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Auditor Report of JK Cement Ltd.

Mar 31, 2014

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of J.K. Cement Limited ("the Company"), which comprise the Balance Sheet as at March 3 1, 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 FORTHE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section I 33 of the Companies Act, 201 3.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

AUDITOR''S RESPONSIBILITY

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

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

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 3 1, 2014;

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

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

EMPHASIS OF MATTER

Without qualifying our opinion, we draw attention to Note No. 36.1 (A) (IV) of the financial statements relating to the order of the Competition Commission of India (CO), concerning alleged contravention of the provisions of the Competition Act, 2002 and imposing a penalty of Rs. 12854 lacs on the company The company is advised that it has a good case before Competition Appellate Tribunal and accordingly no provision has been considered necessary by the company in this regard.

REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS

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

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

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

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

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

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular I 5/2013 dated 13th September 2013 of Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013

e. On the basis of written representations received from the directors as on March 3 1, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 3 1, 2014, from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

Re: J.K. CEMENT LIMITED

Referred to in Paragraph I under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

i. In respect of its Fixed Assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets other than furniture and fixtures and office equipments.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of fixed assets during the year and therefore, do not effect going concern assumption.

ii. In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and discrepancies noticed on verification between physical stocks and the book records were not material.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to or from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to the information and explanations given to us :

(a) The Company had granted Unsecured Loans to Two Companies. The maximum amount involved during the year was Rs. 379 lacs and the yearend balance of such loan granted was Rs. 379 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company

(c) No terms and conditions for repayment of the loan are stipulated.

(d) There is no overdue amount of such loans.

(e) The Company has not taken any Loan from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. As the Company has not taken any Loans, Secured or Unsecured, from parties listed in the register maintained under section 301 of the Companies Act, 1956, the provisions of clause

4(iii)(f) and (g) of the Companies (Auditor''s Report) Order; 2003 are not applicable to the Company

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

v. In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

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

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956,therefore, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order; 2003, are not applicable to the Company

vii. In our opinion, the Company has an adequate internal audit system commensurate with the 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 maintenance of cost records under section 209 (l)(d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.

ix. According to the information and explanations given to us, in respect of statutory and other dues:

(a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax ,wealth tax, services tax, customs, excise duty were in arrear as at 31st March, 2014 for a period more than six months from the date they became payable.

(c) According to the records of the company income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute, are as follows :-

Name of the Statute Nature of the Dues Amount Period to which Forum where Dispute is (Rs. in Lacs) Amount Relates Pending

Finance Act 2008 (State) Environment and 1714.54 2008-09 to 201 3-14 Jodhpur High Court and Health Cess Bangalore High Court

State Sales Tax Act Sales Tax 4932.37 1991-92 onwards Various Court in Uttar Pradesh and Rajasthan

Central Sales Tax Act Sales Tax 1334.55 1999 Onwards Appeal with D.C.S.T

Rajasthan Entry Tax Entry Tax 6287.67 July 2006 Onwards Appeal with Jodhpur High Court

Rajasthan Entry Tax Interest on Entry Tax 2456.13 2002-03 Onwards Appeal with Jodhpur High Court

Uttar Pradesh Entry Tax Interest on Entry Tax 314.47 2008-09 and 2009-10 Appeal with Supreme Court

Central Excise Act, 1944 Excise Duty including 419.02 1989 Supreme Court Interest thereon

Finance Act, 1994 Service Tax 1085.42 June, 2007 to March, 2008 Central Excise Department

Central Excise Act, 1944 Excise Duty including 1598.51 July 1999 to March, 2008 Central Excise Department Interest

Service Tax Service Tax on GTA 228.89 - Central Excise Department

x. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank.

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any 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, 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. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order; 2003, are not applicable to the Company.

xv. The company has given guarantees for loans taken by others from banks and financial institution .According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

xvi. In our opinion, the term loans have been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company we are of the opinion that there are no funds raised on short term basis that have been used for long-term investment.

xviii. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year

xix. According to information and explanations given to us, the Company had created the security in respect of debentures issued.

xx. The Company has not raised any money by public issue during the year

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

For P.L.TANDON & Co

Chartered Accountants

Registration Number: 000186C

Signature

P.P. SINGH

Place : Kanpur (PARTNER)

Dated : 17th May 2014 Membership Number: 072754


Mar 31, 2013

We Have Audited The Accompanying Financial Statements Of J.K. Cement Limited ("The Company"), Which Comprise The Balance Sheet As At 31st March, 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

Management Is Responsible For The Preparation Of These Financial Statements That Give A True And Fair View Of The Financial Position, Financial Performance And Cash Flows Of The Company In Accordance With The Accounting Standards Referred To In Sub-Section (3C) Of Section 211 Of The Companies Act, 1956 (''The Act''). This Responsibility Includes The Design, Implementation And Maintenance Of Internal Control Relevant To The Preparation And Presentation Of The Financial Statements That Give A True And Fair View And Are Free From Material Misstatement, Whether Due To Fraud Or Error.

Auditor''s Responsibility

Our Responsibility Is To Express An Opinion On These Financial Statements Based On Our Audit. We Conducted Our Audit In Accordance With The Standards On Auditing Issued By The Institute Of Chartered Accountants Of India. Those Standards Require That We Comply With Ethical Requirements And Plan And Perform The Audit To Obtain Reasonable Assurance About Whether The Financial Statements Are Free From Material Misstatement.

An Audit Involves Performing Procedures To Obtain Audit Evidence About The Amounts And Disclosures In The Financial Statements. The Procedures Selected Depend On The Auditor''s Judgment, Including The Assessment Of The Risks Of Material Misstatement Of The Financial Statements, Whether Due To Fraud Or Error. In Making Those Risk Assessments, The Auditor Considers Internal Control Relevant To The Company''s Preparation And Fair Presentation Of The Financial Statements In Order To Design Audit Procedures That Are Appropriate In The Circumstances. An Audit Also Includes Evaluating The Appropriateness Of Accounting Policies Used And The Reasonableness Of The Accounting Estimates Made By Management, As Well As Evaluating The Overall Presentation Of The Financial Statements.

We Believe That The Audit Evidence We Have Obtained Is Sufficient And Appropriate To Provide A Basis For Our Audit Opinion.

Opinion

In Our Opinion And To The Best Of Our Information And According To The Explanations Given To Us, The Aforesaid Financial Statements Give The Information Required By The Act In The Manner So Required And Give A True And Fair View In Conformity With The Accounting Principles Generally Accepted In India:

(A) In The Case Of The Balance Sheet, Of The State Of Affairs Of The Company As At 31st March, 2013;

(B) In The Case Of The Statement Of Profit And Loss , Of The Profit For The Year Ended On That Date; And

(C) In The Case Of The Cash Flow Statement, Of The Cash Flows For The Year Ended On That Date.

Emphasis OF MATTER

Without Qualifying Our Opinion, We Draw Attention To Note No. 36.1 (A) (IV) Of The Financial Statements Relating To The Order Of

The Competition Commission Of India (CCI), Concerning Alleged Contravention Of The Provisions Of The Competition Act, 2002 And Imposing A Penalty Of Rs. 12854 Lacs On The Company. The Company Is Advised That It Has A Good Case Before Competition Appellate Tribunal And Accordingly No Provision Has Been Considered Necessary By The Company In This Regard.

REPORT ON OTHER LEGAL AND REGULATORY Requirements

1. As Required By The Companies (Auditor''s Report) Order, 2003 (''The Order'') Issued By The Central Government Of India In Terms Of Sub-Section (4A) Of Section 227 Of The Act, We Give In The Annexure A Statement On The Matters Specified In Paragraphs 4 And 5 Of The Order.

2. As Required By Section 227(3) Of The Act, We Report That:

A. We Have Obtained All The Information And Explanations Which To The Best Of Our Knowledge And Belief Were Necessary For The Purpose Of Our Audit;

B. In Our Opinion Proper Books Of Account As Required By Law Have Been Kept By The Company So Far As Appears From Our Examination Of Those Books;

C. The Balance Sheet, The Statement Of Profit And Loss, And The Cash Flow Statement Dealt With By This Report Are In Agreement With The Books Of Account;

D. In Our Opinion, The Balance Sheet, The Statement Of Profit And Loss, And The Cash Flow Statement Comply With The Accounting Standards Referred To In Subsection (3C) Of Section 211 Of The Companies Act, 1956;

E. On The Basis Of Written Representations Received From The Directors As On 31st March, 2013 And Taken On Record By The Board Of Directors, None Of The Directors Is Disqualified As On 31st March, 2013 From Being Appointed As A Director In Terms Of Clause (G) Of Sub-Section (1) Of Section 274 Of The Companies Act, 1956.

F. Since The Central Government Has Not Issued Any Notification As To The Rate At Which The Cess Is To Be Paid Under Section 441A Of The Companies Act, 1956 Nor Has It Issued Any Rules Under The Said Section, Prescribing The Manner In Which Such Cess Is To Be Paid, No Cess Is Due And Payable By The Company.

Annexure To The Auditors'' Report

Re: J.K. Cement Limited

Referred To In Paragraph 1 Under The Heading Of "Report On Other Legal And Regulatory Requirements" Of Our Report Of Even Date

I. In Respect Of Its Fixed Assets:

(A) The Company Has Maintained Proper Records Showing Full Particulars, Including Quantitative Details And Situation Of Fixed Assets Other Than Furniture And Fixtures And Office Equipments.

(B) All The Assets Have Not Been Physically Verified By The Management During The Year But There Is A Regular Programme Of Verification Which, In Our Opinion, Is Reasonable Having Regard To The Size Of The Company And The Nature Of Its Assets. No Material Discrepancies Were Noticed On Such Verification.

(C) In Our Opinion And According To The Information And Explanations Given To Us, The Company Has Not Made Any Substantial Disposal Of Fixed Assets During The Year.

ii. In Respect Of Its Inventories:

(A) As Explained To Us, Inventories Have Been Physically Verified During The Year By The Management At Reasonable Intervals.

(B) In Our Opinion And According To The Information And Explanations Given To Us, The Procedures Of Physical Verification Of Inventories Followed By The Management Are Reasonable And Adequate In Relation To The Size Of The Company And The Nature Of Its Business.

(C) In Our Opinion And According To The Information And Explanations Given To Us, The Company Has Maintained Proper Records Of Its Inventories And Discrepancies Noticed On Verification Between Physical Stocks And The Book Records Were Not Material.

iii. In Respect Of Loans, Secured Or Unsecured, Granted Or Taken By The Company To Or From Companies, Firms Or Other Parties Covered In The Register Maintained Under Section 301 Of The Companies Act 1956, According To The Information And Explanations Given To Us:

(A) The Company Had Granted Interest Free Unsecured Loans To Two Companies. The Maximum Amount Involved During The Year Was Rs. 6356.13 Lacs And The Yearend Balance Of Such Loan Granted Was NIL.

(B) The Above Loans Are Interest Free And Other Terms And Conditions On Which Loans Have Been Granted To Such Parties Are Not Prima Facie Prejudicial To The Interest Of The Company.

(C) No Terms And Conditions For Repayment Of The Loan Are Stipulated.

(D) There Is No Overdue Amount Of Such Loans.

(E) The Company Has Not Taken Any Loan From Companies, Firms Or Other Parties Covered In The Register Maintained Under Section 301 Of The Companies Act, 1956. As The Company Has Not Taken Any Loans, Secured Or Unsecured, From Parties Listed In The Register Maintained Under Section 301 Of The Companies Act, 1956, The Provisions Of Clause 4(Iii)

(F) And (G) Of The Companies (Auditor''s Report) Order, 2003 Are Not Applicable To The Company.

iv. In Our Opinion And According To The Information And Explanations Given To Us, There Are Adequate Internal Control Procedures Commensurate With The Size Of The Company And The Nature Of Its Business With Regard To Purchases Of Inventory, Fixed Assets And With Regard To The Sale Of Goods And Services. During The Course Of Our Audit, We Have Not Observed Any Continuing Failure To Correct Major Weaknesses In Internal Control System Of The Company.

v. In Respect Of Transactions Entered In The Register Maintained In Pursuance Of Section 301 Of The Companies Act, 1956:

(A) According To The Information And Explanations Given To Us, We Are Of The Opinion That The Particulars Of All Contracts Or Arrangements That Need To Be Entered Into The Register Maintained Under Section 301 Of The Companies Act, 1956 Have Been So Entered.

(B) In Our Opinion And According To The Information And Explanations Given To Us, The Transactions Made In Pursuance Of Contracts Or Arrangements Entered

In The Register Maintained Under Section 301 Of The Companies Act, 1956 And Exceeding The Value Of Rs. Five Lacs In Respect Of Any Party During The Year Have Been Made At Prices Which Are Reasonable Having Regard To Prevailing Market Price At The Relevant Time.

vi. In Our Opinion And According To The Information And Explanations Given To Us, The Company Has Not Accepted Any Deposits Within The Provisions Of Sections 58A And 58AA And Other Relevant Provisions Of The Companies Act, 1956,Therefore, The Provisions Of Clause 4(Vi) Of

The Companies (Auditor''s Report) Order, 2003, Are Not Applicable To The Company.

vii. In Our Opinion, The Company Has An Adequate Internal Audit System Commensurate With The 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 Maintenance Of Cost Records Under Section 209 (1)(D) Of The Companies Act,1956 And We Are Of The Opinion That Prima-Facie The Prescribed Accounts And Records Have Been Maintained.

ix. According To The Information And Explanations Given To Us, In Respect Of Statutory And Other Dues:

(A) The Company Is Generally Regular In Depositing With Appropriate Authorities Undisputed Statutory Dues Including Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess And Any Other Statutory Dues Applicable To It.

(B) According To The Information And Explanations Given To Us, No Undisputed Amounts Payable In Respect Of Income Tax, Sales Tax, Wealth Tax, Services Tax, Customs Excise Duty Were In Arrear As At 31st March, 2013 For A Period More Than Six Months From The Date They Became Payable.

(C) According To The Records Of The Company, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty And Cess Which Have Not Been Deposited On Account Of Any Dispute, Are As Follows:

Name Of The Statute Nature Of The Dues Amount (Rs. In Lacs)

Finance Act 2008 (State) Environment And 1256.78 Health Cess

State Sales Tax Act Sales Tax 2004.90

Central Sales Tax Act Sales Tax 1829.89

Rajasthan Entry Tax Entry Tax 5364.22

Rajasthan Entry Tax Interest On Entry Tax 1296.83

Uttar Pradesh Entry Tax Interest On Entry Tax 147.11

Central Excise Act,1944 Excise Duty Including 419.02 Interest Thereon

Finance Act, 1994 Service Tax 890.17

Central Excise Act,1944 Excise Duty Including 1452.55 Interest

Service Tax Service Tax On GTA 228.89

Name of the Statute Period To Which Forum Where Dispute Is Pending Amount Relates

Finance Act 2008 2008-09 To 2012-13 Jodhpur High Court And Bangalore High Court

State Sales Tax Act 1991-92 Onwards Various Court In Uttar Pradesh And Rajasthan

Central Sales Tax Act 1999 Onwards Appeal With D.C.S.T

Rajasthan Entry Tax July, 2006 Onwards Appeal With Jodhpur High Court

Rajasthan Entry Tax 2002-03 Onwards Appeal With Jodhpur High Court

Uttar Pradesh Entry Tax 2008-09 And Appeal With Supreme Court 2009-10

Central Excise Act,1944 1989 Supreme Court

Finance Act, 1994 June, 2007 to Central Excise Department March, 2008

Central Excise Act,1944 July, 1999 To March, 2008 Central Excise Department

Service Tax - Central Excise Department

X. The Company Does Not Have Accumulated Losses At The End Of The Financial Year And Has Not Incurred Cash Losses During The Financial Year Covered By Our Audit And The Immediately Preceding Financial Year.

Xi. In Our Opinion And According To The Information And Explanations Given To Us, The Company Has Not Defaulted In Repayment Of Dues To Bank.

Xii. As Explained To Us, The Company Has Not Granted Any Loans Or Advances On The Basis Of Security By Way Of Pledge Of Shares, Debentures Or Any 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, 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. Therefore, The Provisions Of Clause 4(Xiv) Of The Companies (Auditor''s Report) Order, 2003, Are Not Applicable To The Company.

Xv. The Company Has Given Guarantees For Loans Taken By Others From Banks And Financial Institution . According To The Information And Explanations Given To Us, We Are Of The Opinion That The Terms And Conditions Thereof Are Not Prima Facie Prejudicial To The Interest Of The Company.

Xvi. In Our Opinion, The Term Loans Have Been Applied For The Purpose For Which They Were Raised.

Xvii. According To The Information And Explanations Given To Us And On An Overall Examination Of The Balance Sheet Of The Company, We Are Of The Opinion That There Are No Funds Raised On Short Term Basis That Have Been Used For Long- Term Investment.

Xviii. According To The Information And Explanations Given To Us, The Company Has Not Made Any Preferential Allotment Of Shares To Parties And Companies Covered In The Register Maintained Under Section 301 Of The Companies Act, 1956 During The Year.

Xix. According To Information And Explanations Given To Us, The Company Had Created The Security In Respect Of Debentures Issued.

Xx. The Company Has Not Raised Any Money By Public Issue During The Year.

Xxi. According To The Information And Explanations Given To Us, No Fraud On Or By The Company Has Been Noticed Or Reported During The Course Of Our Audit.

For P.L. Tandon & Co.

Chartered Accountants

Registration Number: 000186C

Signature

(P.P. SINGH)

Partner

Membership Number: 072754

Place : Kanpur

Date : 11th May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of J.K. Cement Limited, as at 31st March, 2012, the statement of Profit and Loss and also the Cash Flow statement of the company 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 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 also 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 issued by the central Government of india in terms of sub-section (4a) of section 227 of the companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. 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 Balance Sheet, the statement of Profit & Loss and the cash Flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance sheet, the statement of Profit & Loss and the 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;

e) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the companies Act, 1956;

f) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the significant Accounting Polices and notes thereon, give the information required by the companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india:

(a) in the case of the Balance sheet, of the state of affairs of the company as at 31st March, 2012;

(b) In the case of the statement of Profit and Loss of the Profit for the year ended on that date; and

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

(i) In respect of its Fixed Assets :

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets other than furniture and fixtures and office equipments.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) in our opinion and according to the information and explanations given to us, the company has not made any substantial disposal of fixed assets during the year.

(ii) in respect of its inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) in our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and discrepancies noticed on verification between physical stocks and the book records were not material.

(iii) in respect of loans, secured or unsecured, granted or taken by the Company to or from Companies, firms or other parties covered in the register maintained under section 301 of the companies act 1956, according to the information and explanations given to us :

(a) The company has/had granted interest free unsecured loans to Two companies. The maximum amount involved during the year was Rs 6556.13 Lacs and the yearend balance of such loan granted was Rs 6356.13 lacs.

(b) The above loans are interest free and other terms and conditions on which loans have been granted to such parties are not prima facie prejudicial to the interest of the company.

(c) No terms and conditions for repayment of the loan are stipulated.

(d) There is no overdue amount of such loans.

(e) The company has not taken any loan from Companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956. As the company has not taken any loans, secured or Unsecured, from parties listed in the register maintained under section 301 of the companies act, 1956, the provisions of clause 4(iii)(f) and (g) of the companies (auditor's Report) Order, 2003 are not applicable to the company.

(iv) in our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

(v) in respect of transactions entered in the register maintained in pursuance of section 301 of the companies act, 1956 :

(a) according to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

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

(vi) in our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the provisions of sections 58a and 58AA and other relevant provisions of the companies Act, 1956,therefore, the provisions of clause 4(vi) of the companies (Auditor's Report) Order, 2003, are not applicable to the company.

(vii) in our opinion, the company has an adequate internal audit system commensurate with the 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 maintenance of cost records under section 209 (1)(d) of the companies Act,1956 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.

(ix) According to the information and explanations given to us, in respect of statutory and other dues:

(a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax ,wealth tax, services tax, customs excise duty were in arrear as at 31st March, 2012 for a period more than six months from the date they became payable.

(c) According to the records of the company, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute, are as follows :-

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

Finance Act 2008 Environment & Health 935.46 2008-09 High court Jodhpur & (state) cess Bangalore High court.

State Sales Tax Act Sales Tax 1841.44 1991-92 Various court in U.P. onwards Rajasthan

central sales Tax Act sales Tax 1745.65 1999 onwards Appeal with D.c.s.T

Rajasthan Entry Tax Entry Tax 4402.21 July, 2006 Appeal with Jodhpur onwards High court

Rajasthan Entry Tax Interest on Entry Tax 1296.83 2002-03 Appeal with Jodhpur onwards High court

U.P. Entry Tax Interest on Entry Tax 306.43 2004-05 Appeal with supreme onwards court

central Excise Excise duty Including 419.02 1989 Supreme court Act,1944 Interest thereon

Finance Act, 1994 Service Tax 890.17 June, 2007 to central Excise Dept. March, 2008

Central Excise Excise duty 1334.95 July,99 to central Excise Dept. Act,1944 March 08

Services Tax Services Tax on GTA 228.89 Central Excise Dept.

custom Duty custom Duty on petcock 176.28 sept.2009 CEGAT

(x) The company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to bank.

(xii) As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any 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, 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. Therefore, the provisions of clause 4(xiv) of the companies (Auditor's Report) Order, 2003, are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institution. Accordingly, paragraph 4(xv) of the Order is not applicable.

(xvi) In our opinion, the term loan have been applied for the purpose for which they were raised.

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

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, 1956 during the year.

(xix) According to information and explanations given to us, the company has created the security in respect of debentures issued.

(xx) The company has not raised any money by public issue during the year.

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

For P.L. TANDON & CO.

CHARTERED ACCOUNTANTS

Registration No. 000186C

Place : Kanpur.

Date : 26th May, 2012

(P.P.Singh)

PARTNER

Membership No.072754


Mar 31, 2011

1. We have audited the attached Balance Sheet of J.K. Cement Limited, as at 31st March, 2011, the Profit and Loss Account and also the Cash Flow Statement of the Company 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 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 also 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

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

d) In our opinion, the Balance Sheet, the Profit & Loss Account and the 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;

e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(ii) in the case of the Profit & Loss Account of the Profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure to the Auditors1 Report Re: J.K. CEMENT LIMITED (Referred to in Paragraph (3) of our report of even date)

(i) In respect of its Fixed Assets :

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets other than furniture and fixtures and office equipments.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of fixed assets during the year.

(ii) In respect of its Inventories :

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and discrepancies noticed on verification between physical stocks and the book records were not material.

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to or from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to the information and explanations given to us :

(a) The Company has/had granted interest free unsecured loans to four Companies. The maximum amount involved duringtheyear was Rs. 2307.25 Lacs and the year-end balance of such loan granted was Rs. 1885.79 Lacs.

(b) The above loans are interest free and other terms and conditions on which loans have been granted to such parties are not prima facie prejudicial to the interest of the Company.

(c) No terms and conditions for repayment of the loan are stipulated.

(d) There is no overdue amount of such loans.

(e) The Company has not taken any Loan from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. As the Company has not taken any Loans, Secured or Unsecured, from parties listed in the register maintained under section 301 of the Companies Act, 1956, the provisions of clause 4(iii)(f) and (g) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 :

(a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956,therefore, the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003, are not applicable to the Company.

(vii) In our opinion, the Company has an adequate internal audit system commensurate with the 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 maintenance of cost records under section 209 (l)(d) of the Companies Act,1956 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.

(ix) According to the information and explanations given to us, in respect of statutory and other dues:

(a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax .wealth tax, service tax, custom, excise duty were in arrear as at 31st March, 2011 for a period more than six months from the date they became payable.

(c) According to the records of the company, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute, are as follows

Name of the Statute Nature of the dues Amount Period to which Forum where dispute Rs. Lacs amount relates is pending

Income Tax Act Income Tax 1679.70 2008-09 CIT Appeal, Kanpur

Finance Act 2008 (State) Environment & Health Cess 740.25 2008-09 Court of Rajasthan High CourtJodhpur

State Sales Tax Act Sales Tax 2018.71 1991-92 onwards Various Courts in U.P. Rajasthan

Central Sales Tax Act Sales Tax 3892.28 1999 onwards Appeal with D.C.S.T

Rajasthan Entry Tax Entry Tax 3503.63 July, 2006 onwards Appeal with Jodhpur High Court

U.P. Entry Tax Entry Tax 737.35 Nov.2007 onwards Appeal with Allahabad High Court

Central Excise Act,1944 Excise duty Including 419.02 1989 Supreme Court Interest thereon

Custom Duty Custom Duty 176.28 2009-10 Appeal with CEGAT

Finance Act, 1994 Service Tax 1085.42 June, 2007 to Central Excise Dept. March, 2008

Central Excise Act, 1944 Excise duty 1229.67 2007-08 to 2009-10 Central Excise Dept.

Service Tax Service Tax on GTA 228.89 2009-10 Central Excise Dept

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In ouropinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank.

(xii) As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any 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, 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. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003, are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institution. Accordingly, paragraph 4(xv) of the Order is not applicable.

(xvi) In our opinion, the term loan have been applied for the purpose for which they were raised.

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

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(xix) According to information and explanations given to us, during the year covered by our audit, the company had issued 4000 debentures of Z 10 Lac each. The company has created security in respect of 2500 debentures issued till 31-03-2011 and security in respect of 1500 debentures has been created subsequently.

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

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



For P.L. TANDON & CO.,

CHARTERED ACCOUNTANTS

Registration No. 000186C Place ; Kanpur.

Date : 28th May2011

(A.K. AGARWAL)

PARTNER

Membership No.71548



 
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