricity Taxation 3.21

Finance Act, 1994 Service Tax 1.33 (Service Tax) 0.38

U. P Trade Tax Act, Tax Demand and 0.07 1948 Interest 0.07

Name of the Statue Period to which the Forum where Amount Relates Dispute is pending

Central Excise Act 1990-91 to 2009-10 Tribunal(s)

1990-91 to 2009-10 Commissioner (Appeals)

1977-78 High Court(s)

1984-85 to 2009-10 Assessing Authorities

Sales Tax Act 1981-82 to 1986-87 & 1997-98 to 2004-05 Tribunal(s)

2001-02, 2005-06 to 2006-07 & 2009-10 Commissioner (Appeals)

2000-01 to 2002-03 High Court(s) 1988-89 to 1999-00 & Assessing 2002-03 to 2006-07 Authorities

Textile Commitee Act 1981-99 Tribunal(s)

1999-05 Assessing Authorities

Entry Tax 2002-03 to 2004-05 Assessing Authorities

2006-07 to 2009-10 High Court(s)

Value Added Tax 2005-06 to 2006-07 Tribunal(s) 2005-06 & 2008-09 Commissioner (Appeals)

2005-06 to 2008-09 Assessing Authorities

Customs Act 2003-04 Tribunal(s) 1975-76 to 1976-77

1986-87 & 2001-02 High Court(s)

Income Tax Act 1994-95 to 2008-09 Commissioner (Appeals)

Employee’s State Insurance Act 1998-99 & 2003-06 Assessing Authorities

Electricity Tax Assessing 1999-00 to 2007-08 Authorities

Finance Act, 1994 (Service Tax) 2003-04 to 2006-07 Tribunal(s)

2002-03 to 2006-07 Assessing Authorities U. P. Trade Ta x Act, 1948 2002-03 Tribunal(s)

2006-07 to 2007-08 Commissioner (Appeals)

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 2,00,00,000 unsecured debentures of Rs.100 each on which no security or charge is required to be created. The Company has created security or charge in respect of secured debentures outstanding during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) According to the information and explanation given to us some irregularities by an employee has been noticed by the management in the Seeds Business. The examination related to this is in progress and the amount is yet to be quantified. The management has represented to us that the amount of irregularities is not likely to be material in the context of the size of the Company. Apart from the above, we have been informed that the Company has not noticed any fraud during the year.

For KHIMJI KUNVERJI & CO. For S.R. BATLIBOI & CO.

Firm registration number:105146W Firm registration number: 301003E

Chartered Accountants Chartered Accountants

Per Shivji K. Vikamsey Per Vijay Maniar

Partner Partner

Membership No.: 2242 Membership No.: 36738

Place: Mumbai Place: Mumbai

Date: May 07, 2010 Date: May 07, 2010