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Auditor Report of ITD Cementation India Ltd.

Dec 31, 2014

1. We have audited the accompanying financial statements of ITD Cementation India Limited, ("the Company"), which comprise the Balance Sheet as at 31 December 2014, 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.

Management''s Responsibility for the Financial Statements

2. 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 principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 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.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 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.

5. 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

6. As stated in Note 36 to the Financials Statements, the company''s trade receivables and unbilled work in progress as at 31 December, 2014 include amounts aggregating Rs. 2,655 lakhs and Rs. 1,584 lakhs respectively, being considered as good and fully recoverable by the management. These amounts are presently under negotiation with the customers. In the absence of external balance confirmations from the customers or other alternative audit evidence to corroborate management''s assessment of recoverability of these balances and having regard to the age of these receivables, we are unable to comment on the extent to which these balances are recoverable and the consequential impact, if any, on the accompanying financial statements.

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph 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 31 December 2014;

ii) in the case of 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.

Emphasis of Matter

8. We draw attention to Note 37 to the financial statements regarding long-term trade receivables, trade receivables and unbilled work in progress aggregating to Rs. 2,863 lakhs (31 December20l3: Rs. Nil), Rs. 8,52l lakhs (31 December 2013:Rs. 11,099 lakhs) and Rs. 25,467 lakhs (31 December 2013: Rs. 25,507 lakhs) respectively outstanding as at 31 December 2014, representing various claims recognised during the earlier year based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of arbitration/ litigation, the Company has assessed the recoverability of these claims based on recommendation of Dispute Resolution Board, awards received from Arbitration Tribunal, High Court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in the Financial Statement. Our opinion is not modified in respect of these matters.

9. We draw attention to Note 38 to the financial statements which describe the uncertainty related to the recoverability of short- term advances aggregating to Rs. 6,8I9 lakhs to ITD Cemindia JV, Company''s Joint Venture. The recoverability of these advances is majorly dependent on the Joint Venture''s ability to realize the outstanding dues from its customer which are presently under litigation. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. 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

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

a. Except for the matter described in the basis for Qualified Opinion paragraph, 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 financial statements dealt with by this report are in agreement with the books of account;

d. Except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph, in our opinion, the financial statements comply with the Accounting Standards notified under the Companies Act, I 956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 ; and

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

Annexure to the Independent Auditors'' Report of even date to the members of ITD Cementation India Limited, on the financial statements for the year ended 31 December 2014.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, 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 have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly the provisions of clauses 4(iii)(b) to 4(iii) (d) of the Order are not applicable.

(e) 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 Act. Accordingly the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Hfive 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) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly the provisions of clause 4(vi) of the Order are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause

(d) of sub-section (1) of Section 209 of the Act in respect of Company''s services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) 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 other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax and excise duty on account of any dispute, is as follows:

Name of statue Nature of Amount Amount disputes (Rs.) under protest (Rs. )

Sales Tax Act/Works Sales Tax 1,659,990 - Contract Tax Act

Sales Tax Act/Works Sales Tax 67,914 34,000 Contract Tax Act

Sales Tax Act/Works Sales Tax 408,950 - Contract Tax Act

Sales Tax Act/Works VAT 26,580,593 - Contract Tax Act

Sales Tax Act/Works VAT 12,960,122 1,991,029 Contract Tax Act Sales Tax Act/Works VAT 632,339 - Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 - Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 - Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 - Contract Tax Act

Sales Tax Act/Works Sales Tax 4,528,910 - Contract Tax Act

Sales Tax Act/Works Sales Tax 3,267,931 - Contract Tax Act

Sales Tax Act/Works Sales Tax 20,076 - Contract Tax Act

Sales Tax Act/Works Sales Tax/CST/ 38,706,490 - Contract Tax Act VAT

Sales Tax Act/Works Sales Tax 8,319,618 117,125 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,709,364 - Contract Tax Act

Sales Tax Act/Works VAT/ Entry Tax 95,565,080 - Contract Tax Act

Sales Tax Act/Works VAT 63,226,914 - Contract Tax Act

Sales Tax Act/Works VAT 7,983,049 2,394,916 Contract Tax Act

Sales Tax Act/Works VAT 1,038,399 - Contract Tax Act

Central Excise Act,l944 Excise Duty 5,169,538 -

Income Tax Act, 1961 Income tax 29,622,346 -

Income Tax Act, 1961 Income Tax 54,408,408 -

Income Tax Act, 1961 Income Tax 62,952 -

Income Tax Act, 1961 Income Tax 13,784,674 -

Income Tax Act, 1961 Income Tax 27,212,390 -

Name of statue paid Period Forum where dispute is to which the pending amount relates

Sales Tax Act/Works YE. 1994-95 Revision Board (Tribunal), Contract Tax Act Kolkata Sales Tax Act/Works YE. 2003-04 Assistant Commissioner of Contract Tax Act Sales Tax, Orissa

Sales Tax Act/Works YE. 1997-98 Deputy Commissioner of Contract Tax Act Commercial Taxes

Sales Tax Act/Works YE. 2011-12 Joint Commissioner sales tax, Contract Tax Act West Bengal

Sales Tax Act/Works YE. 2009-10 Joint Commissioner of Contract Tax Act Commercial Taxes, Rajkot Sales Tax Act/Works YE. 2010-11 Joint Commissioner (Appeals) Contract Tax Act Rohtak

Sales Tax Act/Works YE. 2005-06 Assistant Commissioner, Contract Tax Act Rajasthan

Sales Tax Act/Works YE. 2004-05 Assistant Commissioner of Contract Tax Act Commercial Taxes, Bihar

Sales Tax Act/Works YE. 2003-04 Joint Commissioner of Contract Tax Act Commercial Taxes, Bihar

Sales Tax Act/Works YE. 2005-06 Taxation appellate tribunal, Contract Tax Act Patna

Sales Tax Act/Works YE. 1999-00, Joint Commissioner of Contract Tax Act 2008-09 Commercial Taxes, Bihar

Sales Tax Act/Works April 2007 to Assistant Commissioner of Contract Tax Act December 2007 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works YE. 2004-05, Appellate and revisional Contract Tax Act 2006-07, board, West Bengal 2007-08, 2008-09

Sales Tax Act/Works YE. 2006-07, Appellate Tribunal,Tamil Nadu Contract Tax Act 2007-08 & 2008-09

Sales Tax Act/Works YE. 2009-10 Appellate Deputy Contract Tax Act Commissioner of Commercial Taxes

Sales Tax Act/Works YE. 2009-10 Deputy Commissioner of Contract Tax Act and 2010-11 Commercial Taxes, Allahabad

Sales Tax Act/Works YE. 2009-10 Commissioner, Commercial Contract Tax Act & 2010-11 Taxes, Kolkata

Sales Tax Act/Works YE. 2006-07 Assistant Commissioner Contract Tax Act & 2007-08 (Appeals), Commercial Taxes, Ernakulam

Sales Tax Act/Works YE. 2005-06 Maharashtra Sales Tax Contract Tax Act Tribunal, Mumbai

Central Excise Act,l944 May 1998 to Commissioner of Central January 1999 Excise

Income Tax Act, 1961 A.Y 2003-04 and High Court, Mumbai 2004-05

Income Tax Act, 1961 A.Y 2008-09 Income Tax Appellate Tribunal

Income Tax Act, 1961 A.Y 2010-11 Assessing Officer Mumbai

Income Tax Act, 1961 A.Y 2011-12 Income Tax Appellate Tribunal

Income Tax Act, 1961 A.Y 2010-11 Commissioner of Income Tax & 2012-13 (Appeals)

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial yean

(xi) In our opinion, the Company has not defaulted in repayment of dues to any financial institution or a bank or to debenture- holders during the year

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society Accordingly provisions of clause 4(xiii) of the Order are not applicable.

(xiv) In our opinion, 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.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the yean Accordingly the provisions of clause 4(xix) of the Order are not applicable.

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

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co LLP (Formerly Walker, Chandiok & Co.) Chartered Accountants Firm Registration No.: 00I076N/N5000I3

per Amyn Jassani Partner Membership No.: 46447

Mumbai 24 February 2015


Dec 31, 2013

1. We have audited the accompanying financial statements of ITD Cementation India Limited ("the Company"), which comprise the Balance Sheet as at 31 December 2013, 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.

Management''s Responsibility for the Financial Statements

2. 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 principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 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.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 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.

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

Opinion

6. 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 December 2013;

ii) in the case of 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.

Emphasis of Matter

7. We draw attention to Note 36 to the financial statement regarding trade receivables and unbilled work in progress aggregating to Rs. 11,099 lakh (31 December 2012: Rs. 8,727 lakh) and Rs. 25,507 lakh (31 December 2012: Rs. 8,686 lakh) respectively, outstanding as at 31 December 2013, representing various claims recognised during the earlier period based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of arbitration/ litigation, the Company has assessed the recoverability of these claims based on recommendation of Dispute Resolution Board, awards received from Arbitration Tribunal, High Court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in the Financial Statement. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

8. 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.

9. 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 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 financial statements dealt with by this report are in agreement with the books of account;

d. in our opinion, the financial statements comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 ; and

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

Annexure to the Independent Auditors'' Report of even date to the members of ITD Cementation India Limited on the financial statements for the year ended 31st December 2013

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, 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 have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to 4(iii)(d) of the Order are not applicable.

(b) 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 Act. Accordingly, the provisions of clauses 4(iii) (f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 have become applicable to the Company during the previous year and the said rules have not prescribed any specific formats for the cost statements relating to company''s operations. In terms with the clarification issued by the Ministry of Corporate Affairs, the management believes that its records currently maintained by Company provide the information required under the said rules. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s operations and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is regular in depositing the 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 other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax and excise duty on account of any dispute, is as follows:

Name of the statute Nature of Amount (Rs.) Amount paid Period to which dues under protest the amount (Rs.) relates

Sales Tax Act/Works Sales Tax 1,659,990 - Y.E. 1994-95 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,323,383 34,000 Y.E. 2003-04 & Contract Tax Act 2004-05

Sales Tax Act/Works Sales Tax 408,950 - Y.E. 1997-98 Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 - Y.E. 2005-06 Contract Tax Act

Sales Tax Act/Works Sales Tax 15,450 - Y.E. 1999-00 Contract Tax Act

Sales Tax Act/Works Sales Tax 5,648,597 1,412,150 Y.E. 2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 - Y.E. 2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 32,041,940 - Y.E. 2006-07 & Contract Tax Act 2007-08

Sales Tax Act/Works Sales Tax 468,499 117,125 Y.E. 2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 - Y.E.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 115,262,781 - March 2007 Contract Tax Act to September 2010

Sales Tax Act/Works Sales Tax 7,781,391 - Y.E. 2005-06 & Contract Tax Act 2008-09

Sales Tax Act/Works Sales Tax 20,076 - April 2007 to Contract Tax Act December 2007

Sales Tax Act/Works Sales Tax 4,409,081 - Y.E.2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 7,851,119 - Y.E. 2007-08 & Contract Tax Act 2008-09

Sales Tax Act/Works Sales Tax 1,709,364 - Y.E.2009-10 Contract Tax Act

Sales Tax Act/Works VAT/ Entry 89,650,000 - Y.E. 2009-10 Contract Tax Act Tax

Sales Tax Act/Works VAT 63,226,914 - Y.E. 2009-10 & Contract Tax Act 2010-11

Sales Tax Act/Works VAT 7,983,049 2,394,916 Y.E. 2006-07 & Contract Tax Act 2007-08

Sales Tax Act/Works VAT 1,038,399 - Y.E. 2005-06 Contract Tax Act

Central Excise Act, Excise Duty 5,169,538 - May 1998 to 1944 January 1999

Income Tax Act, 1961 Income Tax 21,075,346 - A.Y.2004-05

Income Tax Act, 1961 Income Tax 54,408,408 - A.Y. 2008-09 Income Tax Act, 1961 Income Tax 21,585,017 - A.Y.2007-08 to 2011-12



Name of the statute Forum where dispute is pending

Sales Tax Act/Works Revision Board (Tribunal), Kolkata Contract Tax Act

Sales Tax Act/Works Assistant Commissioner of Sales Tax contract Tax Act

Sales Tax Act/WOrks Deputy Commissioner of Commercial Taxes Contract Tax Act

Sales Tax Act/Works Assistant Commissioner , Rajasthan contract Tax Act

Sales Tax Act/Works Joint Commissioner of Commercial Taxes contract Tax Act

Sales Tax Act/Works Excise and Taxation Commissioner, Punjab Contract Tax Act

Sales Tax Act/Works Assistant Commissioner of Commercial Contract Tax Act Taxes, Bihar

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, West Bengal

Sales Tax Act/Works Assistant Commissioner of Commercial contract Tax Act Taxes, Tamil Nadu

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, Bihar

Sales Tax Act/Works Appellate Deputy Commissioner, contract Tax Act Andhra Pradesh

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, Bihar

Sales Tax Act/Works Assistant Commissioner of Commercial contract Tax Act Taxes, Uttar Pradesh

Sales Tax Act/Works Appellate And Taxation Tribunal High contract Tax Act Court, Tamil Nadu

Sales Tax Act/Works Appellate Deputy Commissioner of contract Tax Act Commercial Taxes

Sales Tax Act/Works Deputy Commissioner of Commercial contract Tax Act Taxes, Allahabad

Sales Tax Act/ Works Commissioner, Commercial Taxes, Kolkata contract Tax Act

Sales Tax Act/Works Assistant Commissioner (Appeals), contract Tax Act Commercial Taxes, Ernakulam

Sales Tax Act/Works Joint Commissioner of Sales Tax, Mumbai contract Tax Act

Central Excise Commissioner of Central Excise Act. 1944

Income Tax Act,1961 High Court, Mumbai

Income Tax Act,1961 Income Tax Appellate Tribunal

Income Tax Act,1961 Commissioner of Income Tax (Appeals)

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to any bank or financial institution during the year. The Company did not have any outstanding debentures during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(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 Order are not applicable.

(xiv) In our opinion, 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.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

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

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co

Chartered Accountants

Firm Registration No.: 001076N

per Amyn Jassani

Partner

Membership No.: F-46447

Mumbai

26 February 2014


Dec 31, 2012

1. We have audited the attached Balance Sheet of ITD Cementation India Limited, (the ''Company'') as at 31 December2012, and also the Statement of Prof t and Loss and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the ''f nancial statements''). These f nancial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these f nancial 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 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 (the ''Order'') (as amended), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the ''Act''), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. We draw attention to notes 36 to 40 to the financial statements regarding trade receivables and un-billed work in progress aggregating to Rs. 8,727 lakhs and Rs. 8,686 lakhs (31 December 2011: Rs. 8,288 lakhs and Rs. 8,686 lakhs) respectively,outstanding as at 31 December 2012, representing various claims recognised during the earlier period based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of litigation, the Company has assessed the recoverability of these claims based on recommendation of dispute resolution board, awards received from arbitration tribunal, high court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in these financial statements.

5. Further to our comments in the Annexure referred to 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, 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 f nancial statements dealt with by this report are in agreement with the books of account;

d. On the basis of written representations received from the directors, as on 31 December 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 December 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

e. In our opinion and to the best of our information and according to the explanations given to us, the financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act and the Rules framed there under and 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, in the case of:

(i) the Balance Sheet, of the state of affairs of the Company as at 31 December 2012;

(ii) the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors'' Report of even date to the members of ITD Cementation India Limited on the f nancial statements for the year ended 31 December 2012

Based on the audit procedures performed for the purpose of reporting a true and fair view on the f nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, 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 have been physically verif ed by the management during the year and no material discrepancies were noticed on such verif cation. In our opinion, the frequency of verif cation of the f xed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of f xed assets has not been disposed of during the year.

(ii) (a) The management has conducted physical verif cation of inventory at reasonable intervals during the year.

(b) The procedures of physical verif cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verif cation.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, f rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to 4(iii)(d) of the Order are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, f rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and f xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees f ve lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 have become applicable to the Company during the current year and the said rules have not prescribed any specif c formats for the cost statements. In terms with the clarif cation issued by the Ministry of Corporate Af airs, the management believes that its records currently maintained by Company provide the information required under the said rules. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s operations and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is regular in depositing the 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 other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax, excise duty on account of any dispute, is as follows:

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

Sales Tax Act/Works Sales Tax 1,659,990 Y.E. 1994-95 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,289,383 Y.E. 2003-04 & 2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 408,950 Y.E. 1997-98 Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 YE.2005-06 Contract Tax Act

Sales Tax Act/Works Sales Tax 15,450 Y.E. 1999-00 Contract Tax Act

Sales Tax Act/Works Sales Tax 4,236,447 YE.2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 YE.2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 32,041,940 Y.E. 2006-07 & 2007-08 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,112,354 YE.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 4,68,499 Y.E. 2007-08 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 YE.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 115,262,781 March 2007 to September Contract Tax Act 2010

Sales Tax Act/Works Sales Tax 7,781,391 Y.E. 2005-06 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 20,076 April 2007 to December Contract Tax Act 2007

Sales Tax Act/Works Sales Tax 44,09,081 YE.2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 7,851,119 Y.E. 2007-08 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,709,364 YE.2009-10 Contract Tax Act

Sales Tax Act/Works Sales Tax 23,208,189 YE.2008-09 Contract Tax Act

Sales Tax Act/Works Entry Tax 1,150,000 YE.2008-09 Contract Tax Act

Central Excise Duty Excise Duty 5,169,538 May 1998 to January 1999

Income Tax Act, 1961 Income Tax 53,030,830 YE.2004-05

Income Tax Act, 1961 Income Tax 7,737,391 YE.2007-08, 2008-09 & 2009-10

Name of the Statute Forum where dispute is pending

Sales Tax Act/ Works Contract Tax Act Revision Board (Tribunal), Kolkata

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Sales Tax

Sales Tax Act/ Works Contract Tax Act Deputy Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner , Rajasthan

Sales Tax Act/ Works Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Excise and Taxation Commissioner, Punjab

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Bihar

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes, West Bengal

Sales Tax Act/ Works Contract Tax Act Commercial Tax Of cer , Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes, Bihar

Sales Tax Act/ Works Contract Tax Act Appellate Deputy Commissioner,Andhra Pradesh

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes,Bihar

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Uttar Pradesh

Sales Tax Act/ Works Contract Tax Act Appellate And Taxation Tribunal

Sales Tax Act/ Works Contract Tax Act High Court, Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Appellate Deputy Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Additional Commissioner, Uttar Pradesh

Sales Tax Act/ Works Contract Tax Act Additional Commissioner, Uttar Pradesh

Central Excise Duty Commissioner of Central Excise

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

(x) In our opinion, the Company has no accumulated losses at the end of the f nancial year and it has not incurred cash losses in the current and the immediately preceding f nancial year.

(xi) In our opinion, the Company has not defaulted in repayment of dues to a f nancial institution or a bank or debenture-holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benef t fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

(xiv) In our opinion, 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.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

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

(xxi) Except as referred in Note 47 to the f nancial statements, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co

Chartered Accountants

Firm Registration No.: 001076N

per Amyn Jassani

Partner

Membership No.: F-46447

Place : Mumbai

Date : 28 February 2013


Dec 31, 2011

1. We have audited the attached balance sheet of ITD Cementation India Limited ('the Company') as at December 31, 2011 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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 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) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we draw attention to :

i. Schedule 20 (x)(a) and (b) of the financial statements which states that sundry debtors at December 31, 2011 include Rs. 1,449 lakhs (previous year Rs. 2,964 lakhs) relating to price escalation and variation claims which are disputed by the customer. These claims are in various stages of litigation and the reliability of these amounts is dependent upon these matters being finally resolved in favor of the Company.

ii. Schedule 20(xi) of the financial statements which states that work-in-progress at December 31, 2011 includes Rs 2,757 lakhs (previous year Rs 2,757 lakhs) in respect of a contract which has been rescinded by the Company and Rs 5,929 lakhs (previous year Rs 5,929 lakhs) in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs (previous year Rs 616 lakhs) and Rs. 2,227 lakhs (previous year Rs. 2,227 lakhs) for these contracts respectively. The Company has made claims against the customer to recover these amounts and intends to pursue these matters, if necessary, through legal action. Based upon legal advice received, management is reasonably conf dent of recovery of these amounts of work in progress and consequently no changes have been made to the values and classification of these amounts in the financial statements. The recovery of these amounts is dependent upon these matters ultimately being resolved in favor of the Company.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on December 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December

31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. a. As described in Schedule 20(xii)to the financial statements, sundry debtors at December 31, 2011 include variation claims of Rs. 3,455 lakhs (previous year Rs. 3,910 lakhs) which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (previous year Rs. 2,346 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,109 lakhs (previous year Rs. 1,564 lakhs) which have since been challenged by the customer (previous year Rs 1,109 lakhs challenged by the customer). Our audit report on the financial statements for the year ended December 31, 2010 was also qualified in respect of this matter;

b. As described in Schedule 20(xiii) to the f nancial statements, sundry debtors at December 31, 2011 include Rs. 3,384 lakhs (previous year Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31, 2010 was also qualified in respect of this matter;

c. In our view there is an uncertainty in respect of reliability of the claims and receivables described in paragraphs vi (a) and (b) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable to comment on the adjustments, if any, that may be necessary to revenue, sundry debtors, the profit before tax, reserves and earnings per share reported in the financial statements for the years ended December 31, 2011 and December 31, 2010;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and, subject to our comments in paragraph 5 (vi) above, the impact of which on the financial statements cannot be ascertained, 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 af airs of the Company as at December 31, 2011;

(b) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

(c) in the case of cash flow statement, of the cash fowls for the year ended on that date.

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

Re: ITD Cementation India Limited ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verify action.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verify action is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correcr any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees f flaks have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth- tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of wealth-tax, service tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues Amount Period to which the amount Forum where dispute is pending (Rs) relates

Sales Tax Act / Works Tax 1,659,990 Year ended Revision Board (Tribunal) Kolkata Contract Tax Act March 31, 1995

Sales Tax Act / Works Tax 33,914 Year ended Assistant Co -mmissioner of Sales Contract Tax Act March 31, 2004 Tax

Sales Tax Act / Works Tax and Penalty 2,255,469 Year ended Assistant Commissioner of Contract Tax Act March 31, 2005 Commercial Taxes

Sales Tax Act / Works Tax 408,950 Year ended Deputy Commi -ssioner of Contract Tax Act March 31, 1998 Commercial Taxes

Sales Tax Act / Works Tax 18,500 Year ended Assistant C -ommissioner, Rajasthan

Contract Tax Act March 31, 2006

Sales Tax Act / Works Penalty 15,450 Year ended Assistant Co mmissioner of Contrac Tax Act March 31, 2000 Commercial Taxes

Sales Tax Act / Works Tax 4,236,447 Year ended March 31, 2007 Excise and Taxation Offi cer, Punjab Contract Tax Act

Sales Tax Act / Works Tax 3,196,927 Year ended Assistant Co -mmissioner of Contract Tax Act March 31, 2005 Commercial T -axes, Bihar

Sales Tax Act / Works Tax 5,667,105 Year ended Deputy Commi -ssioner of Contract Tax Act March 31, 2007 Commercial T -axes, West Bengal

Sales Tax Act / Works Tax 1,112,354 Year ended Commercial T -ax Offi cer, Contract T ax Act March 31, 2004 Tamil Nadu

Sales Tax Act / Works Tax 295,916 Period from April 1, 2007 to Commercial -Tax Offi cer, Contract Tax Act March 31, 2009 Tamil Nadu

Sales Tax Act / Works Tax 2,254,954 Year ended Asst Commis -sioner of Commercial Contract Tax Act March 31, 2004 Taxes,Bihar

Sales Tax Act / Works Tax 26,325,047 Year ended Commercial T -ax Offi cer, West

Contract Tax Act March 31, 2008 Bengal Central Sales Tax Tax 49,788 Year ended Commercial T -ax Offi cer, West March 31, 2008 Bengal

Sales Tax Act / Works Tax 152,480,520 Period from March 2007 to Deputy Commissioner of Contract Tax Act September 2010 Commercial T -axes, Andhra Pradesh

Sales Tax Act / Works Penalty 75,438,787 Period from March 2007 to Assistant Co -mmissioner of Contract Tax Act September 2010 Commercial T -axes, Andhra

Pradesh Sales Tax Act / Works Tax 3,252,481 Year ended Assistant Commissioner of

Contract Tax Act March 2009 Commercial T -axes, Bihar_

Sales Tax Act / Works Tax 20,076 Period from April 2007 to Assistant Commissioner of

Contract Tax Act December 2007 Commercial T -axes, Uttar Pradesh

Sales Tax Act / W orks Tax 136,241,989 Year ended Excise and T -axation Of cer,

Contract Tax Act March 2008 Haryana

Sales Tax Act / Works Tax 4,528,910 Year ended Joint Commis -sioner of

Contract Tax Act March 2006 Commercial Taxes, Bihar

Sales Tax Act / Works Tax 2,890,752 Year ended Deputy Commi -ssioner of

Contract Tax Act March 2009 Commercial T -axes, West Bengal

Central Excise Duty Duty 5169,538 Period from May 1998 to Commissioner Offi central Excise January 1999

Income Tax Act, 1961 Tax dema -nded 53,030,830 Year ended Commissioner of Income Tax - on assess -ment March 31, 2004 (Appeals) u/s 144

Income Tax Act, 1961 Tax dema -nded 151,511,711 Year ended ITAT on asses -sment March 31, 2005 u/s 143(3)

Income Tax Act, 1961 Tax dema -nded 21,746,692 Year ended ITAT on asses -sment March 31, 2006 u/s 144_

Income Tax Act, 1961 TDS tax 7,737,391 Year ended Commissioner of Income Tax - deman -ded on March 31, 2007 to March 31, (Appeals) assess -ment 2009

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by an unincorporated joint ventures of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money from public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. Batliboi & Associates

Firm Registration No. 101049W

Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai

February 29, 2012


Dec 31, 2010

1. We have audited the attached balance sheet of ITD Cementation India Limited (the Company) as at December 31,2010 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we draw attention to :

i. Schedule 20 (x) of the financial statements which states that sundry debtors at December 31, 2010 include Rs. 2,964 lakhs (previous year Rs. 2,655 lakhs) relating to price escalation and variation claims which are disputed by the customer. These claims are in various stages of litigation and the realisability of these amounts is dependent upon these matters being finally resolved in favour of the Company. Of this an amount of Rs. 309 lakhs was a subject matter of qualification in the previous year.

ii. Schedule 20 (xi) of the financial statements which states that work-in-progress at December 31, 2010 includes Rs. 1,812 lakhs, in respect of a contract which has been rescinded by the Company and Rs. 2,174 lakhs in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs and Rs. 2,227 lakhs. The Company intends to pursue these matters, if necessary, through litigation. The realisability of these amounts is dependent upon these matters ultimately being resolved in favour of the Company. Based upon legal/expert advice received, management is reasonably confident of recovery of these amounts of work in progress.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on December 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. a. As described in Schedule 20 (xii)to the financial statements, sundry debtors at December 31,2010 include variation claims ofRs. 3,910 lakhs (previous year Rs. 5,042 lakhs) which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (previous year Rs. 2,801 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,564 lakhs (previous year Rs. 2,241 lakhs) of which, an amount ofRs. 1,109lakhs (previousyearRs. 2,241 lakhs) havesince been challengedby the customer.Our audit report on the financial statements for the year ended December 31,2009 was also qualified in respect of this matter,

b. As described in Schedule 20 (xiii) to the financial statements, sundry debtors at December 31,2010 include Rs.3,384 lakhs (previous year Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31,2009 was also qualified in respectofthis matter;

c. In our view there is an uncertainty in respect of readability of the claims and receivables described in paragraphs vi (a) and (b) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable tocomment on the adjustments,ifany,that may be necessary to revenue, sundry debtors,the profit before tax,reserves and earnings per share reported in the financial statements for the years ended December 31,2010 and December 31,2009;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and, subject to our comments in paragraph 5 (vi) above, theimpactofwhich on the financial statements cannot be ascertained, give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the balance sheet, of the state of affairs of the Company as at December 31, 2010;

(b) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

(c) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date Re: ITD Cementation India Limited (the Company)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification. -

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of wealth-tax, service tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues [Amount (Rs.)

Sales Tax Act / Works Tax 3,175,428 Contract Tax Act

Sales Tax Act / Works Tax 67,914 Contract Tax Act

Sales Tax Act / Works Tax and Penalty 2,255,469 Contract Tax Act

Sales Tax Act / Works Tax 408,950 Contract Tax Act

Sales Tax Act / Works Tax 18,500 Contract Tax Act

Sales Tax Act / Works Penalty 15,450 Contract Tax Act

Sales Tax Act / Works Tax 5,648,597 Contract Tax Act

Sales Tax Act / Works Tax 3,196,927 Contract Tax Act

Sales Tax Act / Works Tax 5,667,105 Contract Tax Act

Sales Tax Act / Works Tax 1,125,354 Contract Tax Act

Sales Tax Act / Works Tax 295,916 Contract Tax Act

Sales Tax Act / Works Tax 2,254,954 Contract Tax Act

Sales Tax Act / Works Tax 26,325,047 Contract Tax Act

Central Sales Tax Tax 49,788

Central Excise Duty Duty 5,169,538

Income Tax Act, 1961 Tax demanded on 53,030,830 assessment u/s 144

Income Tax Act, 1961 Tax demanded on 151,511,711 assessment u/s 143(3)

Income Tax Act, 1961 Tax demanded on 21,746,692 assessment u/s 144



Name of the Statue Period to which the Forum where amount relates dispute is pending

Sales Tax Act / Works Contract Tax Act Year ended Revision Board (Tribunal) March 31, 1995 Kolkatta

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner March 31, 2004 of Sales Tax

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2005 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Deputy Commissioner of March 31,1998 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner, March 31,2006 Rajasthan

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2000 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Excise and Taxation Officer, March 31, 2007 Punjab

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2005 Commercial Taxes, Bihar

Sales Tax Act / Works Contract Tax Act Year ended Deputy Commissioner of March 31,2007 Commercial Taxes, West Bengal

Sales Tax Act / Works Contract Tax Act Year ended Commercial Tax Officer, March 31,2004 Tamil Nadu

Sales Tax Act / Works Contract Tax Act Period from April 1, 2007 Commercial Tax Officer, to March 31, 2009 Tamil Nadu

Sales Tax Act / Works Contract Tax Act Year ended Asst Commissioner of March 31,2004 Commercial Taxes, Bihar

Sales Tax Act / Works Contract Tax Act Year ended Commercial Tax Officer, March 31,2008 West Bengal

Central Sales Tax Year ended Commercial Tax Officer, March 31,2008 West Betngal

Central Excise Duty Period from May 1998 Commissioner of Central to January 1999 Excise

Income Tax Act, 1961 Year ended Commissioner of Income March 31,2004 Tax - (Appeals)

Income Tax Act, 1961 Year ended ITAT March 31,2005

Income Tax Act, 1961 Year ended ITAT March 31, 2006

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by an unincorporated joint venture of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money from public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. Batliboi & Associates

Firm registration number: 101049W

Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai February 24, 2011




Dec 31, 2009

1. We have audited the attached balance sheet of ITD Cementation India Limited (the Company) as at December 31, 2009 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we draw attention to:

i. Note 29 to the financial statements. According to this, the Company has in prior years recognized price escalation claims on two road contracts which were disputed by the customer. For the period from inception of the contract to December 31, 2009 the aggregate claims recognised as revenue amount to Rs. 2,028 lakhs (previous year Rs. 2,028 lakhs). Sundry debtors at December 31, 2009 include Rs. 1,140 lakhs (previous year Rs. 1,140 lakhs) in respect of these escalation claims. The Company has received favourable verdicts in the Dispute Redressal Board and thereafter in Arbitration in respect of these amounts. The Company has till date not recovered these amounts. The Customer has appealed against the Arbitration award and the realisability of this amount is dependent on this matter being finally resolved in favour of the Company.

ii. Note 33 to the financial statements. According to this, sundry debtors as at December 31, 2009 include variation claims of Rs. 1,515 lakhs (including Rs. 554 lakhs recognized as revenue and Rs. 525 lakhs recognized as interest income during year ended December 31, 2009) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court. The customer has further challenged this court order and realisability of this amount would be dependent on this matter being finally resolved in favour of the Company. This matter was qualified in our audit report for the year ended December 31, 2008.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on December 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. a. As described in Note 30 to the financial statements, sundry debtors at December 31, 2009 include variation claims of Rs. 5,042 lakhs (previous year Rs. 4,182 lakhs) recognized upto December 31, 2009, which are disputed by the customer. Outofthis, claims amounting to Rs. 2,801 lakhs (previous year Rs. 3,817lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 2,241 lakhs which have since been challenged by the customer. Our audit report on the financial statements for the year ended December 31, 2008 was also qualified in respect of this matter;

b. As described in Note 31 to the financial statements, debtors include Rs. 3,384 lakhs (previous year Rs. 3,384lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31, 2008 was also qualified in respect of this matter;

c. As described in Note 32 to the financial statements, sundry debtors at December 31, 2009 include an amount of Rs. 1,225 lakhs (previous year Rs. 1,225 lakhs) recognized as income in the earlier years. Based on the payment schedule originally agreed with the customer, the above mentioned claim was expected to be received by the Company over a period of time commencing from financial year 2008/2009. No amounts have been received by the Company till date and further rescheduling of the payment which was in progress at December 31, 2008 has not yet been finalised. The realisability of this amount of Rs. 1,225 lakhs is dependent upon finalization of the rescheduled payment plan and the customer adhering to the same. Our audit report on the financial statements for the year ended December 31, 2008 was also modified in respect of this matter;

d. In our view there is an uncertainty in respect of realisability of these claims and receivables described in paragraphs vi(a) to (c) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable to comment on the adjustments, if any, that may be necessary to turnover, sundry debtors, the profit before tax, reserves and earnings per share reported in the financial statements for the years ended December 31, 2009 and December 31, 2008;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and subject to our comments in paragraph 5(vi) above, the impact of which on the financial statements cannot be ascertained, give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the balance sheet, of the state of affairs of the Company as at December 31, 2009;

(b) in the case of profit and loss account, of the profit of the Company for the year ended on that date; and

(c) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date Re: ITD Cementation India Limited (the Compay)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of wealth-tax, service-tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues Amount (Rs) Period to which the Forum where amount relates dispute is pending

Sales Tax Act/Works Tax 3,175,428 Year ended Revision Board (Tribunal) Contract Tax Act March 31, 1995 Kolkatta

Sales Tax Act/Works Tax 67,914 Year ended Assistant Commissioner of Contract Tax Act March 31, 2004 Sales Tax

Sales Tax Act/Works Tax and Penalty 2,255,469 Year ended Assistant Commissioner of Contract Tax Act March 31, 2005 Commercial Taxes

Sales Tax Act/Works Tax 408,950 Year ended Deputy Commis -sioner of Contract Tax Act March 31, 1998 Commercial Taxes

Sales Tax Act/Works Tax 18,500 Year ended Assistant Comm -issioner, Contract Tax Act March 31, 2006 Rajasthan

Sales Tax Act/Works Penalty 15,450 Year ended Assistant Commi -ssioner of Contract Tax Act March 31, 2000 Commercial Taxes

Sales Tax Act/Works Penalty 3,094,104 Year ended Deputy Commiss -ioner of Contract Tax Act March 31, 2006 Commercial Taxes

Sales Tax Act/Works Tax 5,566,213 Year ended Deputy Commiss -ioner of Contract Tax Act March 31,2005 Commercial Taxes, Kakinada

Sales Tax Act/Works Tax 599,703 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2006 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works Tax 1,360,373 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2007 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works Tax 5,648,597 Year ended Excise and Taxa -tion Officer, Contract Tax Act March 31, 2007 Punjab

Sales Tax Act/Works Tax 3,196,927 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2005 Commercial Taxes, Bihar

Sales Tax Act/Works Tax 5,667,105 Year ended Deputy Commiss -ioner of Contract Tax Act March 31, 2007 Commercial Taxes, West Bengal

Central Excise Duty Duty 5,169,538 Period from May 1998 Commissioner of to January 1999 Central Excise

Income Tax Act, 1961 Tax demanded on 363,612 Year ended Deputy Commiss -ioner of assessment u/s 143(3) March 31, 2002 Income Tax

Income Tax Act, 1961 Penalty u/s 271(1 )(c) 216,513 Year ended Deputy Commiss -ioner of March 31, 2002 Income Tax

Income Tax Act, 1961 Penalty u/s 271(1 )(c) 511,780 Year ended Assistant Commis -sioner of March 31, 2003 Income Tax

Income Tax Act, 1961 Tax demanded on 53,030,830 Year ended Commissioner of assessment u/s 144 March 31, 2004 Income Tax - (Appeals)

Income Tax Act, 1961 Tax demanded on 151,511,711 Yearended ITAT assessment u/s 143(3) March 31, 2005

Income Tax Act, 1961 Tax demanded on 21,746,692 Yearended ITAT assessment u/s 144 March 31, 2006

Income Tax Act, 1961 Penalty u/s 271 (1 )(c) 266,963 Year ended CIT(A) March 31,2001

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by an unincorporated joint venture of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money from public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R.Batliboi & Associates Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai March 4, 2010

 
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