1.  We have audited the attached Balance Sheet of ACC 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 to the Auditors Report (Referred to in paragraph 3 of our
 Report of even date) Re: ACC Limited (the Company)
 
 (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 programme 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) 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) In our opinion, 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 Companies Act, 1956.
 Accordingly, sub-clause (b), (c) and (d) 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 Companies Act, 1956.
 Accordingly, sub-clause (f) and (g) 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 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 of the company.
 
 (v) (a) According to the information and explanations provided by the
 management, there were no transactions during the year pursuant to the
 contracts or arrangements referred to in Section 301 of the Act.
 Accordingly, sub-clause (b) is not applicable.
 
 (vi) The Company has not accepted any deposits from the public to which
 the provisions of Section 58A, 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Companies (Acceptance of Deposit)
 Rules, 1975 apply.
 
 (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 Companies Act, 1956, 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) According to the records of the Company, provident fund,
 investor education and protection fund, employees state insurance,
 income tax, sales tax, wealth tax, service tax, custom duty, excise
 duty, cess and other material statutory dues applicable to it have
 generally been regularly deposited during the year with appropriate
 authorities except Rs. 1.92 Crore at certain locations where we are
 informed that the Company has applied for exemption from the operation
 of the Employees State Insurance Act, 1948.
 
 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 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 material 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:
 
                                                         Rs. Crore
 
                                      Forum where dispute
                                        is pending
 
 Name of        Period to which      Commiss-    Appellate
 Statute        the amount relates   ionarate   authorities 
 (Nature of dues)                               & Tribunal
 
 Sales Tax (Tax/ 1982-83 to 2010-11   53.43         43.97
 Penalty/ 
 Interest)
 
 Central Excise 
 Act             1982-83 to 2010-11    0.63         18.95
 (Duty/Penalty/
 Interest)
 
 Service Tax 
 under           2000-01 to 2010-11     -            2.14
 Finance Act, 1994
 (Tax/Penalty/
 Interest)
 
 Cess Matters    2001-02 to 2010-11   10.55           -
 
 
 Name of Statue           Forum where dispute is pending
 (Nature of dues>             High         Supreme           Total
                              Court          Court          Amount
 
 Sales Tax (Tax/
 Penalty/ Interest)           208.20         6.12           311.72
 
 Central Excise Act
 (Duty/Penalty/
 Interest)                      1.16         2.04            22.78
 
 Service Tax under
 Finance Act, 1994
 (Tax/Penalty/
 Interest)                      -             -               2.14
 
 Cess Matters                   3.75        13.91            28.21
 
 (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 financial
 institutions, bank or debenture holders.
 
 (xii) According to the information and explanation given to us and
 based on the document and records provided to us, the company has not
 granted loans and advances on the basis of security by way of pledge of
 share, 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
 (xiii) of the Companies (Auditors Report) Order, 2003 (as amended) 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 (xiv) of the Companies (Auditors Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (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 not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 Section 301 of the Companies Act, 1956.
 
 (xix) The Company has created securities or charge in respect of
 debentures issued and outstanding at the year end.
 
 (xx) The Company has not raised any money by the way of public issue
 during the year. Therefore the provisions of clause (xx) of the said
 Order are not applicable to the Company.
 
 (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, except for
 two instances of fraud on the Company by its employees involving
 misappropriation of funds by falsification of documents that resulted
 in a loss of Rs. 0.48 Crore, which the management is making efforts to
 recover, we report that no fraud on or by the Company has been noticed
 or reported during the course of our audit.
 
 For S. R. Batliboi & Associates
 
 Firm Registration No. 101049W
 Chartered Accountants
 
 per Sudhir Soni
 
 Partner
 
 Membership No. 41870
 
 Place: Mumbai
 
 Date: February 03, 2011