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