1.  We have audited the attached Balance Sheet of The India Cements
 Limited (''the company'') as at March 31, 2011 and also the relative
 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 have 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 (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 issued by the Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956 of India (the Act) and on the basis of such checks
 as we considered appropriate and according to the information and
 explanations given to us, we set out 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, the Company has kept proper books of account as
 required by law 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 read together with the notes thereon dealt with by this
 report have been prepared, in all material respects, in compliance with
 the Accounting Standards referred to in sub-section (3C) of Section 211
 of the Act to the extent applicable;
 
 (e) On the basis of explanations and information given to us and
 written representations received from directors, as on March 31, 2011
 and taken on record by the Board of Directors, we report that none of
 the directors is disqualified as on March 31, 2011 from being appointed
 as a director in terms of Clause (g) of Sub Section (1) of Section 274
 of the Companies Act, 1956 having regard to the provisions of the
 scheme approved by CDR cell;
 
 (f) Attention is invited to the managerial remuneration referred in
 Note No. 23 of Notes on Accounts in Schedule No 17.  Subject to the
 excess remuneration of Rs.530 lakhs paid / payable to the Managing
 Director requiring the approval of the Shareholders and Central
 Government, 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 also
 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 March 31, 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 AUDITORS'' REPORT (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT
 OF EVEN DATE TO THE MEMBERS OF THE INDIA CEMENTS LIMITED)
 
 (i) a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) As explained to us, the Fixed Assets are physically verified by the
 management, according to a phased programme designed to cover all the
 items over a period of 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, the management during the year has verified
 a portion of fixed assets and no material discrepancies between the
 book records and physical inventory have been noticed.
 
 c) The fixed assets disposed off during the year, in our opinion, do
 not constitute substantial part of the fixed assets of the company and
 such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (ii) a) According to information and explanations given to us the
 inventories of the Company at all its locations have been physically
 verified during the year by the management. In our opinion, the
 frequency of verification is reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 c) In our opinion and according to the explanations given to us and on
 the basis of our examination of the inventory records, we are of the
 opinion that the Company is maintaining proper records of inventory.
 The discrepancies noticed on physical verification of inventory as
 compared to book records, have been properly dealt with in the books of
 accounts. However as regards non-moving and slow moving inventories,
 the management is evaluating the use of these items and pending such
 evaluation, impact, if any, has not been considered.
 
 (iii) a) According to the information and explanations given to us 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.
 
 b) According to the information and explanations given to us 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, having regard to the explanations that some of the items
 purchased/services awarded are of special nature and suitable
 alternative sources are not readily available for obtaining comparable
 quotations, there is an adequate internal control system commensurate
 with the size of the company and the nature of its business with regard
 to purchases of inventory and fixed assets and sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (v) To the best of our knowledge and belief and according to the
 information and explanations given to us, there were no transactions
 during the year pursuant to the contracts or arrangements referred to
 in Section 301 of the Act. Accordingly, sub clause (b) is not
 applicable.
 
 (vi) The Company has during the year accepted deposits from public. In
 our opinion, the company has complied with the provisions of Sections
 58A, 58AA or any other relevant provisions of the Act and Companies
 (Acceptance of Deposit) Rules, 1975. To the best of our knowledge and
 according to the information and explanations given to us, no order has
 been passed by Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal, in this
 regard.
 
 (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 cost records and accounts relating
 to materials, labour and other items of cost 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 we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have however not
 made a detailed examination of the said records with a view to
 determine whether they are accurate or complete. To the best of our
 knowledge and according to information and explanations given to us the
 Central Government has not prescribed maintenance of cost records under
 Section 209(1) (d) of the Companies Act, 1956 for any other activity of
 the Company.
 
 (ix) a) According to the records of the Company, the Company is
 generally regular in depositing the undisputed statutory dues including
 Provident Fund, Employee State Insurance, Investor Education and
 Protection Fund, Income tax, Wealth tax, Customs duty, Excise duty,
 Cess, Sales tax and Service tax and any other statutory dues applicable
 to it with the appropriate authorities though there has been few delays
 in depositing Sales tax, Service tax and provident fund.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income tax, Wealth tax,
 Service tax, Sales tax, Customs duty, Excise duty and Cess were in
 arrears as at the year end for a period of more than six months from
 the date they became payable.
 
 c) According to the information and explanations given to us, details
 of dues of Sales tax, Income tax, Wealth tax, Service tax, Customs
 duty, Excise duty and Cess, which have not been deposited as on 31st
 March, 2011 on account of any dispute is as per Annexure.
 
 (x) The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses during financial year
 covered by our audit and the immediately preceding financial year.
 
 (xi) According to the information and explanations given to us the debt
 portfolio of the Company was restructured through Corporate Debt
 Restructuring Scheme (CDR), based on the said scheme the Company has
 not defaulted in repayments of its dues to financial institution, bank
 or debenture holders.
 
 (xii) According to the information and explanations given 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) The company is not a chit fund or a nidhi mutual benefit fund
 /society. Therefore, the provisions of paragraph 4(xiii) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company.
 
 (xiv) In our opinion, and according to the information and explanation
 given to us, the company is not dealing in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of paragraph 4 (xiv) of the Companies (Auditor''s Report)
 Order, 2003 are not applicable to the Company.
 
 (xv) In our opinion, the terms and conditions on which the company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company taking
 into consideration the overall realisable value of assets and current
 business plans.
 
 (xvi) In our opinion and according to the information and explanations
 given to us and on an overall examination, the term loans have been
 applied for the purpose for which they were obtained.
 
 (xvii)In our opinion and 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) According to the information and explanations given to us, 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.
 
 (xix) According to the information and explanations given to us, the
 Company has created the securities or charges in respect of secured
 debentures issued and outstanding at the year-end as per original terms
 of issue not withstanding modifications, reschedulement and other
 changes in the terms as agreed with CDR cell.
 
 (xx) The company has not raised any money through public issue during
 the year.
 
 (xxi) 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 not come across any instance of fraud
 on or by the company, noticed or reported during the year, nor have we
 been informed of such case by the management.
 
 
 Annexure to the Auditors'' Report to the Members of The India Cements
 Limited for the year ended 31st March 2011
 
 Category     Pending With    Financial Year           Amount Rs. Lakhs
 
 Cenvat       Addl. 
              Commissioner   2007-08, 2008-09, 2009-10    104.01
              Appellate 
              Tribunal       1995-96, 1996-97, 1997-98, 
                             1999-00, 2001-02, 2005-06,
                             2006-07, 2007-08, 2008-09, 
                             2009-10, 2010-11            2047.60
 
             Asst. 
             Commissioner    1998-99, 2008-09, 2009-10, 
                             2010-11                       23.08
 
             Commissioner    2002-03, 2003-04, 2004-05, 
                             2006-07, 2007-08, 2008-09,
                             2009-10, 2010-11            2816.41
 
             Commissioner 
             (Appeals) 2      000-01, 2009-10, 2010-11     33.15
 
             Dy. Commissioner 2010-11                       0.30
 
             Jt. Commissioner 2005-06, 2010-11             50.81
 
             Superintendent   2010-11                       0.62
 
             High Court       1994-95, 1995-96, 1996-97, 
                              1997-98, 1998-99, 2000-01, 
                              2006-07, 2007-08 2008-09    258.30
 
            Supreme Court     2008-09                     709.74
 
 CST        Asst. 
            Commissioner      1973-74                       4.17
 
            High Court        1991-92, 1992-93, 1993-94    76.17
 
 Income Tax Appellate 
            Tribunal          1991-92, 2008-09            801.31
 
            High Court        1982-83, 1983-84, 1984-85, 
                              1985-86, 1986-87            363.83
 
            Supreme Court     1996-97                     810.65
 
 Sales Tax  Asst. 
            Commissioner      1970-71, 1971-72, 1975-76, 
                              1976-77, 1977-78, 1978-79,  109.30
 
            Dy. Commissioner 
           (Appeals)          1997-98, 2000-01             16.70
 
            High Court        1969-70, 1970-71, 1985-86, 
                              1986-87, 1987-88, 1988-89, 
                              1989-90, 1990-91, 1991-92,
                              1992-93, 1993-94, 1994-95, 
                              1995-96, 1996-97, 1997-98, 
                              1998-99, 2002-03            1111.49
 
 Service 
 Tax      Addl. Commissioner  1997-98, 2005-06, 2007-08, 
                              2010-11                      148.93
 
          Appellate Tribunal  2003-04, 2005-06, 2006-07, 
                              2007-08, 2008-09            1654.44
 
          Commissioner        2006-07, 2008-09, 2009-10,
                              2010-11                     5302.36
 
          Commissioner 
          (Appeals)           2000-01, 2006-07, 2007-08, 
                              2008-09                       77.45
 
           High Court         2004-05, 2005-06, 2006-07, 
                              2007-08                      178.12
 
          Jt. Commissioner    2007-08                       40.81
 
 VAT     Addl. Commissioner   2008-09                      252.61
 
         Appellate Tribunal   2005-06, 2005-11              52.81
 
         Dy. Commissioner 
         (Appeals)            2005-06, 2006-07, 2007-08    183.78
 
         High Court           2007-08, 2009-10             592.71
 
 
 
 For P. S. SUBRAMANIA IYER & Co.,              For BRAHMAYYA & Co.,
 
 Chartered Accountants                         Chartered Accountants
 
 Firm Registration No: 004104S                 Firm Registration 
                                               No. 000511S
 G.HARIHARAN                                   N.SRI KRISHNA
 
 Partner                                       Partner
 
 Membership No. 15071                          Membership No. 26575
 
 Place : Chennai 
 
 Date : 30th May, 2011