1.  We have audited the attached balance sheet of ABB Limited (the
 Company) as at December 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
 Companys management. Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of sub-
 section (4A) of Section 227 of the Companies Act, 1956, 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 appears from our examination of
 those books;
 
 iii. The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 iv. In our opinion, the balance sheet, profit and loss account and cash
 flow statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956;
 
 v. On the basis of the written representations received from the
 directors, as on December 31, 2010, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 December 31, 2010 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 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 December 31,2010;
 
 b) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re: ABB
 limited (the Company)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a regular programme of physical verification of
 fixed assets which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. In accordance with
 this programme, fixed assets were physically verified by the management
 during the year and that 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) The Company has not granted any loans, secured or unsecured
 to companies, firms or other parties covered in the register maintained
 under section 301 ofthe Companies Act, 1956.
 
 (e) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 oftheCompaniesAct, 1956.
 
 Accordingly the provisions of clause (iii) (b), (c), (d), (f) and (g)
 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, no major weakness has been
 noticed in the internal control system in respect of these areas.
 During the course of our audit, we have not observed any continuing
 failure to correct major weakness in internal control system ofthe
 company.
 
 (v) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act, that need to be
 entered into the register maintained under section 301 have been so
 entered. None of the transactions made in pursuance of such contracts
 or arrangements exceed the value of Rupees five lakhs in respect of any
 one such party in the financial year.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system commen-
 surate 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 Companies
 Act, 1956, and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.
 
 (ix) (a) According to the records ofthe company, the Company is regular
 in depositing undisputed statutory dues including provident fund,
 investor education and protection fund, employees state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty, cess and other material statutory dues with the appropriate
 authorities.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise
 ofthe 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 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, cess and other material statutory dues on account of any dispute,
 are as follows:
 
 Name of the Statute        Nature of Dues           Amount*
                                                 (Rs. in Thousands)
 
 Faridabad Development   Product Classification      30,400
 Act [Octroi]
 
 Sales Tax Act           Submission of
                         Statutory Forms                900
 
                                                     18,153
                                                    367,411
 
                                                        635
                                                      8,745
                                                      8,988
 
                         Differential Tax Charged   286,945
 
                                                     14,775
 
                                                  1,172,373
 
                                                    757,544
 
                        Works Contract Tax Charged    2,450
 
                                                      8,126
                                                     14,692
 
 Service Tax            Taxon Foreign Payments       17,547
 
                                                      2,516
                                                     13,426
 
                        Tax on Freight Charges and
                        Erection Services            17,011
 
                                                      3,422
 
 Customs Act            Tariff Classification        22,735
 
                                                        271
 
 
 Name of the            Period to which the    Forum where dispute
 statue                                              is pending
                         amount relates
 
 Faridabad Development
 Act [Octroi]              1986-94                High Court
 
 Sales Tax Act             1994-95                High Court
 
                           1998-03        Deputy Commissioner(Appeals)
 
                           2003-08              Joint Commissioner of
                                            Commercial Taxes(Appeals)
                           2004-05        Joint Commissioner(Appeals)
                      
                           2005-07       Sales Tax Appellate Tribunal
 
                           2006-07              Joint Commissioner of
 
                                                    Commercial Taxes
 
                           1994-07       Sales Tax Appellate Tribunal
 
                           2001 -08      Deputy Commissioner