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Auditor Report of India Cements Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of THE INDIA CEMENTS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, 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 Standalone Financial Statements

The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 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 of 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. 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. Based on the procedures and evaluations referred above 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 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

a) As explained in Note No. 33.16 to the Standalone financial statements regarding the order of attachment issued under Prevention of Money laundering Act through which certain assets of the company amounting to Rs.12,034.18 lakhs have been attached vide provisional attachment Order dated 25th February 2015 which the company is disputing before legal forums. The company has been legally advised that it has strong grounds to defend its position, pending the outcome of the proceedings the impact if any is not ascertainable at this stage

b) As explained in Note No. 33.22 to the Standalone financial statements, the Company dealt with incremental depreciation on account of revaluation of fixed assets by drawing similar amount from Revaluation Reserves being a permitted practice under Guidance note issued by ICAI during 1982 amounting to Rs.4,583 lakhs for the year ending 31st March 2016. The guidance note was withdrawn during the financial year however the company viewed that the implications arising on account of withdrawal of Guidance Note on the financial statements are to be reckoned on a prospective basis.

Our opinion is not qualified in respect of the Emphasis of Matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure - A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 it 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 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 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g. 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 pending litigations on its financial position in its financial statements - Refer Note No. 33.2 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring the amounts, required to be transferred to the Investor education and protection fund by the Company.

Annexure - A to the Auditors'' Report

The Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date to the members of THE INDIA CEMENTS LIMITED on the accounts of the company for the year ended 31st March, 2016 we report that:

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

b) The company has a program of verification of fixed assets to cover all the items of Fixed assets in phased manner over a period of three years which in our opinion is reasonable having regard to the size of the company and nature of its assets. Pursuant to the program certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and the records examined by us and based on examination of such records comprising the registered sale deed/transfer deeds/conveyance deeds/ evidencing title provided to us, we report that, the title deeds comprising all the immovable properties of land (including mining lands) and buildings which are freehold, are held in the name of the company as at the balance sheet date except the following:

(Amount in INR)

Particulars of Value as at 31.03.2016 No. of Land & Building Gross Block Net Block Cases

Apartment at Delhi 11,93,454 11,93,454 1

Freehold Land - Malkapur 9,77,40,207 9,77,40,207 71

Freehold Land at Chilamkur 4,45,223 4,45,223 3

Freehold Land and Buildings 49,58,51,993 49,58,51,993 - at Yerraguntla

Freehold Land at Various Locations 50,65,673 50,65,673 59

Particulars of Land & Building Remarks

Apartment at Delhi Title is not in the name of the company

Freehold Land-Malkapur The title deeds are in the names of erstwhile companies that merged with the company under Sections 391 to 394 of the Companies Act, 1956 pursuant to schemes of amalgamation and arrangement approved by Honourable High Courts

Freehold Land at Chilamkur The title deeds are in the names of erstwhile companies or owners where the process of mutation/ registration is under progress.

Freehold Land and Buildings at Yerraguntla Land and buildings acquired from erstwhile owners along with cement plant assets are registered in favour of company, however the same is pending release of documents on account of claims relating to additional stamp duty.

Freehold Land at Various Locations Cases where the legal title is not with the company

Immovable properties of land and buildings wherever title deeds have been pledged as securities towards loans, guarantees etc., availed by the company are stated to have been held in the name of the company (the lenders have also accepted those assets as security for creating mortgages) and are pending direct confirmations from lenders.

2. As explained to us and according to information and explanations given to us the inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

3. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted anyloans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments, and providing guarantees as applicable and the company has not granted any security in terms of sections 185 and 186 of the companies act 2013.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year however in regard to the unclaimed deposits the company has complied with the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. The maintenance of cost records has been specified by the central government under section 148(1) of Companies act 2013. We have broadly reviewed the cost records maintained by the company pursuant to companies cost records and audit rules 2014 as amended, prescribed by the central government under sub-section (1) of section 148 of Companies Act, 2013, and are opinion that prima facie the prescribed cost 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.

7. According to the information and explanations given to us and on the basis of our examination of the books of account in respect of statutory dues

a) The company has generally been regular in depositing undisputed statutory dues, barring few instances of considerable delays in making payment towards Provident Fund, , Employees'' State Insurance, Income-tax, Service Tax, sales tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities. There were no undisputed amounts payable towards Provident Fund, Employees'' State Insurance, Income-tax, Service Tax, sales tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as on 31st of March, 2016 for a period of more than six months from the date they became payable.

b) Details of dues of Sales tax, Income tax, Service tax, Customs Duty, Excise duty, VAT and cess, which have not been deposited as on 31st March 2016 on account of any dispute and the forum where disputes are pending is given in Annexure - I.

8. According to the information and explanations given to us and on the basis of our examination of the books of account and based on explanations given by the management, we are of the opinion that, as at the balance sheet date the Company has not defaulted in repayment of instalments due to financial institutions, government, banks or debenture holders. In our opinion and according to the information and explanations given to us during the year the term loans have generally been applied by the company for purposes for which they were raised and the company has not raised monies by way of initial public or further public offers (including debt instruments).

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

10. In our opinion and according to the information and explanations give to us and relying on a legal advice obtained by the company, we are of the opinion that the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

11. The company is not a Nidhi company and hence reporting under Para 3 clauses (XII) of CARO 2016 order is not applicable. In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the company is in compliance with sections 177 and 188 of the Act where applicable for all transactions with related parties and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

12. During the year the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under Para (xiv) of CARO 2016 is not applicable to the company. In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them hence the provisions of section 192 of the Companies Act 2013 are not applicable.

13. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure - I to the Independent Auditors Report as mentioned in Paragraph 3(vii)(b) of CARO 2016

Sl. Name of Nature of Amount Period to which No. Statute Dues (Rs. in lakhs) amount relates

1 Central Excise Excise duty 21,011.44 Various pendings from 1988-89 to 2015-16 Act 1944 and Service Tax 2,573.05 Various pendings from 1995-96 to 2015-16

1,634.14 Various pendings from 1994-95 to 2009-10

281.23 Various pendings from 1995-96 to 2008-09

Sub Total 25,499.86

2 Central Sales Tax Sales tax/ VAT 259.78 2008-09 and 2013-14 Act, 1956 and sales tax 14.60 2012-13 & 2013-14 of various states 1,705.15 Various pendings from 1969-70 to 2012-13

57.17 2013-14

5.21 1997-98, 2005-06 and 2007-08

10.11 2014-15

108.21 Various pendings from 1989-90 to 2008-09

Sub Total 2,160.23

3 Customs act 1962 Customs Duty 5,683.33 2013-14 & 2014-15

Sub Total 5,683.33

4 Income Tax Act, 1961 Income Tax 4,055.40 2012-13

810.65 1996-97

363.83 Various periods from 1982-83 to 1986-87

5.31 1991-1992

Sub Total 5,235.19

Grand Total 38,578.61

Name of Statute Forum where disputes pending

Central Excise Act 1944 CESTAT

Commissioner (Appeals)

High Court

Supreme Court

Central Sales Tax Act, 1956 Additional Commissioner [Rev.Petition]

Commissioner (Appeals)

Appeal To High Court

Assessing Authority

D.C.Appeals

Joint Commissioner [Rev.Petition]

Sales Tax Appellate Tribunal

Customs act 1962 CESTAT

Income Tax Act, 1961 CIT (Appeals)

Supreme Court

High Court

Income Tax Appellate Tribunal

For P. S. SUBRAMANIA IYER & Co., For BRAHMAYYA & Co.,

Chartered Accountants Chartered Accountants

Firm Registration No: 004104S Firm Registration No. 000511S

V.SWAMINATHAN N.SRI KRISHNA

Partner Partner

Membership No. 22276 Membership No. 26575

Place : Chennai

Date :26th May, 2016


Mar 31, 2014

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

b. The original financial statements of the Company for the year ending 31st March 2014 were approved by the Board of Directors at its meeting held on 26th May 2014 and we have issued our audit report in terms of clause 41 of the listing agreement on those financial statements.

The audited financial statements for the financial year ending 31st March 2014 have been published in terms of listing agreement. Further the Company was in the process of seeking Regulatory Approvals for Scheme of Amalgamation for merging two of its subsidiaries with itself and an arrangement for withdrawing a sum of Rs.126.56 Crores from the General Reserve to adjust certain non-recurring items of exceptional expenditure that were debited to the P & L for the year ended March 31, 2014. The Company sought the consent of stock exchanges for said scheme. The Stock Exchange directed the Company to withdraw the portion relating to withdrawing from General Reserve to meet exceptional items of expenditure. In view of the reservations expressed by the stock exchanges against the arrangement as stated above a modified scheme has been filed before the High Court of Madras. As the adjustment of charging of expenditure against the reserves explained above stands withdrawn, the Audit Committee in its meeting held on 12th November 2014 recommended to the Board of Directors to modify the audited financial statements for the year ending 31st March 2014 (which were originally approved by the Board of Directors on 26th May 2014 and our report of even date issued in terms of clause 41 of listing agreement was qualified in this regard) and the Board of Directors in its meeting held on 12th November 2014 approved the modified financial statements for the year ending 31st March 2014.

In view of the aforesaid decision of the management vide their communication dated 12th November 2014 in accordance with the provisions of Standard on Auditing (SA) 560 on subsequent events issued by Institute of Chartered Accountants of India we are issuing this report on the modified financial statements.

2. 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 with general circular 15/2013 dated 13th September 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 give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors’ Responsibility

a. 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.

b. 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 Company''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.

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b. in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. Emphasis of Matter

a) We draw attention to note no.33.2(g) of the financial statements, regarding the appeal filed by the Company against the order of the Competition Commission of India (CCI), imposing a penalty of Rs.187.48 crores before the Competition Appellate Tribunal concerning the alleged contravention of provisions of Competition Act 2002. CCI in its interim order dated 17th May, 2013 directed the Company to pay 10% of the imposed penalty. The Company is advised by legal experts that it has good case before appellate tribunal and accordingly no provision has been considered necessary by the Company in this regard. Our opinion is not qualified in respect of this matter.

b) The Shareholders of the Company approved the remuneration paid/payable to its Directors. Owing to the inadequate profits for the current year, as computed under Section 349 of the Companies Act, 1956, the managerial remuneration paid / payable has exceeded the limits specified under Section 198 read with Section 309 of the Companies Act, 1956 by Rs.683.81 lacs. The Company is in the process of obtaining requisite approvals from the Central Government. Our opinion is not qualified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

a) 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.

b) As required by Section 227(3) of the Act, we report that:

i. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

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

iv. 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 Companies Act, 1956 read with general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

v. 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 Companies Act, 1956.

7. Other matter

a) We have restricted our audit procedures on the events subsequent to 26th May 2014 (subsequent events) as defined under SA 560 solely to the matters referred to in Clause 1(b) above which is the cause of the amendments to the original financial statements except that we have not carried out any audit procedure in relation to audited financial statements as amended.

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT (REFERRED TO IN PARAGRAPH 6(a) 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.

(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.

e) 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) a) 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 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 in relation to activity of manufacture of cement 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 instances where we noticed delays in depositing Excise duty, 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, 2014 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 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 realizable 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 and after placing reliance on the reasonable assumptions made by the Company for the classification of long-term and short- term usages of funds, certain funds raised on short term basis have been used for long term purposes amounting to Rs.88007.30 lacs. Other than these we are of the opinion that Prima facie, 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 repaid the outstanding debentures at the year end as per original terms of issue. As at the year end 31st March 2014, the Company does not have any outstanding secured debentures.

(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.

For P S. SUBRAMANIA IYER & Co., For BRAHMAYYA & Co., Chartered Accountants Chartered Accountants

Firm Registration No: 004104S Firm Registration No. 000511S

V.SWAMINATHAN N.SRI KRISHNA

Partner Partner

Membership No. 22276 Membership No. 26575

Place : Chennai

Date :12th November, 2014


Mar 31, 2013

1. Report on the Financial Statements

We have audited the accompanying financial statements of The India Cements Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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 give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors'' Responsibility

a. 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.

b. 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.

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b. in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. Emphasis of Matter

a. We draw attention to note no.33.2(f) of the financial statements, regarding the appeal filed by the Company against the Order of the Competition Commission of India (CCI), imposing a penalty of Rs.187.48 crores before the Competition Appellate Tribunal (COMPAT) concerning the alleged contravention of provisions of The Competition Act, 2002. COMPAT in its interim order dated 17th May, 2013 directed the Company to pay 10% of the imposed penalty. The Company is advised by legal experts that it has good case before appellate tribunal and accordingly no provision has been considered necessary by the Company in this regard. Our opinion is not qualified in respect of this matter.

b) We draw attention to note no.33.2(g) of the financial statements relating to the Fuel Surcharge Adjustments (FSAs) levied by the Electricity Distribution Companies in Andhra Pradesh, which has been challenged by the Company before the Hon''ble High Court of Andhra Pradesh. The Company is advised by legal experts that it has good case before High Court and accordingly no provision has been considered necessary in the accounts in this regard and the payments made under protests have been grouped under advances. Our opinion is not qualified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

a) 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.

b) As required by Section 227(3) of the Act, we report that:

i. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

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

iv. 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 Companies Act, 1956.

v. 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 Companies Act, 1956.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (REFERRED TO IN PARAGRAPH 6(a) 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.

(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.

e) 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) a) 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 in relation to activity of manufacture of cement 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, 2013 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 realizable 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 and after placing reliance on the reasonable assumptions made by the Company for the classification of long-term and short-term usages of funds, we are of the opinion that Prima facie, 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 notwithstanding 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.

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 : 20th May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of The India Cements Limited ('the Company') as at March 31, 2012 and also the relative Statement of Profit and Loss 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, 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 Balance Sheet, Statement of Profit and Loss 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, 2012 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 Companies Act, 1956 having regard to the provisions of the scheme approved by CDR cell;

(f) 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 and in particular note No. 35.19 regarding option excised by the Company for accounting foreign exchange fluctuation impact and note No. 35.18 regarding accounting for premium on redemption of Foreign Currency Convertible Bonds, 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, 2012;

(ii) In the case of the Statement of Profit and Loss, 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.

(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) a) 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 have been instances of delays in depositing Sales 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, 2012 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 Company has not defaulted in the repayment of its dues to financial institutions, banks and debenture holders. For a certain portion 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 Financial Statements of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of long-term and short-term usages of funds we are of the opinion that Prime facie, 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.

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 : 25th April, 2012

 
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