1.  We have audited the attached Balance Sheet of HeidelbergCement
 India 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 books;
 
 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 referred to in paragraph 3 of our report of even date
 Re: HeidelbergCement India Limited (the Company)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed Assets have been physically verified by the management during
 the year in accordance with a planned programme of verifying them in a
 phased manner so as to cover all assets once in three years which, in
 our opinion, is reasonable having regard to the size of the Company and
 the nature of its assets. As informed, no material discrepancies were
 noticed in respect of assets verified during the year.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) (a) The inventory of the Company have been physically verified by
 the management during the year at reasonable intervals.
 
 (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 loan, secured or
 unsecured to companies, firms or other parties covered in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (b), (c) and (d) of the Companies (Auditors Report)
 Order, 2003 (as amended), are not applicable.
 
 (b) 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, paragraphs 4 (iii) (f) and (g) of the Companies (Auditors
 Report) Order, 2003 (as amended) 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 sale
 of goods. 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) According to the information and explanations provided by the
 management, we are of the opinion that there
 
 is no contracts or arrangements referred to in section 301 of the Act
 that needs to be entered into the register maintained under section
 301. Therefore, provision of clause 4(v) (b) of the Companies
 (Auditors Report) Order, 2003 (as amended) is not applicable to the
 Company.
 
 (vi) In respect of deposits accepted, in our opinion and according to
 the information and explanations given to us,
 
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A, 58AA or any other relevant provisions of the Companies
 Act, 1956 and the rules framed there under, to the extent applicable,
 have been complied with. We are informed by the management that no
 order has been passed by the Company Law Board, National Company Law
 Tribunal, Reserve Bank of India or any Court or any other Tribunal.
 
 (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(l)(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 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. Further,
 since the Central Government has till date not prescribed the amount of
 cess payable under section 441A of the Companies Act, 1956, we are not
 in a position to comment upon the regularity or otherwise of the
 company in depositing the same.
 
 (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 undisputed 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 Statute   Nature of dues  Amount        Period to which the
                                   (Rs. in lacs) amount relates
 
 Central Sales Tax 
 Act and
 Various State     Sales Tax Act   623.89        1998-99 to 2004-05
 Sales Tax
                                 7,531.49        1994-95 to 2009-10
 
                                    25.97        1995-98 to 2007-08
 
                                    45.07        1989-90 to 1992-93 and
                                                 2000-03
 
                                   447.80        1984-85 and 2007-08
 
                                     0.11        2000-01
 
                                    57.00        1999-00 to 2002-03
 
                                     1.27        1997-98, 2002-03 and
                                                 2003-04
 
                                     5.84        2004-05
 
 Income Tax Act    Income Tax       33.92        2003-04
 
 Central Excise    Excise Duty     218.66       1995-96 to 2000-01
 Act               and Cenvat      374.97       1992-93,1996-97 and
                                                1999-2000 to 2007-08
 
                                 1,593.74       2007-08 and 2008-09  
 
 Finance Act 1994  Service TAx      37.46       2004-05,2005-06,
 (Amended -2009)                                2007-08 and 2009-10
 
 M.P. Irrigation   Water Cess       8.77        1999-2000
 Act
 
 Name of Statute                  Forum where dispute is
                                  pending
 
 Central Sales Tax Act and        Supreme Court
 
 Various State Sales Tax Act      High Court
 
                                  Tribunal
 
                                  Deputy Commissioner
                                  (Appeals)
 
                                  Deputy Commissioner
 
                                  Additional Commissioner
 
                                  Joint Commissioner
 
                                  Assessing Officer, Sales Tax
 
                                  Trade Tax Department
 
 Income Tax Act                   Income Tax Commissioner
                                  (Appeal)
 
 Central Excise Act               High Court
 
                                  Central Excise and Service
                                  Tax Tribunal
 Commissioner of Central
 Excise    
 
 Finance Act 1994                 Commissioner of Central
 (Amended - 2009)                 Excise
 
 M.P. Irrigation Act              High Court              
 
 
 (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 bank and financial
 institution. The Company has no outstanding dues in respect of
 debenture holder.
 
 (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) Based on 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 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.
 
 (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 & Co.
 Firm registration number: 301003E
 Chartered Accountants
 
 Sd/-
 per Manoj Gupta 
 Partner
 Membership No.: 83906
 
 Place: Gurgaon
 Date : February 11, 2011