1.  We have audited the attached Balance Sheet of ITC Limited (the
 Company) as at 31st March, 2012, and also the Statement of Profit
 and Loss and the Cash Flow Statement of the Company for the year ended
 on that date, both 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 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 misstatements.  An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the 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
 (CARO) issued by the Central Government of India in terms of Section
 227(4A) of the Companies Act, 1956, 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 as follows:
 
 (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, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) 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:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 ii) in the case of the Statement of Profit and Loss, 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.
 
 5.  On the basis of the written representations received from the
 Directors as on 31st March, 2012 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March, 2012 from being appointed as a director in terms of Section
 274(1)(g) of the Companies Act, 1956.
 
 In our opinion and according to the information and explanations given
 to us, the nature of the Company''s business/activities during the
 year are such that clauses (iii), (v), (x), (xii), (xiii), (xv),
 (xviii), (xix) and (xx) of Companies (Auditor''s Report) Order, 2003,
 are not applicable to the Company. In respect of the other clauses, we
 report as under :
 
 (i) In respect of its fixed assets :
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanations given to us, no material discrepancies were noticed on
 such verification.
 
 (c) During the year, in our opinion, a substantial part of fixed assets
 has not been disposed off by the Company.
 
 (ii) In respect of its inventory :
 
 (a) As explained to us, the inventories excepting material lying with
 third parties (which have substantially been confirmed) were physically
 verified during the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventory
 followed by the Management were 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 records of inventory, in our
 opinion, the Company has maintained proper records of inventory and the
 discrepancies noticed on physical verification between the physical
 stocks and the book records were not material in relation to the
 operations of the Company.
 
 (iii) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems 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 and according to the
 information and explanations given to us, we have neither come across
 nor have we been informed of any instance of major weaknesses in the
 aforesaid internal control systems.
 
 (iv) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Companies Act,
 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
 to the deposits accepted from the public. According to the information
 and explanations given to us, no Order has been passed by the Company
 Law Board or the National Company Law Tribunal or the Reserve Bank of
 India or any Court or any other Tribunal on the Company.
 
 (v) In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and the nature of its
 business.
 
 (vi) We have broadly reviewed the cost records maintained by the
 Company, including pursuant to the Companies (Cost Accounting Records)
 Rules, 2011 prescribed by the Central Government under Section
 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima
 facie the prescribed cost records have been maintained and are being
 made up. We have, however, not made a detailed examination of the cost
 records with a view to determine whether they are accurate or complete.
 
 (vii) (a) According to the information and explanations given to us and
 according to the books and records as produced and examined by us, in
 our opinion, 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 as applicable with the appropriate authorities.
 
 (b) As at 31st March, 2012, according to the records of the Company and
 the information and explanations given to us, the following are the
 particulars of dues on account of income tax, sales tax, wealth tax,
 service tax, customs duty, excise duty and cess matters that have not
 been deposited on account of any dispute :
 
 Name of     Nature of    Amount     Period to which  Forum where pending
 the statute the dues    (Rs in      the amount
                          Crores)    relates
 
                                     Various years 
                                     covering the 
                                     period
 
 Sales Tax   Sales tax       5.50    1987-2011        Appellate Authority
 and VAT     and VAT                                  upto 
                                                      Commissioners''/
 Laws                                                 Revisional 
                                                      authorities level
 
                             5.25    1994-2007        Appellate 
                                                      Authority -
                                                      Tribunal level
 
                           171.67    1994-2008        High Court
 
 Customs     Customs         0.22    2005-2007        Appellate
                                                      Authority -
 Act, 1962   duty                                     upto 
                                                      Commissioners''/ 
                                                      Revisional 
                                                      authorities level
 
                             1.28    2005-2006        Appellate 
                                                      Authority -
                                                      Tribunal level
 
 Central     Excise duty     0.48    2001-2010        Appellate
                                                      Authority -
 Excise                                               upto 
                                                      Commissioners''/
 Act, 1944                                            Revisional 
                                                      authorities level
 
                            37.84    1973-2011        Appellate
                                                      Authority - 
                                                      Tribunal level 
 
                             0.31    1991-1996        Supreme Court
 
 Finance 
 Act,        Service tax     1.99    2003-2011        Appellate 
                                                      Authority -
 1994                                                 upto 
                                                      Commissioners''/
                                                      Revisional 
                                                      authorities level
 
                             8.35    2005-2011        Appellate 
                                                      Authority -
                                                      Tribunal level
 
                             1.43    2005-2008        High Court
 
 Out of the total disputed dues aggregating Rs 234.32 Crores as above, Rs
 193.67 Crores has been stayed for recovery by the relevant authorities.
 
 (viii) According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to any financial
 institution, bank or to debenture holders during the year.
 
 (ix) In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities. The
 Company has maintained proper records of transactions and contracts in
 respect of shares, securities, debentures and other investments and
 timely entries have been made therein. All shares, securities,
 debentures and other investments have been held by the Company in its
 own name.
 
 (x) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained.
 
 (xi) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long-term investment.
 
 (xii) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no significant
 fraud on the Company has been noticed or reported during the year.
 
 
 
                                          For Deloitte Haskins & Sells 
 
                                                 Chartered Accountants
 
                                             (Registration No. 302009E)
 
                                                          P. R. Ramesh
 
 Kolkata                                                       Partner
 
 25th May, 2012                                  (Membership No. 70928)