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Auditor Report of Sagar Cements Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s. Sagar Cements Limited, Hyderabad the ("Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015;

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

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

Report on other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) order, 2015, issued by the Central Government of India in terms of subsection (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

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

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

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

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

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

(e) Based on the Written Representation received from the directors as on 31st March 2015, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2015 from being appointed as a director in terms of Sub-section 2 of Section 164 of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer clause No.vii(b) of CARO,2015 and note no.2.30 to the financial statements;

Annexure referred to in paragraph 1 of Section Report on Other Legal and Regulatory Requirements of the Independent Auditor's Report of even date of Sagar Cements Limited, Hyderabad on the financial statements for the year ended March 31, 2015

i. In respect of fixed assets

(a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) As explained to us, all the fixed assets have been physically verified by the Management during the year. No material discrepancies were noticed on such verification.

ii. In respect of its inventories:

(a) As explained to us, the inventories excepting in case of goods in transit, were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion, procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of the inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancies were noted on such verification.

iii. In respect of loans:

As informed to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods & services.

v. The company has not accepted any deposits, and hence clause (v) of Companies (Auditor's Report) Order, 2015 is not applicable.

vi. We have broadly reviewed the books of account maintained by company pursuant to rules prescribed by the Central Government of India for maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of products of the company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

vii. a) According to the information and explanations given to us and the records as produced and examined by us, in our opinion, the company is regular in depositing undisputed statutory dues including Income tax, Service tax, Customs Duty and other material statutory dues during the year by the company with the appropriate authorities. As explained to us, the company did not have any dues on account of Employee's State Insurance, Sales tax, Excise duty, Wealth tax and Investor Education and Protection Fund.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Service tax, Customs duty and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the period they became payable.

b) According to the information and explanations given to us, there are no dues of Income-tax, Service tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. As informed to us, the company did not have any dues on account of Wealth tax and Excise duty. However, the company has contingent liabilities pending before various appellate authorities. Please refer to note no. 2.30 to the financial statement.

viii. The Company does not have any accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to its bankers and financial institutions.

x. According to the information and explanations given to us the company has not given any guarantee for loans taken by others or banks or financial institutions. Thus paragraph 3 (x) of the order does not apply to the company for the year.

xi. In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which they were raised.

xii. 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 audit.

For P.SRINIVASAN & Co., Chartered Accountants Firm's Registration No.004055S



K.RANGANATHAN Place: Hyderabad Partner Date: 21st May, 2015 Membership No. 010842


Mar 31, 2014

We have audited the accompanying financial statements of Sagar Cements Limited (‘the company’), which comprise the Balance Sheet as at March 31, 2014, the statement of Profit and loss of the Company and the Cash Flow Statement of the Company for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s 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 flow 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 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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 March 31, 2014;

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

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

1. As required by the Companies (Auditor’s Report) Order, 2003, as amended (‘the Order’) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act,1956(‘the Act), we give in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

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

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the Directors, as on 31st March, 2014 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act,1956;

Referred to in Paragraph under the heading of “Report” on other Legal and Regulatory Requirements” of our report of even date.

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

2. Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

3. As per information and explanation given by the management during the year, the company has not disposed off a substantial part of its fixed assets and going concern assumption of the company is not affected.

4. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

6. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

7. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

8. As the company has not granted or taken loans to / from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, which are prima facie prejudicial to the interest of the company is not applicable to the company.

9. As the company has not taken loans from / granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to the regular payment of principal amount and interest is not applicable to the company.

10. As the company has not taken loans from or granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to steps taken for recovery / payment of the principal and interest on overdue amount of more than one lakh, is not applicable to the company.

11. 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. During the course of our audit, no major weakness has been noticed in the internal control.

12.a) Based on the audit procedure applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions 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 such contracts or arrangements and exceeding Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

13. The company has not accepted deposits from the public during the year.

14. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

15. In our opinion and according to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. However, we have not carried out any detailed examination of such records.

16. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it.

17. According to the information and explanations given to us, the details of dues on sales tax, excise duty and others which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Amount Period to Sl.Name of the Amount Deposited which the Nature of Dues No. statute Rs. under protest amount Rs. relates

1 A.P. TRANSCO 1,73,50,747 1,08,02,441 1999-2000 Voltage Surcharge & grid supporting charges

2 Sales Tax 1,09,40,297 27,35,074 2009-2010 Tax on sale of Authorities Fixed Assets

19,60,832 4,90,208 1999-2000 Interest on delayed payment

1,44,25,000 18,03,000 2007-08 Disallowance of input tax credit on steel purchased

75,68,000 9,46,000 2008-09 Disallowance of input tax credit on steel purchased

3 Income Tax 74,98,000 - 2006-2007 Disallowances of certain Authorities expenditure

75,29,000 - 2008-09 Disallowance of certain 2009-10 and expenditure U/s.14A 2010-11

4 Central Excise 2,24,95,200 1,95,00,000 2008-2009 Denying the benefit of Authorities Cenvat credit on capital goods

6,50,80,000 - - Denying the benefit of Cenvat credit on capital goods

59,41,000 Cement has been cleared to the contractors at a rate lesser than the market rate

1,46,30,000 July 2008 to Denying Cenvat credit against February Service Tax paid on freight 2011 charged incurred for transportation of cement

7,67,000 3,84,000 December Denying Cenvat credit on 2006 to Input services such as March 2010 Advertisement, audit and Telephone, Telex services used in relation to trading activity

5 Road Transport 28,50,000 3,20,000 2006-2007 Life Tax on dumpers used in Authority captive mines

6 Customs 67,92,000 - - Imported Coal was wrongly Authorities classified under steam coal instead of bituminous coal

Name of the Statute Forum where the dispute is pending A.P. TRANSCO Filed an appeal with Division Bench, High Court of A.P

Sales Tax Authorities Contested before the State Appellate Tribunal

Filed an Appeal before the Appellate Tribunal

Filed an Appeal before Appellate Deputy Commissioner

Filed an appeal before Appellate Deputy Commissioner

Income Tax Authorities Contested before the Commissioner

Contested before the Commissioner

Central Excise Authorities Filed an Appeal with CESTAT, Bangalore

Filed an Appeal with CESTAT, Bangalore

Filed before Commissioner of Central Excise, Hyderabad III Commissionerate

Filed an appeal with CESTAT, Bangalore

Filed an Appeal with CESTAT, Bangalore

Road Transport Authority Filed an Appeal in High Court of A.P.

Customs Authorities Filed an Appeal before CESTAT,Bangalore

18. The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

19. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

20. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

21. The company is not a chit fund or nidhi or mutual fund / society and hence the provisions of Clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

22. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of Clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

23. As the company has not given any guarantee for loans taken by others from banks or financial insitutions, hence the provisions of Clause 4 (xv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

24. In our opinion, the term loans taken by the company have been applied for the purpose for which they were raised.

25. According to the information and explanations given to us and on an over all examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used for short term assets.

26. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

27. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

28. During the year, the company has not raised monies by public issue.

29. According to the information and explanations given to us and the books and records examined by us, no fraud on or by the company has been noticed or reported during the year.

For P. SRINIVASAN & Co., Chartered Accountants Firm’s Registration No.004055S

K. RANGANATHAN Hyderabad Partner May 13, 2014 Membership No. 010842


Mar 31, 2013

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

Management''s Responsibility for the Financial Statements

The 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 flow 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 judgement, 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 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 case of the Balance Sheet, of the state of affairs of the Company as at 31 st 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. ,,

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended ("the Order'') issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 (''the Act''), we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

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, we report that 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;

Annexure to the Independent Auditors'' Report

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

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

2. Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

3. As per information and explanation given by the management during the year, the company has not disposed off a substantial part of its fixed assets and going concern assumption of the company is not affected.

4. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

6. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

7. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Hence, the provisions of Clause (b), (c)and (d) of paragraph 4 (iii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

8. According to the information and explanations given to us, the company has taken loan from a company covered in the register maintained under Section 301 of the Companies Act, 1956. In our opinion and to the best of our examination, the terms are not prejudicial to the interests of the company. The amount outstanding as on 31st March, 2013 is Rs.557.90 lakhs.

9. As the company has not taken loans from / granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to the regular payment of principal amount and interest is not appl icable to the company.

10. As the company has not taken loans from or granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to steps taken for recovery / payment of the principal and interest on overdue amount of more than one lakh, is not applicable to the company.

11. 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. Duri ng the course of our audit, no major weakness has been noticed in the internal control.

12. a) Based on the audit procedure applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions 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 such contracts or arrangements and exceeding Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

13. The company has not accepted deposits from the public during the year.

14. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

15. In our opinion and according to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. However, we have not carried out any detailed examination of such records.

16. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income- Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. sale of Contested before the Fixed Assets State Appellate Tribunal Interest on delayed Filed an Appeal payment before the Appellate Tribunal Disallowances of certain Contested before the expenditure Commissioner Disallowance of expenditure U/S.14A Contested before the Commissioner Denying the benefit of Cenvat Filed an Appeal with credit on capital Goods CESTAT, Bangalore Denying the benefit of Cenvat Filed an Appeal with credit on capital oods CESTAT, Bangalore Cement has been cleared to the Filed before Commi- contractors at a rate lesserthan ssionerofCentral the market rate Excise, Hyderabad III Commissionerate Denying Cenvat credit against Filed an appeal with Service Tax paid on freight CESTAT, Bangalore charged incurred for transportation of cement Denying Cenvat credit on Filed an Appeal with Input services such as CESTAT, Bangalore Advertisement, audit and Telephone, Telex services used in relation to trading activity Life Tax ondumpers used in Filed anAppeal in captivemines HighCourtofA.P.

18. The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

19. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

20. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

21. The company is not a chit fund or nidhi or mutual fund / society and hence the provisions of Clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

22. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of Clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

23. As the company has not given any guarantee for loans taken by others from banks or financial institutions, hence the provisions of Clause 4 (xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

24. In our opinion, the term loans taken by the company have been applied forthe purpose for which they were raised.

25. According to the information and explanations given to us and on an over all examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used for short term assets.

26. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

27. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

28. During the year, the company has not raised monies by public issue.

29. Accordingto the information and explanations given to us and the books and records examined by us, no fraud on or by the company has been noticed or reported during the year.

For P.Srinivasan & Co.,

Chartered Accountants

Hyderabad K.Ranganathan

22nd May 2013 Partner

Membership No. 10842


Mar 31, 2012

We have audited the accompanying financial statements of Sagar Cements Limited ('the company'), which comprise the Balance Sheet as at 31st March, 2012, the Statement of Profit and Loss of the company and the Cash Flow Statement of the company for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The 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 flow 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.

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

a. in 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.

Report on other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2003, as amended ('the Order') issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 ('the Act'), we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

As required by Section227 (3) of the Act, we report that:

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

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;

The Annexure referred to in the Independent Auditors' Report to the members of Sagar Cements Limited ('the Company') on

the financial statements for the year ended March 31, 2012, we report that:

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

2. Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

3. As per information and explanation given by the management during the year, the company has not disposed off a substantial part of its fixed assets and going concern assumption of the company is not affected.

4. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

6. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

7. According to the information and explanations given to us, the company has not granted or taken any loans, secured or unsecured to / from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

8. As the company has not granted or taken loans to / from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, which are prima facie prejudicial to the interest of the company is not applicable to the company.

9. As the company has not taken loans from / granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to the regular payment of principal amount and interest is not applicable to the company.

10. As the company has not taken loans from or granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to steps taken for recovery / payment of the principal and interest on overdue amount of more than one lakh, is not applicable to the company.

11. 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. During the course of our audit, no major weakness has been noticed in the internal control.

12. a) Based on the audit procedure applied by us and according to the information and explanations provided by the

management, we are of the opinion that the transactions 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 such contracts or arrangements and exceeding Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

13. The company has not accepted deposits from the public during the year.

14. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

15. In our opinion and according to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. However, we have not carried out any detailed examination of such records.

16. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income- Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it.

17. According to the information and explanations given to us, the details of dues on sales tax, excise duty and others which have not been deposited as on 31st March, 2012 on account of disputes are given below:

Sl. Name of the statute Amount Amount Deposited Period to No. Rs. under protest which the amount Rs. relates

1 A.P. TRANSCO 1,73,50,747 1,08,02,441 1999-2000

2 Sales Tax 1,09,40,297 27,35,074 2009-2010 Authorities

19,60,832 4,90,208 1999-2000

3 Income Tax 74,98,000 - 2006-2007 Authorities

4 Central Excise 2,24,95,200 1,95,00,000 2008-2009 Authorities

6,50,80,000 - -

5 Road Transport 28,50,000 3,20,000 2006-2007 Authority



Name of the statute Nature of Dues Forum where the dispute is pending

A.P. TRANSCO Voltage Surcharge & grid Filed an appeal with supporting charges Division Bench, High Court of A.P

Sales Tax Tax on sale of Fixed Assets Contested before the Authorities State Appellate Tribunal

Interest on delayed Filed an Appeal before payment the Appellate Tribunal

Income Tax Disallowances of Contested before the Authorities certain expenditure Commissioner

Central Excise Denying the benefit of Filed an Appeal with Authorities Cenvat credit on capital goods CESTAT, Bangalore

Denying the benefit of Filed an Appeal with Cenvat credit on capital CESTAT, Bangalore goods

Road Transport Life Tax on dumpers used Filed an Appeal in Authority in captive mines High Court of A.P.

18. The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

19. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

20. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

21. The company is not a chit fund or nidhi or mutual fund / society and hence the provisions of Clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

22. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

23. As the company has not given any guarantee for loans taken by others from banks or financial institutions, hence the provisions of Clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

24. In our opinion, the term loans taken by the company have been applied for the purpose for which they were raised.

25. According to the information and explanations given to us and on an over all examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used for short term assets.

26. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

27. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

28. During the year, the company has not raised monies by public issue.

29. According to the information and explanations given to us and the books and records examined by us, no fraud on or by the company has been noticed or reported during the year.

For P.Srinivasan & Co.,

Chartered Accountants

Hyderabad K.Ranganathan

15th May 2012 Partner

Membership No.10842


Mar 31, 2011

We have audited the attached Balance Sheet of Sagar Cements Limited as at 31st March, 2011 and the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

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

1. 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 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 purpose of our audit;

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the Directors as on 31' March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31' 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 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 case of the Balance Sheet, of the state of affairs of the Company as at 31* March, 2011;

ii. in the case of the Profit and 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 AUDITORS' REPORT Annexure referred to in paragraph 1 of our Report

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

2. Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

3. As per information and explanation given by the management during the year, the company has not disposed off a substantial part of its fixed assets and going concern assumption of the company is not affected.

4. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

6. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

7. According to the information and explanations given to us, the company has not granted or taken any loans, secured or unsecured to / from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

8. As the company has not granted or taken loans to / from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, which are prima facie prejudicial to the interest of the company is not applicable to the company.

9. As the company has not taken loans from / granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to the regular payment of principal amount and interest is not applicable to the company.

10. As the company has not taken loans from or granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to steps taken for recovery / payment of the principal and interest on overdue amount of more than one lakh, is not applicable to the company.

11. 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. During the course of our audit, no major weakness has been noticed in the internal control.

12. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions 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 such contracts or arrangements and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

13. The company has not accepted deposits from the public during the year.

14. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

1 5. In our opinion and according to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. However, we have not carried out any detailed examination of such records.

16. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it.

17. According to the information and explanations given to us, the details of dues on sales tax, excise duty and others which have not been deposited as on 31 * March, 2011 on account of disputes are given below:

Sl. Name of the Statute Amount Amount Period to Forum where No. (Nature of dues) Rs. Deposited which the the dispute under protest amount is pending Rs. Relates

1 A.P. TRANSCO 1,73,50,747 1,08,02,441 1999.00 Voltage Surcharge & grid supporting charges. Filed an appeal with Division Bench, High Court of A.P.

2 Sale Tax Authorities 1,09,40,297 27,35,074 2009-10 Tax on sale of Fixed Assets, Contested before the State Appellate Tribunal.

19,60,832 4,90,208 1999-00 Interest on delayed payment. Filed an Appeal before the Appellate Tribunal

3 Income Tax Authorities 74,98,000 2006-07 Disallowances of certain expenditure, contested before the Commissioner

11,42,000 - 2008-09 (Appeals)

4 Central Excise 2,24,95,200 1,95,00,000 2008-09 Denying the benefit of Cenvat Authorities credit on capital good, Filed an Appeal with CESTAT, Bangalore

18. The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

19. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

20. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

21. The company is not a chit fund or nidhi or mutual fund / society and hence the provisions of Clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

22. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

23. As the company has not given any guarantee for loans taken by others from banks or financial institutions, the provisions of Clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

24. In our opinion, the term loans taken by the company have been applied for the purpose for which they were raised.

25. According to the information and explanations given to us and on an over all examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used for short term assets.

26. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

27. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

28. During the year, the company has not raised monies by public issue.

29. According to the information and explanations given to us and the books and records examined by us, no fraud on or by the company has been noticed or reported during the year.

For P.Srinivasan & Co.,

Chartered Accountants

Hyderabad K.Ranganathan

12th July, 2011 Partner

M.No.10842












Mar 31, 2010

We have audited the attached Balance Sheet of Sagar Cements Limited as at 31st March, 2010 and the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph I 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 purpose of our audit;

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the Directors as on 31" 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 (I) 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 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 case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii. in the case of the Profit and 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 AUDITORS REPORT Annexure referred to in paragraph I of our Report

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

2. Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

3. As per information and explanation given by the management during the year, the company has not disposed off a substantial part of its fixed assets and going concern assumption of the company is not affected.

4. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

6. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

7. According to the information and explanations given to us, the company has not granted or taken any loans, secured or unsecured to / from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

8. As the company has not granted or taken loans to / from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, which are prima facie prejudicial to the interest of the company is not applicable to the company.

9. As the company has not taken loans from / granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to the regular payment of principal amount and interest is not applicable to the company.

10. As the company has not taken loans from or granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the clause relating to steps taken for recovery / payment of the principal and interest on overdue amount of more than one lakh, is not applicable to the company.

11. 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. During the course of our audit, no major weakness has been noticed in the internal control.

12. a) Based on the audit procedures applied by us and according to the information and explanations provided by the

management, we are of the opinion that the transactions 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 such contracts or arrangements and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

I 3. The company has not accepted deposits from the public during the year.

14. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

15. In our opinion and according to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209 (I) (d) of the Companies Act, 1956. However, we have not carried out any detailed examination of such records.

16. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income- Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it.

1 7. The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

18. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

19. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

20. The company is not a chit fund or nidhi or mutual fund / society and hence the provisions of Clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

21. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of Clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

22. As the company has not given any guarantee for loans taken by others from banks or financial institutions, hence the provisions of Clause 4 (xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

23. In our opinion, the term loans taken by the company have been applied for the purpose for which they were raised.

24. According to the information and explanations given to us and on an over all examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used for short term assets.

25. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

26. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

27. During the year, the company has not raised monies by public issue.

28. According to the information and explanations given to us and the books and records examined by us, no fraud on or by the company has been noticed or reported during the year.

For P.Srinivasan & Co.,

Chartered Accountants



K.Ranganathan

Partner

M.No.10842

Hyderabad

18th May, 2010



 
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