1.  We have audited the attached Balance Sheet of Hindustan Unilever
 Limited (the Company) as at 31st March, 2011, and the related Profit
 and Loss Account and Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. 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 the 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 by Companies (Auditor’s Report) (Amendment) Order, 2004
 (together the Order), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’
 of India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 a) 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;
 
 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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) 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;
 
 e) On the basis of written representations received from the directors,
 as on 31st March, 2011 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2011 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 Section 274 of the Act;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii) in the case of the 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 the
 Auditors’ Report of even date to the members of Hindustan Unilever
 Limited on the financial statements for the year ended 31st March,
 2011]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover items at all the
 locations once in two years which, in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, fixed assets at certain locations were
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties) has been
 physically verified by the Management during the year. In respect of
 inventory lying with third parties, these have substantially been
 confirmed by them. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, 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) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  The Company has neither granted nor taken any loans, secured or
 unsecured, to/ from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act. Consequently, clauses
 (iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 of
 the Order are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, 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, fixed assets
 and for the sale of goods and services. Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, there are no transactions made in pursuance of such
 contracts or arrangements and exceeding the value of Rupees Five Lakhs
 in respect of any party during the year, which have been made at prices
 which are not reasonable having regard to the prevailing market prices
 at the relevant time.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act, 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 records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing 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
 as applicable with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of wealth tax
 which have not been deposited on account of any dispute, and the
 particulars of excise duty, sales tax, customs duty, income-tax,
 service tax and cess as at 31st March, 2011 which have not been
 deposited on account of a dispute are as follows:
 
 Name of the statute     Nature of dues       Amount under
                                              dispute not yet
                                              deposited
                                              Rs. In Crores
 
 The Central Excise 
 Act,                 Excise duty including       43.45
 1944                 interest and penalty, as
                      applicable                  63.31
 
                                                   0.11
                                                   0.26
 
 Central Sales 
 Tax Act              Sales tax including        101.45
 and Local Sales 
 Tax Acts            interest and penalty, as 
 (including works 
 contract)           applicable                   18.79
 
                                                  43.58
 
                                                   0.12
 
 Customs Act, 1962   Customs duty including        0.56
                     interest and penalty, as
                     applicable
 
 Income-tax Act, 
 1961                Income tax including         85.70
                     interest and penalty, as
                     applicable                  127.08
 
                                                   0.32
 
 Service Tax         Service tax including         3.49
 (Finance Act, 1994) interest and penalty, as
                     applicable                    3.67
 
 
 Name of the Statue        Periods to which    Forum where the dispute is
                           the amount relates           pending
 
 The Central Excise Act,
 1944                      1982, 1983, 1985
                           to 2010             Appellate Authority - upto
                                               Commissioner’s level
                           1992 to 2010        Tribunal
                           1999, 2003          High Court
                           1979 to 1983        Supreme Court
 
 Central Sales Tax Act
 and Local Sales Tax Acts
 (including works contract)1985 to 2010        Appellate Authority - upto
                                               Commissioner’s level
                           1984, 1985, 1992
                            to 2009            Tribunal
 
 Customs Act, 1962         1976 to 1977,       High Court
 
                           1998 to 2001, 2003
                           1995 to 1997, 2000  Supreme Court
 
 Customs Act, 1962         1995                Appellate Authority - upto
                                               Commissioner’s level
 
 Income-tax Act, 1961      1979-80, 1995-96    Appellate Authority - upto
                                               Commissioner’s level
                           1985-86, 1991-92    Tribunal
                           2004-05, 2005-06
                           1988-89             High Courts
 
 Service Tax
 (Finance Act, 1994)       2004 to 2010        Appellate Authority - upto
                                               Commissioner’s level
                           2005, 2009          Tribunal
 
 10.  The Company has no accumulated losses as at 31st March, 2011, and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  The Company has not obtained any term loans.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 material fraud on or by the Company, noticed or reported during the
 year, nor have we been informed of such case by the Management.
 
                                          For Lovelock & Lewes
 
                             Firm Registration Number: 301056E
                                         Chartered Accountants
 
                                             Sharmila A. Karve
 
                                                      Partner
 Mumbai: 9th May, 2011                    Membership No: 43229