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Auditor Report of Andhra Cements Ltd.

Jun 30, 2015

We have audited the accompanying standalone financial statements of ANDHRA CEMENTS LIMITED ("the Company"), which comprises the Balance sheet as at June 30, 2015, the Statement of Profit and loss and the cash fow statement for fifteen months period ended June 30, 2015, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash fows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at June 30, 2015 and its losses and its cash fows for the period ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a. We have sought and 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, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on June 30, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with

Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of all pending litigations on its financial position in its financial statements. (Refer Note-34 to the financial statements).

ii. The Company has made provision, as required under the applicable law or accounting standards. The company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. According to the information and explanation given to us and having regard to scheme sanctioned by the BIFR and based on opinion obtained by the Company, the certain amount pertaining to unpaid matured deposits and debenture balance funds held with the banks, no amount to be transferred to the Investor Education and Protection Fund by the Company till June 30, 2015.

ANNEXURE REFERRED IN INDEPENDENT AUDITORS REPORT OF EVEN DATE

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the period ended June 30, 2015, we report that:

i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all

the fixed assets at reasonable intervals. According to the information and explanation given to us, discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

ii. a. According to the information and explanations given to us, the management has conducted physical verification of inventory at reasonable intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of the business.

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between physical stocks and book records were not material and have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, the Company has not granted any, secured or unsecured loan, to companies, forms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly the clause iii (a) and (b) of paragraph 3 of the Order are not applicable to the Company.

iv. 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 regards to purchases of inventory, fixed assets and the sale of goods and services. During the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v. In our opinion and according to the information and explanations given to us, The Company has not accepted any deposits within the meaning of Section 73 to 76 of the Act, and the rules framed there under to the extent notified. Further, in respect of deposits accepted by the Company during the earlier year, the Company Law Board (Southern Regional Bench) has by its Order dated July 07, 2001 directed the company to repay the said deposits in accordance with the scheme sanctioned by the BIFR. However, the BIFR in its Modified Rehabilitation Scheme dated July 21, 2008 directed the fixed deposits holders to accept the outstanding principal amount, in four annual installments, on interest free basis. Further, no other Order against the Company has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal. In respect of these deposits, the Company is yet to comply with the requirement of maintaining liquid assets and fling of Return of Deposit.

vi. We have broadly reviewed the books of cost records maintained by the Company pursuant to the Rules made by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed account and records have been made and maintained. We have, however, not made details examination of these records with the view to determining whether they are accurate or complete.

vii. a. According to the information and explanation given to us and on the basis of our examination of books of accounts, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, Cess and other statutory dues applicable with the appropriate authorities. No undisputed amount payable in respect of income tax, sales tax, service tax, customs duty, Cess, excise duty and any other statutory dues were in arrears as at June 30, 2015 for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, particulars of dues in respect of sales tax, service tax, value added tax and Cess which have not been deposited as on June 30, 2015 on account fo disputes and given below:

Sl. Name of the Statute Nature of Dues Amount Period Forum where dispute is No. (Rs, in to which Pending lakhs) amount relates

1 Central Excise Act,1944 Interest on duty demanded kept in 71.11 2005-06 High Court abeyance pursuant to BIFR order

2 Central Excise Act,1944 Central Excise duty 10.61 2004-05 High Court

Central Excise duty 12.76 2005-06 CESTAT

Central Excise duty 651.97 2006-12 CESTAT

Central Excise duty 371.5 2007-09 CESTAT

Central Excise duty 1.82 2010-11 CESTAT

Central Excise duty 5.62 2007-12 CESTAT

Central Excise duty 11.08 2007-11 CESTAT

Central Excise duty 3.88 2009-10 CESTAT

3 Finance Act, Service Tax 1.74 2008-10 CESTAT

Service Tax 12.74 2007-10 CESTAT

Service Tax 298.64 2007-10 CESTAT

4 APGST Act/CST Act Sales Tax 26.96 1995-96 High Court

Sales Tax 8.11 2001-02 Tribunal

Sales Tax (CST) 16.65 1991-92 Tribunal

Sales Tax (CST) 6.53 1992-93 Tribunal

Sale Tax (CST) 38.80 2010-11 Commissioner (Appeals)

5 Orissa Sales tax Act Sales Tax (ET) 0.21 2000-01 Tribunal

Sales Tax (ET) 2.77 2003-04 Tribunal

6 Tamil Nadu Sales Tax Sales Tax (CST) 12.30 1988-89 Tribunal Act

Sales Tax 13.26 1991-92 Tribunal

Sales Tax 5.83 1992-93 Tribunal Sales Tax 18.93 1996-97 Tribunal

Sales Tax 9.16 1988-89 Commissioner (Appeals)

Sales Tax 6.09 1989-90 Commissioner (Appeals)

b. There were no amounts which were due to be transferred by the company to the Investor Education and Protection Fund and rules made there under in accordance with the scheme sanctioned by the BIFR. Accordingly the clause vii (c) of paragraph 3 of the Order are not applicable to the Company.

viii. The accumulated losses of the company are more than fifty percent of its net worth. The Company has incurred cash losses during the period covered by our report and in the immediately preceding financial year.

ix. According to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.

x. 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. Accordingly the clause x of paragraph 3 of the Order are not applicable to the Company.

xi. In our opinion and according to the information and explanations given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

xii. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the company has been noticed or reported during the period.

For CHATURVEDI & PARTNERS

Chartered Accountants

Firm Registration No. 307068E



R N CHATURVEDI

Noida Partner

August 28, 2015 Membership No. 092087


Mar 31, 2014

We have audited the accompanying financial statements of ANDHRA CEMENTS LIMITED (''the Company''), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read together with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

Attention is drawn to Note 36 regarding continuance of capitalization of borrowing costs in the Capital Work in Progress for the reasons stated therein. We are unable to determine the amount of adjustment if any in this respect.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph above, the financial statements give the information required by the Act in the manner so required and 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, 2014;

ii. in the case of the Statement of Profit and Loss, of the loss 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. Except for the effect of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act read together with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e. On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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 previous year pursuant to a programme for physical verification of fixed assets once in a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. The Company is in the process of reconciling the same with the fixed asset register and we are informed by the management that based on the reconciliation being performed, discrepancies if any are not likely to be material.

c. Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. The procedures of 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. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

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, the provisions of the clause (iii)(b),

(iii)(c) and (iii)(d) of Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

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, the provisions of the clause (iii)(f) and (iii)(g) of Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v. a. In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered, if any, in the register maintained under Section 301 of the Act have been so entered.

b. In our opinion according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five Lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the company has not complied with the provisions of section 58A and 58AA of the Act and Companies (Acceptance of Deposits) Rules, 1975 with regard to the repayment of the deposits accepted from the public and maintenance of liquid assets, and filing its Annual Return of Deposits. According to the information furnished to us, the Company Law Board (Southern Regional Bench) has by its Order dated July 07, 2001, under Section 58AA, directed the company to repay the said deposits in accordance with the scheme sanctioned by the BIFR. The BIFR in its Modified Rehabilitation Scheme dated July 21, 2008 directed the fixed deposits holders to accept the outstanding principal amount, in four annual installments, on interest free basis. Further, no other Order against the Company has been passed by the Company Law Board or National Company Law Tribunal or 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 cost records maintained by the company pursuant to the Companies (Cost Accounting Records) rules, 2011 prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been made & maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. a. According to the information and explanations given to us, the Company has generally been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, custom duty and excise duty were in arrears as at March 31, 2014 for a period of more than six months from the date they became payable excepting those mentioned hereunder:

Name of Nature Amount Period to which statute of Dues (Rs. in amount relates Lacs)

TN VAT Act VAT 0.25 August 2010 - November 2010

c. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute excepting those mentioned hereunder:

S. Name of the Statute Nature of Dues Amount No. (Rs. in Lacs) 1 Central Excise Act, 1944 Interest on duty 73.11 demanded kept in abeyance pursuant to BIFR order.

2 Central Excise Act,1944 Central Excise duty 8.00

Central Excise duty 53.79

Central Excise duty 651.97

Central Excise duty 1.74

Central Excise duty 140.50

Central Excise duty 231.00

Central Excise duty 1.82

Central Excise duty 5.62

Central Excise duty 3.88

Central Excise duty 23.84

3 Finance Act, 1994 Service Tax 1.74

Service Tax 298.64

4 APGST Act/CST Act Sales Tax 35.43

Sales Tax 37.66

Sales Tax 18.34

Sales Tax 26.96

Sales Tax 8.11

Sales Tax (CST) 16.65

Sales Tax (CST) 6.53

Sale Tax (CST) 53.45

Sales Tax (CST) 193.47

5 Orissa Sales tax Act Sales Tax (ET) 0.21

Sales Tax (ET) 2.77

6 Tamil Nadu Sales Tax Act Sales Tax (CST) 12.30

Sales Tax 13.26

Sales Tax 5.83

Sales Tax 18.93

Sales Tax 9.16

Sales Tax 6.09

S. Name of the Statute Period Forum where dispute No. to which is Pending amount relates 1 Central Excise Act, 1944 2005-06 High Court 2 Central Excise Act,1944 2003-04 High Court

2003-04 CESTAT

2011-12 CESTAT

2011-12 CESTAT

2006-09 CESTAT

2007-11 CESTAT

2010-11 CESTAT

2006-12 CESTAT

2009-10 CESTAT

2007-11 CESTAT

3 Finance Act, 1994 2008-10 CESTAT

2007-10 CESTAT

4 APGST Act/CST Act 1990-91 High Court

1991-92 High Court

1992-93 High Court

1995-96 High Court

2001-02 Tribunal

1991-92 Tribunal

1992-93 Tribunal

2008-09 Commissioner (Appeals)

2009-10 Commissioner (Appeals)

5 Orissa Sales tax Act 2000-01 Tribunal

2003-04 Tribunal

6 Tamil Nadu Sales Tax Act 1988-89 Tribunal

1991-92 Tribunal

1992-93 Tribunal

1996-97 Tribunal

1988-89 Commissioner (Appeals)

1989-90 Commissioner (Appeals)

x. According to the information and explanations given to us and without considering the effect of matters described in the Basis for Qualified opinion paragraph, accumulated losses of the company are not more than fifty percent of its net worth. Further, the Company has incurred cash losses during the period covered by our report. It has also incurred cash losses in the immediately preceding financial period.

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.

xii. In our opinion and 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. In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/ society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 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. In our opinion, and according to the information and explanations given to us, term loans have been applied for the purposes for which they were raised.

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 fund raised on a short term basis have been used for long term investment except utilization of bridge loan of Rs. 10,000 Lacs for capital expenditure.

xviii. 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 during the year. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI & PARTNERS

Chartered Accountants Firm Registration No. 307068E

R N CHATURVEDI Noida Partner May 26, 2014 Membership No. 092087


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of ANDHRA CEMENTS LIMITED (''the Company'')'' which comprise the Balance Sheet as at March 31'' 2013'' the Statement of Profit and Loss and the Cash Flow Statement for the year then ended'' and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position'' financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act'' 1956 ("the Act"). This responsibility includes the design'' implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that are free from material misstatement'' whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment'' including the assessment of the risks of material misstatement of the financial statements'' whether due to fraud or error. In making those risk assessments'' the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management'' as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

Attention is drawn to Note 36'' 38 and 39 regarding balances of Trade payables'' other creditors'' Deposits'' advances and Trade receivables'' which are subject to confirmation and reconciliation'' continuance of capitalization of borrowing costs and recognition of deferred taxes on business losses. We are unable to obtain appropriate audit evidence about the carrying amount of the same. Consequently'' we are unable to determine whether any adjustments to these amounts were necessary.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us'' except for the effects of the matters described in the Basis for Qualified Opinion paragraph above'' the financial statements give the information required by the Act in the manner so required and 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'' 2013; ii. in the case of the Statement of Profit and Loss'' of the loss for the year ended on that date; and iii. in the case of the Cash Flow Statement'' of the ash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order'' 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act'' we givein the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As requiredby section 227(3) of the Act'' 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'' proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. the Balance Sheet'' the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. Except for the effect of the matters described in the Basis for Qualified Opinion paragraph'' in our opinion'' the Balance Sheet'' Statement of Profit and Loss and Cash Flow Statement'' comply with the Accounting Standards referred to in sub- section (3C) of Section 211 of the Act.

e. On the basis of written representations received from the directors as on March 31'' 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on March 31'' 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act'' 1956 nor has it issued any Rules under the said section'' prescribing the manner in which such cess is to be paid'' no cess is due and payable by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. A major portion of the fixed assets has been physically verified by the management during the year pursuant to a programme for physical verification of fixed assets'' which in our opinion'' is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us'' no material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a. The inventory has been physically verified during the year by the management. In our opinion'' the frequency of verification is reasonable.

b. The procedures of 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. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

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'' the provisions of the clause (iii)(b)'' (iii)(c) and (iii)(d)Companies (Auditors'' Report) Order'' 2003 are not applicable to the Company.

b. The Company had taken unsecured loan from two erstwhile promoter companies covered in the register maintained under section 301 of the Companies Act'' 1956. The maximum amount involved during the year was Rs. 1017 lacs and yearend balance was Rs. Nil.

c. In our opinion and according to the information and explanations given to us'' the rate of interest and other terms and conditions on which loans have been taken are not prima facie prejudicial to the interest of the Company.

d. The Company has repaid the principal amount and interest thereon'' as stipulated.

iv. In our opinion and according to the information and explanations given to us'' there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory'' fixed assets and with regard to the sale of goods and services. During the course of our audit'' we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v. a. In our opinion'' and according to the information and explanations given to us'' the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered.

b. In our opinion according to the information and explanations given to us'' the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act'' 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us'' the company has not complied with the provisions of section 58A and 58AA of the Act and Companies (Acceptance of Deposits) Rules'' 1975 with regard to the repayment of the deposits accepted from the public and maintenance of liquid assets'' and filing its Annual Return of Deposits. According to the information furnished to us'' the Company Law Board (Southern Regional Bench) has by its Order dated July 07'' 2001'' under Section 58AA'' directed the company to repay the said deposits in accordance with the scheme sanctioned by the BIFR. The BIFR in its Modified Rehabilitation Scheme dated July 21'' 2008 directed the fixed deposits holders to accept the outstanding principal amount'' in four annual installments'' on interest free basis. Further'' no other Order against the Company has been passed by the Company Law Board or National Company Law Tribunal or 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. During the year'' there were no commercial operations of the Company. Accordingly no cost records were maintained by the Company pursuant to the Companies (Cost accounting Records) Rules'' 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act'' 1956.

ix. a. According to the information and explanations given to us'' the Company is regular in depositing with the appropriate authorities undisputed statutory dues including provident fund'' investor education and protection fund'' employees'' state insurance'' income-tax'' sales-tax'' wealth tax'' service tax'' custom duty'' excise duty'' cess and any other statutory dues applicable to it.

x. According to the information and explanations given to us and without considering the effect of matters described in the Basis for Qualified opinion paragraph'' accumulated losses of the company are not more than fifty percent of its net worth. Further'' the Company has incurred cash losses during the period covered by our report. It has also incurred cash losses in the immediately preceding financial period.

xi. In our opinion and according to the information and explanations given to us'' the Company has not defaulted in repayment of dues to any financial institution'' bank or debenture holders excepting the following instances of defaulted interest and principal payment: Nature of Dues Amount Period of delay

xii. In our opinion and 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. In our opinion'' the Company is not a chit fund or a nidhi /mutual benefit fund/ society. Accordingly'' the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) Order'' 2003 are not applicable to the Company.

xiv. According to the information and explanations given to us'' the Company is not dealing or trading in shares'' securities'' debentures and other investments. Accordingly'' the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order'' 2003 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. In our opinion'' and according to the information and explanations given to us'' term loans have been applied for the purposes for which they were raised.

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 a short-term basis have been used for long-term investment.

xviii.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 during the year. Accordingly'' the provisions of clause 4 (xviii) of the Companies (Auditors'' Report) Order'' 2003 are not applicable to the Company.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any money by public issues during the year. Accordingly'' the provisions of clause 4 (xx) of the Companies (Auditors'' Report) Order'' 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us'' no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI &PARTNERS

Chartered Accountants

Firm Registration No. 307068E

R N CHATURVEDI

New Delhi Partner

April 27'' 2013 Membership No. 092087


Mar 31, 2012

1. We have audited the attached Balance Sheet of ANDHRA CEMENTS LIMITED, as at March 31, 2012, the Statement of Profit and Loss and also the Cash Flow Statement for nine months period ended on that date annexed thereto. 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 conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance 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 the 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 (the Order) issued by the Central Government of India in terms of su.b-section j(4A) of Section 227 of'the Companies Act, 1956 (the Act), and according to the information and explanation given to us and also on the basis of such checks as we considered appropriate, we, to the extent ascertainable from the available records and details, enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Attention is invited to Note 36(a) and (b) regarding non availability of confirmation/ reconciliation, etc. and non-ascertainment of adjustments with respect to advances, debtors, liabilities, etc; Note 38(a) and (b) regarding continuation of capitalization of borrowing and other cost and non-ascertainment of effect for capital supplies/ services pending completion of project.

5. Further to our comments in the Annexure referred to para 3 and para 4 above, we report that:

a. Subject to matters dealt with in para 4 above, 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, proper books of account as required b^law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, subject to
e. In respect of debentures and fixed deposits as stated in note 45 (b) and (c), the Company has received a legal opinion that there is no default in the repayment of amount due to the debenture holders and deposit holders, for which reliance has beentplaced by us. In view of this and on the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 above, impact whereof is presently not ascertainable and read together with other notes thereon give the information required by the Act, in the manner so required and 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, 2012.

ii. in the case of the Statement of Profit and Loss, of the profit for the nine month period ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows for the nine month period ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

i. a. According to the information and explanations furnished to us, the Company has not updated its records of fixed assets with particulars including quantitative details and situation of its fixed assets.

b. We are informed by the company's management thai it follows the practice of physical verification of its Fixed Assets once in a period of three years which, in our opinion is reasonable and adequate in relation to the nature and location of the Fixed Assets. However, as stated in note no. 36(a), no such physical verification of its assets was conducted by the management during the period and accordingly discrepancies, if any, arising there from are presently not ascertainable.

c. According to the information and explanation given to us, during the period, the Company has not disposed off substantial part of its fixed assets.

ii. a. According to the information and explanations given to us, the company has physically verified its inventories. In respect of certain materials stored in heaps, such verification has been done on the basis of volumetric measurement. In our opinion, the frequency of verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories being reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies noticed on verification during audit, to the extent carried out between the physical stocks and the book records were not material, and have been properly dealt with in the books of account.

iii. a. According to the information and explanations furnished to us, the Company has not granted any loans to companies, firms or other parties covered by the register maintained under Section 301 of the Act, and consequently reporting under sub- clauses (b), (c) and (d) of clause 4(iii) of the Order is not applicable to the Company for the period.

b. The Company hadin earlier year taken unsecured loans and advances from five companies of erstwhile promoters covered in the register maintained under section 301 of the Act. The maximum amount involved during the period was Rs.7,526 lacs and period end balance was Rs.1,017 lacs.

c. In our opinion, based on the information and explanations given to us, the rate of interest, where applicable, and other terms and conditions on which the loans and advances were taken are not, prima facie, prejudicial to the interests of the Company.

d. According to the information and explanations given to us as stated in note 37(b), part of amount has been repaid in accordance with the agreement.

iv. In our opinion and according to the information and explanations given to us, except during the period of disruption of operation as stated in note 35, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the company.

v. a. in our opinion and according to the information and explanations given to us and as per the record of the company, the transactions made in pursuance of contract or arrangements that need to be entered in ttie register maintained under section 301 of the Act have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract/ arrangements entered in the Register maintained u/s 301 of the Act and exceeding the value of Rupees five lakhs in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

vi. In our opinion and according to the information and explanations given to us, the company has not complied with the provisions of section 58A and 58AA of the Act and Companies (Acceptance of Deposits) Rules, ¦ 1975 with regard to the repayment of the deposits accepted from the public and maintenance of liquid assets, and filing its Annual Return of Deposits. According to the information furnished to us, the Company Law Board (Southern Regional Bench) has by its Order dated 7th July 2001, under Section 58AA, directed the company to repay the said deposits in accordance with the scheme sanctioned by the BIFR. The BIFR in its Modified Rehabilitation Scheme dated 21st July 2008 directed the fixed deposits holders to accept the outstanding principal amount, in four annual installments, on interest free basis. Further, according to the information furnished to us, no other Order has been passed on the company by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliance with the provisions of Sections 58A and 58AA of the Act.

vii. As explained in note 35, due to disruption in operation, no internal audit was carried out during the period.

viii. As explained in note 35, due to disruption in operation, there has been no production and the prescribed accounts, and records have not been maintained during the period.

ix. a. According to the information and explanations given to us, the Company has n been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income- tax, sales-tax,'wealth tax, service tax, custom duty, excise duty, and any other statutory dues applicable to it.

b. According to the information and explanations given to us, undisputed amounts payable in respect of income tax deducted/ collected at source and cess thereon, value added tax, work contract tax, provident fund, sales-tax, and excise duty, which were in arrears, as at March 31, 2012 for a period of more than six months from the date they became payable are as under:

Name of statute Nature Amount Period to which amount of the Dues (Rs. lacs) relates

Uttarakhand VAT Act VAT 32.25 September 2010

Mines & Minerals (Development & Regulation Act) 1957 Royalty & Dead Rent 12.71 August 2009 - March 2012

Finance Act, 1994 Service Tax 0.48 April 2010 - July 2010

Orissa VAT Act VAT 0.11 September 2010 to Nov - 2010

TN VAT Act VAT 0.25 August 2010 to Nov-2010

c. According to information and explanations given to us, there are no dues of sales tax, customs duty, excise duty, service tax which have not been deposited by the Company on account of any dispute except as reported hereunder:

S. Name of the Nature of Amount not Asst Year/ Pending before No Statute disputed remitted Year of amount (Rs in lakhs) demand

1 Central Excise Act, 1944. Interest on duty 73.11 2005-06 Assessing officer demanded kept in abeyance pursuant to BIFR order.

2 Central Excise Act, 1944 Central Excise duty 8.00 2004 High Court

-do- 25.34 2005 CESAST

-do- 95.78 2005 CESAST

-do- 5.69 2011-12 Commissioner (Appeals)

3 Finance Act, Service Tax 3.95 2010 CESAST

-do- 6.32 2011-12 Commissioner (Appeals)

4 APGSTAct/CST Act Sales Tax 35.43 1990-91 High Court

Sales Tax 37.66 1991-92 High Court Sales Tax 18.34 1992-93 High Court Sales Tax 26.96 1995-96 High Court Sales Tax 8.11 2001-02 Tribunal Sales Tax (CST) 16.65 1991-92 Tribunal

Sales Tax (CST) 6.53 1992-93 Tribunal

5 Orissa Sales tax Act Sales Tax 0.45 2000-01 Tribunal

Sales Tax (ET) 0.46 2001-02 Tribunal

Sales Tax (ET) 0.63 2002-03 Commissioner (Appeals)

Sales Tax (ET) 2.77 2003-04 Tribunal

Sales Tax 1.08 2004-05 Tribunal

Sales Tax 0.76 2008-09 Commissioner (Appeals)

6 Tamil Nadu Sales Tax Act Sales Tax (CST) 12.30 1988-89 Tribunal

Sales Tax 13.26 1991-92 Tribunal

Sales Tax 5.83 1992-93 Tribunal

Sales Tax 18.93 1996-97 Tribunal

Sales Tax 9.17 1988-89 Commissioner (Appeals)

Sales Tax 6.09 1989-90 Commissioner (Appeals)

x. According to the information and explanations furnished to us by the Company and having regard to the effect of matters dealt with in para 4 of our report and without considering the effect of matters dealt with in para 5 of the said report, accumulated losses of the company are not more than fifty percent of its net worth. Further, the Company has incurred cash losses during the period covered by our report. Also it has incurred cash losses in the immediately preceding financiat year.

xi. Based on the examination of the books of account and other related records and according to the information and explanations given to us, 9 instances of delays were noted in repayment of dues to financial institutions ranging from 15 days to 168 days with amounts varying from Rs. 83.17 lacs to Rs. 189.42 lacs and 9 instances of delays were noted in repayment of dues to debenture holders ranging from 12 days to 168 days with amounts varying from Rs.2.35 lacs to Rs.37.79 lacs.

xi(. In our opinion and 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. 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 Order are not applicable to the company.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order 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. In our opinion, and according to the information and explanations given to us, the Company has not raised any fresh term loans during the period.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company without considering the effect of matters dealt with in our report, we report that no funds have been used for long- term investment i.e. funding of capital work in progress and its losses.

xviii. According to the information and explanations given to us, the Company has made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the period. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

xix. The Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Order are not applicable to the company.

xx. The Company has not raised any money through a public issue during the period. Accordingly, the provisions of clause 4 (xx) of the order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For LODHA & CO. For CHATURVEDI &PARTNERS

Chartered Accountants Chartered Accountants

Firm Registration No.301051E Firm Registration NO.307068E

K.SOMESWARARAO RN CHATURVEDI

Partner Partner

Membership No.052061 Membership No. 092087

Noida Noida

May 18, 2012 May 18, 2012




Mar 31, 2010

1. We have audited the attached Balance Sheet of Andhra Cements Limited ( the company), as at 31st March 2010, its Profit and Loss Account for the year ended on that date annexed thereto, and its cash-flow statement for the year ended on that date. 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 the companys 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 issued by the 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. Attention is invited to the following notes forming part of the accounts.

a. Note No. 16 regarding write back of dues to CRA, for the reasons mentioned therein, consequent to which profit for the year is higher by Rs. 165.03 lakhs and the unsecured loans & accumulated loss at the.yearend are lower by the said amount.

b. Note No: 19 regarding confirmation/reconciliation of balances and consequential adjustment if any that may arise therefrom;

c. Note No: 20 regarding non-availability of certain information in respect of pre- take over period;

5. We further report that, had the observations made by us in 4(a) above been considered, and without considering Para 4(b) and 4(c) the effect of which cannot be determined, the profit for the year would have been Rs. 4,603.51 lakhs as against the reported profit of Rs. 4,768.54 lakhs, the accumulated loss as at the date of the Balance Sheet would have been Rs. 6,187.31 lakhs as against the reported accumulated loss of Rs. 6,022.29 lakhs and unsecured loans would have been Rs. 1960.38 lakhs as against the reported figure of Rs. 1,795.36 lakhs.

6. Further to our comments in the Annexure referred to in paragraph 3 above:

a. Subject to Para 4b and c, we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b. 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;

c. The Balance Sheet, Profit and Loss Account, and the Cash flow statement referred to in this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, Profit and Loss Account, and the Cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e. In respect of debentures as stated in Note 22 of Schedule O, the company has received a legal opinion that there is no default in the repayment of amount due to the debenture holders and deposit holders. Save and except for this, for which reliance has been placed on the legal opinion received by the Company,

on the basis of the written representations received from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

7. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account, and the cash flow statement subject to para 4 above with the consequential impact thereof as given in Para 5 above and read together with the other Notes, Schedules and Statement of Accounting Policies attached thereto, 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.

i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2010,

ii) In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash flows of the company for the vear ended on that date.





Annexure referred to in paragraph 3 of our report of even date



1.1 According to the information and explanations furnished to us, the company has not updated its records of Fixed Assets with particulars including quantitative details and situation of its fixed assets.

1.2 We are informed by the companys management that it follows the practice of physical verification of its Fixed Assets once in a period of three years which, in our opinion is reasonable and adequate in relation to the nature and location of the Fixed Assets. In keeping with the said practice, according to the information furnished to us, no such physical verification of its assets was conducted by the management during the year.

1.3 According to the information and explanations furnished to us, the company has not disposed of a substantial part of its fixed assets during the year as would effect the going concern assumption in its case.

2.1 According to the information and explanations furnished to us, the company has physically verified its inventories of raw materials, finished goods, packing materials and high value items among its stores and spares during the year. In respect of certain materials stored in heaps, such verification has been done on the basis of volumetric measurement. In our opinion, the frequency of verification is reasonable.

2.2 In our opinion, the procedures of physical verification of inventories followed by the management, to the extent carried out during the year, are reasonable and adequate in relation to the size of the company and the nature of its business.

2.3 According to the information furnished to us, the company is maintaining proper records of its inventory and the discrepancies noticed on verification, to the extent carried out during the year, between the physical stocks and the book records were not material, and have been properly dealt with in the books of account.

3.1 According to the information and explanations furnished, to us, the company has not granted any loans to companies, firms or other parties covered by the register maintained under Section 301 of the Companies Act, 1956, and consequently reporting under sub-clauses b, c and d of clause 4(iii) of the Order does not arise during the year.

3.2 According to the information and explanations furnished to us, the company has as at the date of the Balance Sheet borrowed monies aggregating to Rs. 4.24 Lakhs from two companies covered by the register maintained under Section 301 of the Companies Act, 1956.

3.3 In our opinion, based on the information and explanations furnished to us, the terms and conditions on which the company has borrowed moneys from a company covered by the register maintained under Section 301 of the Companies Act, 1956, referred to in para 3.2 above are not prima facie prejudicial to the interests of the company, considering the circumstances under which it is presently operating.

3.4 According to the information and explanations furnished to us, no terms have been stipulated with regard to regular repayment of the principal and interest on the loans taken by it from the company covered by the register maintained under Section 301 of the Companies Act, 1956, referred to in para 3.2 above, such loans having been brought in accordance with the sanctioned scheme of rehabilitation of this company.

4. 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 purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not come across any instances of major weaknesses in internal control that require correction and have so continued without correction.

5. According to the information and explanations furnished to us, and in our opinion, the arrangements entered into by the company during the year, that were required to be entered in the register maintained under section 301 of the Companies Act, 1956, have been so entered, and are not prejudicial to the interest of the company considering the circumstances under which they were entered into by the company.

6. In our opinion and according to the Information and explanations given to us, the company has not complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with regard to the repayment of the deposits accepted from the public and maintenance of liquid assets, and filing its Annual Return of Deposits. According to the information furnished to us, the Company Law Board (Southern Regional Bench) has by its Order dated 7th July 2001, under Section 58AA, directed the company to repay the said deposits in accordance with the scheme sanctioned by the BIFR. The BIFR in its Modified Rehabilitation Scheme dated 21st July 2008 directed the fixed deposits holders to accept the outstanding principal amount, in four annual instalments, on interest free basis. Further, according to the information furnished to us, no other Order has been passed on the company by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliance with the provisions of Sections 58A and 58AA of the Companies Act, 1956.

7. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account and records 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. However, we are not required to and accordingly have not carried out an audit of the same.

9.1 According to the information furnished to us, during the year , the company has generally been regular in depositing with the appropriate authorities, the undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it except for occasional delays during the year and there were no such undisputed statutory dues were in arrears, as at the date of the Balance Sheet under report, for a period of more than six months from the date they became payable.

9.2 According to the information furnished to us, the following amounts of Sales Tax, Customs Duty, Excise Duty, Cess, Income Tax, Wealth Tax, Service Tax have been disputed by the company, and hence, were not remitted to the concerned authorities at the date of the Balance Sheet under report.

10. Accumulated losses as at the yearend does not exceed fifty percent of the companys net worth, and it did not incur cash losses during the year covered by this report, or in the immediately preceding year.

11. According to the information and explanations furnished to us by the company, the companys dues to certain debenture holders amounting to Rs. 197.22 lacs have, as approved by the BIFR, been deposited in a bank account with a lien thereon in favour of debenture trustees to facilitate repayment as and when claimed.

12. According to the information furnished to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, and other securities.

13. In our opinion and according to the information and explanations furnished to us, the company is not a chit fund or a nidhi / mutual benefit fund/ society and hence, the requirements of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company during the period under report.

14. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

15. According to the information furnished to us, the company has not given any guarantees for loans taken by others from any banks or financial institutions.

16. According to the information and explanations furnished to us, the term loans raised by the company during the period have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

18. According to the information and explanations furnished to us, the company has not made any preferential allotment of Equity shares during the year to companies covered by the register maintained under Section 301 of the Act.

19. According to the information and explanations given to us, the company has created security in respect of the principal ajnount of the debentures issued by it.

20. The Company has raised money through preferential issue of shares. The management has disclosed the end use of money raised by preferential issue (Refer Note 30 in Schedule O) and the same has been verified by us.

21. During the course of our examination of the accounts of the company in accordance with generally accepted auditing practices, we have not come across any instances of fraud on or by the company, nor have we been informed by the management of any such instance being noticed or reported during the year.

For CHATURVEDI & PARTNERS

Chartered Accountants Firm Registration No.307068E

R.N.CHATURVEDI (ICAI Membership No.092087) Partner

New Delhi May 28, 2010

For LODHA & CO. Chartered Accountants Firm Registration No. 301051E

K.SOMESWARA RAO (ICAI Membership No. 052061) Partner

New Delhi May 28, 2010



 
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