ACC Ltd

TO THE MEMBERS OF ACC LIMITED

1. We have audited the attached Balance Sheet of ACC Limited (‘the Company’)as at December 31, 2011 and also the Profit and Loss Account and the Cash Flow Statementfor the year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issuedby the Central Government of India in terms of sub-section (4A) of Section 227 of theCompanies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 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 ourknowledge 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 theCompany so far as appears from our examination of those books;

iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt 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 onDecember 31, 2011, and taken on record by the Board of Directors, we report that none ofthe directors is disqualified as on December 31, 2011 from being appointed as a directorin 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 explanationsgiven 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 accountingprinciples generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as atDecember 31, 2011;

b) in the case of the Profit and Loss Account, of the profit for the year ended on thatdate; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on thatdate.

For S.R. BATLIBOI & ASSOCIATES

Firm Registration number: 101049W

Chartered Accountants

per Sudhir Soni

Partner

Membership No.: 41870

Place: Mumbai

Date: February 09, 2012

ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph 3 of our Report of even date) Re: ACC Limited (‘theCompany’)

(i) (a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which, in our opinion, is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies 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 reasonableintervals during the year.

(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, the Company hasnot granted any loans, secured or unsecured to companies, firms or other parties coveredin the register maintained under Section 301 of the Companies Act, 1956. Accordingly, theprovisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company andhence not commented upon.

(e) According to the information and explanations given to us, the Company has nottaken any loans, secured or unsecured from companies, firms or other parties covered inthe register maintained under section 301 of the Companies Act, 1956. Accordingly, theprovisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company andhence not commented upon.

(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 andthe nature of its business, for the purchase of inventory and fixed assets and for thesale of goods and services.

During the course of our audit, we have not observed any major weakness or continuingfailure to correct major weakness in the internal control system of the company in respectof these areas.

(v) (a) In our opinion, there are no contracts or arrangements that need to be enteredin the register maintained under Section 301 of the Companies Act, 1956. Accordingly,sub-clause (b) is not applicable.

(vi) The Company has not accepted any deposits from the public to which the provisionsof Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and theCompanies (Acceptance of Deposit) Rules, 1975 apply.

(vii) In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 209(1) (d) of the Companies Act, 1956 related to the manufacture of Cement, andare of the opinion that prima facie, the prescribed accounts and records have been madeand 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 andprotection fund, employees’ state insurance, income tax, sales tax, wealth tax,service tax, custom duty, excise duty, cess and other material statutory dues havegenerally been regularly deposited during the year with appropriate authorities except Rs.2.48 Crores at certain locations where we are informed that the Company has applied forexemption from the operation of the Employees’ State Insurance Act, 1948.

(b) According to the information and explanations given to us, no undisputed amountspayable in respect of provident fund, investor education and protection fund,employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customsduty, excise duty, cess and other material statutory dues were outstanding, at the yearend, 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 anydispute, are as follows:

(x) The Company has no accumulated losses at the end of the financial year and it hasnot 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 bythe management, we are of the opinion that the Company has not defaulted in repayment ofdues to financial institutions, bank or debenture holders.

(xii) According to the information and explanation given to us and based on thedocuments and records produced before us, the company has not granted loans and advanceson 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 4(xiii) of the Companies (Auditor’s 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 4(xiv) of theCompanies (Auditor’s Report) Order, 2003 (as amended) are not applicable to theCompany.

(xv) According to the information and explanations given to us, the Company has notgiven 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 loanswere applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties orcompanies 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 andoutstanding 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 theCompany.

(xxi) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bymanagement, except for certain instances of fraud on the Company by vendors andemployees, as detailed in note 10 B in Schedule 18 to the financial statements, wereport that no fraud on or by the Company has been noticed or reported during the courseof our audit.

For S.R. BATLIBOI & ASSOCIATES

Firm Registration number: 101049W

Chartered Accountants

per Sudhir Soni

Partner

Membership No.: 41870

Place: Mumbai

Date: February 09, 2012