1.  We have audited the attached Balance Sheet of Ambuja Cements
 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;
 
 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 Annexure referred to in paragraph 3 of our report of even date
 Re: Ambuja Cements Limited (the Company)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a programme for physical verification on a
 rotational basis, which, in our opinion, is reasonable having regard to
 the size of the Company and the nature of its assets. Accordingly,
 certain fixed assets have been physically verified by the management
 during the year and 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) 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 the 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, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (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 Companies
 Act, 1956, 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 Statue              Nature of Dues            Amount **
                                                     (Rs. In crores)
 
 Central Excise Act, 1944    Demand of Excise           1.26
                             Duty on clearance          0.25
                             of Cement &                0.01
                             Others
 
                             Denial on Modvat           5.83
                             Credit on input and        3.72
                             Capital goods              1.15
 
                                                        0.43
 
                                                        0.75
 
                                                        2.06
 
 Name of Statue         Period to which the    Forum where dispute is
                         amount relates             pending
 
 Central Excise Act,       2005-2007                CESTAT
 1944                      2006-2007                CESTAT*
 
                           1999-2007            Commissioner A
 
                           2004-2008                CESTAT
 
                           2001-2005                CESTAT*
 
                           1994-2004             Commissioner A
 
                           1995-2007             Commissioner A*
 
                           1993-2004             High Court*
 
                           1996-2002             Supreme Court*
 
 Name of Statue            Nature of Dues               Amount **
                                                     (Rs. In crores)
 
                           Denial of Service            0.20
                           tax Act
 
                                                        2.24
 
                                                        0.55
 
                                                        0.01
 
 Central Sales Tax 
 Act and                  Demand of Sales             151.33
 Various State Sales Tax  tax / Additional tax /        5.27
                          Purchase tax                  3.30
 
                                                        7.76
 
 Custom Act, 1962         Demand of                     0.99
                          Customs Duty                  0.02
 
                                                        0.52
                                                        0.44
 
 Rajasthan Provisional 
 Collection               Environmental Cess            8.03
 of Taxes Act, 1958
 
 Chhattisgarh Upkar       Mineral Area                  4.33
 (Sanshodhan 
 Adhiniyam) 2004          Development Cess
 
 
 
 Name of Statue       Period to which the    Forum where dispute is
                         amount relates          pending
 
                          2005-2006              CESTAT*
 
                          2005-2007              CESTAT
 
                          2005-2006           Commissioner (A)
 
                          2005-2006           High Court*
 
 Central Sales Tax Act and
 Various State Sales Tax  1991-2010           Commissioner
 
                          2005-2010           High Court
 
                          1999-2008           Supreme Court
 
                          1992-2008           Tribunal
 
 Custom Act, 1962         1996-2007           CESTAT*
 
                          1996-2007           Deputy Commissioner
 
                          1996-2009           CESTAT
 
                          2000-2008           Deputy Commissioner
 
 Rajasthan Provisional Collection
 of Taxes Act, 1958       2006-2010           High Court
 
 Chhattisgarh Upkar
 (Sanshodhan Adhiniyam) 
 2004                     1982-1991           High Court
 
 * In respect of these cases the Department is in appeal
 
 ** Net of amount deposited
 
 (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 to 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 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 4(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) The Company did not have any term loans outstanding during the
 year.
 
 (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 did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money through a public issue during
 the year. Accordingly, the provisions of clause (xx) of the 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, 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 number: 101049W
 Chartered Accountants
 
 per Sudhir Soni
 
 Partner
 
 Membership No.: 41870
 
 Place : Mumbai
 
 Date  : February 03, 2011