UltraTech Cement Ltd

To The Members of UltraTech Cement Limited

1. We have audited the attached Balance Sheet of ULTRATECH CEMENT LIMITED("the Company") as at March 31, 2010, the Profit and Loss Account and the CashFlow Statement of the Company for the year ended on that date, both annexed thereto, inwhich are incorporated the Returns from the Jafrabad, Magdalla and Ratnagiri units (threeunits) audited by the branch auditors. These financial statements are the responsibilityof the Company’s Management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued bythe Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give inthe 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 reportthat:

(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 it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the three units audited bythe branch auditors; whose reports have been forwarded to us and have been dealt with byus in preparing this report;

(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account and the audited unitReturns;

(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report are in compliance with the Accounting Standardsreferred to in Section 211(3C) of the Companies Act, 1956;

(v) 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 inthe 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 atMarch 31, 2010;

(b) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

5. On the basis of the written representations received from the Directors as on March31, 2010 taken on record by the Board of Directors, we report that none of the Directorsis disqualified as on March 31, 2010 from being appointed as a director in terms ofSection 274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’s business / activities / resultsclauses (x) regarding cash loss incurred by the Company, (xiii) regarding chit fund, nidhi/ mutual benefit fund / societies and (xiv) regarding dealing or trading in shares,securities, debentures and other investments of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification, which in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us, no material discrepancies were noticed on suchverification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal has, in our opinion,not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by theManagement at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iv) According to the information and explanations given to us, the Company has neithergranted nor taken any loans secured or unsecured loans to / from companies, firms or otherparties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company and thenature of its business with regard to the purchases of inventory and fixed assets and thesale of goods and services. During the course of our audit, we have not observed any majorweaknesses in such internal control system.

(vi) To the best of our knowledge and belief and according to the information andexplanations given to us, there were no contracts or arrangements, particulars of whichneeded to be entered in the Register maintained under Section 301 of the Companies Act,1956.

(vii) According to the information and explanations given to us, the Company has notaccepted any deposit from the public in terms of the provisions of Sections 58A and 58AAor any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of the Company’s business.

(ix) 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 in respect of the manufacture of cement andare of the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have, however, not made a detailed examination of the records with a viewto determining whether they are accurate or complete. To the best of our knowledge andaccording to the information and explanations given to us, the Central Government has notprescribed the maintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory dues,including Provident Fund, Investor Education and Protection Fund,

Employees’ State Insurance, Income-Tax, Sales-Tax, Value Added Tax, Wealth Tax,Service Tax, Custom Duty, Excise Duty, Cess and other material statutory duesapplicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax,Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at March31, 2010 for a period of more then six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax,Customs Duty, Excise Duty and Cess which have not been deposited as on March 31, 2010 onaccount of disputes are given below:

(xi) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to banks, financial institutions anddebenture holders.

(xii) In our opinion and according to the information and explanations given to us, theCompany has not granted loans and advances on the basis of security by way of pledge ofshares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us,the Company has not given guarantees for loans taken by others from banks or financialinstitutions.

(xiv) In our opinion and according to the information and explanations given to us, theterm loans have been, applied for the purposes for which they were obtained, otherthan temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us, andon an overall examination of the Balance Sheet we report that funds raised on short-termbasis have not been used during the year for long-term investment.

(xvi) According to the information and explanations given to us and the recordsexamined by us, during the year, the Company has not made preferential allotment of sharesto parties and companies covered in the Register maintained under Section 301 of theCompanies Act, 1956.

(xvii) According to the information and explanations given to us, during the periodcovered by our audit report, the Company has not issued any debentures.

(xviii) During the year, the Company has not raised money by issue of shares to public.

(xix) 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, andaccording to the information and explanation given to us, we have neither come across anyinstance of fraud on or by the company, noticed or reported during the year nor have webeen informed of such case by the management.