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Auditor Report of JK Cement Ltd.

Mar 31, 2017

INDEPENDENT AUDITOR’S REPORT

To The Members of J.K.CEMENT LIMITED

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of J.K. Cement Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 standalone Ind AS financial statements based on our audit.

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

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

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

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to Note No 36 (A)(6)of the statement which describes the following matters:

(a) In terms of order dated 31st August 2016, the Competition Commission of India (‘CCI’ ) has imposed penalty of Rs, 128.54 crore for alleged contravention of the provisions of the Competition Act, 2002 by the Company. The Company had filed an appeal against CCI Order before the Competition Appellate Tribunal (‘COMPAT’). COMPAT has granted stay on the CCI Order on the condition that the Company deposits penalty amounting to Rs, 6.56 crore which has since been deposited. Based on a legal opinion and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.

(b) In terms of order dated 19th January 2017, the CCI has

imposed penalty of Rs, 9.28 crore pursuant to a reference filed by the Government of Haryana for alleged contravention of the provisions of the Competition Act, 2002 in August 2012 by the Company. The Company has filed an appeal before COMPAT. The Company believes it has a good case and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

1- As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms

of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our Audit.

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

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

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being

appointed as a director in terms of Section 164(2) of the Act.

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

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; (Refer Note No.36)

II. The company does not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.

III. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund.

IV. The company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016.Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the company and as produced to us by the management (Refer Note No10 (iv)).

The Annexure referred to in our Independent Auditor’s Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2017, We report that:

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

Gross Block

Net Block

Particular of land

as at

31-03-2017 ('' In lacs)

as at

31-03-2017 ('' In lacs)

Remarks

i. Leasehold

1353.07

306.36

The title deeds

land (one

are in the name

case)

of erstwhile

ii. Freehold

225.64

225.64

company that

land (Four

merged with

cases )

the company pursuant to a scheme of amalgamation and arrangement as approved by the honorable High Court.

ii. In respect of its Inventories:

As explained to us, inventories have been physically verified during the year by the management at reasonable intervals and discrepancies noticed on verification between physical stocks and the book records were not material.

iii. In respect of loans, secured or unsecured, granted by the Company to Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013, according to the information and explanations given to us :

(a) The Company had granted Unsecured Loans to one company the terms and conditions of loans are not prima-facie prejudicial to the interest of the company. The company had repaid the loan during the year therefore other clauses are not applicable.

iv. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made.

v. In our opinion and according to information and explanations given to us, the company has not accepted any deposits within the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, therefore, the provisions of paragraph 3(v) of the Companies (Auditor’s Report ) order, 2016, are not applicable to the company.

vi. 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 sub section (1) of section 148 of the Companies Act,2013 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.

vii. 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, employees’ state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other material Statutory dues were in arrear as at 31st March, 2017 for a period more than six months from the date they became payable.

viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to banks, government or dues to debenture holder.

(b) According to the records of the company, income tax, sales tax, service tax, duty of custom, duty of excise or value added tax 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)

Period to which Amount Relates

Forum where Dispute is Pending

Finance Act 2008 (State)

Environment and Health Cess

3239.34

2008-09 to 2015-16

Jodhpur High Court and Bangalore High Court

State Sales Tax Act

Sales Tax

887.72

1991-92 onwards

Various Court in Uttar Pradesh and Rajasthan

Rajasthan Entry Tax

Entry Tax

2392.49

July, 2006 Onwards

Appeal with Jodhpur High Court

Rajasthan Entry Tax

Interest on Entry Tax

2737.76

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 Interest thereon

419.02

1989

Supreme Court

Finance Act, 1994

Service Tax

1085.42

June, 2007 to March, 2008

Central Excise Department

Central Excise Act,1944

Excise Duty including Interest

1662.53

July, 1999 to March, 2008

Central Excise Department

Service Tax

Service Tax on GTA

228.89

-

Central Excise Department

ix. In our opinion and according to the information and explanations given to us, the debentures and term loans have been applied for the purposes for which they were obtained.

x. According to the information and explanations give to us, no material fraud by the company or on the company by its officer or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the Companies (Auditor’s Report ) order, 2016,are not applicable to the company.

xiii. According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non- cash transactions with directors or persons connected with him, Therefore the provisions of paragraph 3 (xv) of the Companies (Auditor’s Report ) order, 2016, are not applicable to the company.

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (“the Company”) as of 31st March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For P.L. TANDON & Co.

Chartered Accountants

Registration Number: 000186C

P.P.SINGH

Place; KANPUR (PARTNER)

Date : 13th May, 2017 Membership Number: 072754


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


Mar 31, 2010

1. We have audited the attached Balance Sheet of J.K. Cement Limited, as at 31st March, 2010, 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 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 ncludes 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 (4-A) 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, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section [1] of Section 274 of the Companies Act, 1956;

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 :

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) in the case of the Profit & Loss Account 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.

ANNEXURE TO THE AUDITORS 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 Companies. The maximum amount involved during the year was Rs. 3951.57 Lacs and the year end balance of such loan granted was Rs. 2151.57 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 (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, 2010 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 Amount Period to which Forum where Dues Rs./Lacs amount relates dispute is pending Finance Act 2008 (State) Environment & 570.74 2008-09 Jodhpur High Court Health Cess 2009-10 State Sales Tax Act Sales Tax 924.40 1991-92 onwards Various Courts In U.P. Rajasthan Central SalesTaxAct Sales Tax 2347.22 1999 onwards Appellate Authority Rajasthan Entry Tax Entry Tax 2670.00 July, 2006 Jodhpur High onwards Court J.P. Entry Tax Entry Tax 737.35 Nov.2007 Allahabad High onwards Court Central Excise Act, Excise duty 419.02 1989 Supeme Court 1944 Including Interest thereon Finance Act, 1994 Service Tax 1085.42 June, 2007 to Central Excise Dept. March,2008 Central Excise Act, Excise duty 28.22 April, 2007- Central Excise 1994 Dept. on non MRP March,2008 Sale Central Excise Act, Excise duty 153.70 2009-10 Appellate 1994 Tribunal Services Tax Service Tax on229.88 2009-10 Central Excise Dept. GTA

(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 (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 nvestments. 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) As the Company has no debenture outstanding at any time during the year, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003, are not applicable to the Company.

(xx) The Company has not raised any money by public ssue 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 : 29th May, 2010 (A.K. AGARWAL) PARTNER Membership No.71548

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