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Auditor Report of Saurashtra Cements Ltd.

Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Saurashtra Cement Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2018, 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 significant accounting policies and other explanatory information (herein after referred to as ''standalone Ind AS financial statements'').

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 Actâ) with respect to the preparation and presentation 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.

In conducting 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 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 Ind AS, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31^st March 2017 and the transition date opening balance sheet as at 1^st April 2016 included in these standalone Ind AS financial statement, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose reports for the year ended 31^st March 2017 and 31^st March 2016 dated 23^rd May 2017 and 23^rd May 2016 respectively expressed an unmodified opinion on those standalone financial statements, which have been adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. 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 Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the Annexure A, a statement on the matters specified in the 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 the 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 March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

(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, as amended 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 32 to the standalone Ind AS financial statements.

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

(iii) There were no amount which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirementsâ section of our report to the members of Saurashtra Cement Limited of even date)

Report on the Companies (Auditor'' Report) Order, 2016, issued in terms of section 143 (11) of the Companies Act, 2013(''the Act'') of Saurashtra Cement Limited (''the Company'')

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

(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, portion of the fixed assets were physically verified by the Management during the year. According to information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties other than self-constructed immovable properties (buildings) are held in the name of Company. The self-constructed Building having Gross book value of '' 2411.45 Lakhs (Net Block '' 120.57 Lakhs) is on the land of Gujarat Maritime Board which has given license vide agreement dated January 17, 1997 to use the land for a period of 15 years from the date of completion of construction being October 8, 2000. This agreement is now pending for renewal.

(ii) Physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed.

(iii) (a) According to information and explanations given to us, the Company had granted interest-free unsecured deposit to one of its subsidiary in earlier years, which is a company covered in the register maintained under Section 189 of the Act. The Company has not granted any other loans, secured or unsecured, to firms, Limited Liabilities Partnerships or other parties covered under Section 189 of the Act.

(b) As regards the said interest-free deposit to the subsidiary, no other terms and conditions, including repayment thereof have been stipulated and accordingly, the question of making any comment further regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and the fact that is given to a subsidiary and for the purpose of which it is given, in our opinion, the same is not, prima facie, prejudicial to the interest of the Company.

(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 investments made. The Company has not given any guarantee or provided any security in connection with the loan to any person or other body corporate and accordingly, the question of commenting on compliance with the provisions in respect thereof does not arise.

(v) The Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of cement produced by the Company where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section

(1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and based on records of the Company examined by us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess, Goods and Services Tax, and other material statutory dues, as applicable, with appropriate authorities, except Sales Tax, Excise duty, Service Tax, Custom duty where there was some delay on few occasions.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable. As informed to us, the provisions of the Employees'' State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the Company examined by us, the details of disputed statutory dues of Income Tax, Service Tax, Sales Tax, Value Added Tax, Excise Duty and other material statutory dues which have not been deposited as at March 31, 2018 on account of dispute are as under:

Name of the Statute	Nature of the Dues	Amount (Rs. In Lacs)*	Year to which amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty	174.05	2006-07 & 2007-08	High Court of Gujarat
		636.31	2007-08 to 2013-14	CESTAT
		16.58	2013-14	CESTAT
		1.41	2013-14 & 2014-15	Assistant Commissioner Junagadh
		9.24	2014-15 to 2016-17	Commissioner of Excise Appeals
		405.57	2009-10 to 2013-14	CESTAT
The Finance Act, 1994	Service Tax	2.10	2006-07	CESTAT
The Finance Act, 1994	Service Tax	3.49	2006-07 to 2011-12	CESTAT
Customs Act 1962	Custom Duty	1,022.95	2011-12 & 2012-13	CESTAT

*Amount Includes the amount of Interest to the extent provided by the Company in the books of account.

(viii) To the best of our knowledge and according to information and explanations given to us, the Company has not defaulted in the repayment of loans to banks. The Company has not issued debentures. The Company has not taken any loans either from financial institution or Government or has not issued any debentures.

(ix) The Company has raised money by way of Term Loan from Bank and the proceeds were applied for the purposes for which those are raised. The Company has not raised moneys by way of initial public offer or further public offer (Including debt instruments).

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

(xi) In our opinion and according to information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provision of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting requirement under paragraph 3 (xiv) of the order is not applicable to the Company.

(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 any non-cash transactions with Directors or persons connected to directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45IA of Reserve bank of India Act, 1934.

(Referred to in paragraph 2(f) under "Report on Other Legal and Regulatory Requirementsâ section of our report to the members of Saurashtra Cement Limited of even date)

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

In conjunction with our audit of the standalone Ind AS financial statements of Saurashtra Cement Limited (The Company) as of and for the year ended March 31, 2018, we have also audited the internal financial controls over financial reporting of the Company.

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.

Auditor''s 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 Noteâ) 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 ICAI. 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 control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 Manubhai & Shah LLP

Chartered Accountants

ICAI Firm Registration No. 106041W /W100136

K. C. Patel

Place: Mumbai Partner

Date: May 24, 2018 Membership No. 30083

Mar 31, 2017

TO THE MEMBERS OF SAURASHTRA CEMENT LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SAURASHTRA CEMENT LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managementâs 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 (âthe Actâ) with respect to the preparation of these standalone 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 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.

Auditorsâ Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 that we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. 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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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, if any, of pending litigations as at March, 31, 2017 on its financial position in its standalone financial statements - Refer Note 30 of the standalone financial statements;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as required under the applicable law or accounting standards;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.

iv. The Company has provided requisite disclosure in the financial statements as to holding as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedure 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 18.1 of the standalone financial statements.

2. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in Annexure B, a statement on the matters specified in the paragraphs 3 and 4 of the Order.

Referred to in paragraph 1.f under the heading of âReport on Other Legal and Regulatory Requirementsâ of our Independent Auditorsâ Report of even date on the standalone financial statements for the year ended March 31, 2017

Report on the Internal Financial Controls under Section 143(3)(i) of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of SAURASHTRA CEMENT LIMITED (âthe Companyâ), as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs 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 (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (âICAIâ). 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 companyâs 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.

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 ICAI. 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 auditorâs 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 Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companyâs 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 companyâs 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 expenditure 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

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 March 31, 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.

Referred to in paragraph 2 under the heading of âReport on Other Legal and Regulatory Requirementsâ of our Independent Auditors''

Report of even date on the standalone financial statements for the year ended March 31, 2017

Report on the Companies (Auditorsâ Report) Order, 2016, issued in terms of Section 143(11) of the Companies Act, 2013 (âthe Actâ) of Saurashtra Cement Limited (âthe Companyâ)

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, plant and equipment (PPE) (earlier referred to as fixed assets).

b. The PPE have been physically verified by the management according to a phased programme designed to cover all the PPE over a period of three years, which, in our opinion, provides for physical verification of all the items of PPE at reasonable intervals. Pursuant to the programme, a material portion of the items of PPE have been verified by the management during the year, and no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties other than self-constructed immovable properties (Buildings) as included in PPE, Note 11 to the financial statements, are held in the name of the Company. The license to use agreement with Gujarat Maritime Board dated January 17, 1997, for the use of self constructed Jetty Gross BlockRs.2411.45 lacs (Net BlockRs.120.57 lacs), constructed on the land provided by Gujarat Maritime Board for a period of 15 years from the date of completion of construction being October 8, 2000 is pending for renewal.

ii. Inventories other than stocks-in-transit have been physically verified by the management during the year. For stocks-in-transit at the year-end, the necessary documentary evidences for physical verification have been obtained. In our opinion, the frequency of such verification is reasonable and no material discrepancies were noticed on such physical verification.

iii. a. The Company had granted interest-free unsecured deposit to one of its subsidiary in earlier years, which is a company covered in the Register maintained under Section 189 of the Act. The Company has not granted any other loans, secured or unsecured, to firms, limited liability partnerships or other parties covered under section 189 of the Act.

b. As regards the said interest-free deposit to the subsidiary, no other terms and conditions, including repayment thereof have been stipulated and accordingly, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and the fact that it is given to a subsidiary and for the purpose for which it is given, in our opinion, the same is not, prima facie, prejudicial to the interest of the Company.

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 investments made. The Company has not given any guarantee or provided any security in connection with a loan to any person or other body corporate and accordingly, the question of commenting on compliance with the provisions in respect thereof does not arise.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public. Accordingly, paragraph 3 (v) of the Order to comment on whether the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and rules framed there under, is not applicable.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as specified by the Central Government under Section 148(1) of the Act in respect of its products 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 said accounts and records with a view to determine whether they are accurate or complete.

vii. a. According to the information and explanations given to us and on the basis of the books and records examined by us, the

Company has been regular in depositing undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues as applicable to it with the appropriate authorities and there are no arrears of outstanding statutory dues on the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees'' State Insurance Act are not applicable to the Company.

b. According to the information and explanations given to us and on the basis of the books and records examined by us, as may be applicable, given herein below are the details of dues of Income-tax, Sales-tax, Service-tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess which have not been deposited on account of disputes and the forum where the dispute is pending:

Nature of Dues - Name of the Statute	Amount (Rs, lacs)	Period to which amount relates	Forum where dispute is pending
Service Tax - The Finance Act, 1994
Tax and penalty	2.39 (*0.35)	2006-2007	CESTAT
Tax and penalty	5.58	2010-2011	CESTAT
Duty of Customs- Customs Act, 1962
Duty and interest	3.25 (*3.25)	2009-2011	CESTAT
Duty, interest and penalty	741.28(*76.86)	2011-2013	CESTAT (Large Bench)
Duty of Excise - Central Excise Act, 1944
Tax, interest and penalty	710.45(*20.62)	2005-2016	CESTAT
Duty, interest and penalty	174.05	2007-2008	Honourable High Court of Gujarat
Penalty	0.69 (*0.07)	2012-2013	Commissioner of Excise (Appeals)
Duty and penalty	421.37(*15.80)	2008-2014	CESTAT
Value Added Tax - Gujarat Value Added Tax Act, 2003
Value Added Tax (VAT)	159.02	2008-2010	Joint Commissioner of Sales Tax
Interest on VAT	294.68
Penalty on VAT	101.42
* Indicates amounts deposited against the dispute

viii. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in the repayment of dues to financial institutions, banks, Government or debenture holders.

ix. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, paragraph 3 (ix) of the Order in respect thereof is not applicable. Moneys raised by way of term loans were applied for the purposes for which those are raised.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year in the course of our audit.

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

xii. The Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is 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 Sections 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv. In terms of the Order of March 14, 2013 from the Board for Industrial and Financial Reconstruction a Rehabilitation Scheme, for the contribution from the promoters and associates, the Company had made allotment of equity shares during the previous financial year for which the balance call money is received during the year. These call money have been used for the purposes specified in the Scheme for which the funds were raised. Other than the allotment as aforesaid, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures under Section 42 of the Act during the year under review. Accordingly, the requirement to comment upon the utilisation of funds for the purpose for which they were raised does not arise.

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. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H. CLERK

Place: MUMBAI Partner

Date: May 23, 2017 Membership No. 36148

Mar 31, 2015

We have audited the accompanying standalone financial statements of SAURASHTRA CEMENT LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the 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 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 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 standalone financial statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 that we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its profit and its 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, 2015 ("the Order"), issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

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

e. On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) 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 standalone financial statements Â Refer Note 30 to the standalone financial statements;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as required under the applicable law or accounting standards;

iii. there were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Independent Auditors' Report of even date on the standalone financial statements for the year ended March 31, 2015.

We report that:

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

b. As explained to us, the fixed assets have been physically verified by the management according to a phased programme designed to cover all the fixed assets over a period of three years, which in our opinion, is at reasonable intervals having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a material portion of the fixed assets have been verified by the management during the year, and no material discrepancies have been noticed on such verification.

ii. a. Inventories other than stocks-in-transit have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks-in-transit at the year-end, the necessary documentary evidences have been obtained.

b. In our opinion, 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, the Company has maintained proper records of its inventories and no material discrepancies have been noticed on physical verification between the physical stocks and book records.

iii. a. As per the information furnished, in earlier years, the Company had granted interest-free unsecured deposit to one of its subsidiary, which is a company covered in the Register maintained under Section 189 of the Act.

b. As regards interest-free deposit to the subsidiary, the terms and conditions of the deposit, including repayment thereof have not been stipulated and hence, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise.

i v. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been observed in such internal control system.

v. In our opinion and according to the information and explanations given to us, as the Company has not accepted any deposit from the public, Clause 3 (v) of the Order to comment on whether the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and rules framed there under, are not applicable.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as specified by the Central Government under Section 148 (1) of the Act in respect of its products 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 said accounts and records with a view to determine whether they are accurate or complete.

vii. a. According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Income- tax, Sales-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other statutory dues as applicable to it with the appropriate authorities and there are no arrears of outstanding statutory dues as at the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees' State Insurance Act are not applicable to the Company.

b. According to the information and explanations given to us and on the basis of the books and records examined by us, no amount of the Income-tax, Sales-tax, Wealth-tax or Cess is required to be deposited under dispute. In respect of Value Added Tax, Customs Duty, Excise Duty and Service Tax, which have not been deposited as on March 31, 2015 on account of disputes and the forum where the dispute is pending, are given below:

Nature of Dues - Name of the Amount Period to which Forum where dispute is pending Statute (RS,lacs) amount relates

Value Added Tax - Gujarat Value Added Tax Act, 2003

Value Added Tax (VAT) * 374.10 2007-2010 Joint Commissioner of Sales Tax

Interest on VAT 472.93

Penalty on VAT 435.67

* Against this a deposit of Rs. 223 lacs have been kept with Gujarat State Financial Services Limited

Custom Duty - Customs Act, 1962

Duty and interest 3.25 2009-2011

Commissioner of Customs (Appeals) Duty, interest and penalty 290.45 2012-2013

Duty, interest and penalty 266.64 2011-2012 CESTAT

Excise Duty - Central Excise Act, 1944

Duty 122.66 2001-2002 CESTAT

Duty, interest and penalty 174.05 2007-2008 Honourable High Court of Gujarat

Penalty 0.70 2012-2013 Commissioner of Excise (Appeals)

Service Tax - Central Excise Act, 1944

Tax and penalty 490.86 2005-2014 CESTAT

Tax and penalty 2.39 2006-2007 CESTAT

Tax and penalty 44.11 2006-2011 CESTAT

c. The Company is not required to transfer any amount to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

viii. The accumulated losses of the Company at the end of the financial year are less than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

ix. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

x. According to the information and explanations given to us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 3 (x) of the Order, to comment on whether the terms and conditions are prejudicial to the interest of the Company is not applicable.

xi. The Company has not obtained any term loan during the year, and accordingly, requirement of Clause 3 (xi) of the Order, to comment on whether the term loans obtained during the year by the Company were applied for the purpose for which the loans were obtained is not applicable.

xii. Based on the audit procedures performed and to the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For bans S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H. CLERK

Partner

Membership No. 36148

Place : MUMBAI

Date : May 14, 2015

Mar 31, 2014

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

Management''s Responsibility for the 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 principles generally accepted in India including Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair 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 entity''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 that we have obtained is sufficient and appropriate to provide a basis for our 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:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the 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 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 Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

[Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of SAURASHTRA CEMENT LIMITED on the financial statements for the year ended March 31, 2014.]

On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we report that:

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of most of the fixed assets.

(b) As explained to us, during the year, most of the fixed assets have been physically verified by the management so as to cover all the fixed assets on a rotation basis, the frequency of which, in our opinion, is reasonable. No material discrepancies have been noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. (a) Inventories other than stocks-in-transit have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks-in-transit at the year end, the necessary documentary evidences have been obtained.

(b) In our opinion, 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, the Company is maintaining proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

iii. (a) As per the information furnished, in earlier years, the Company had granted interest-free unsecured deposit to one of its subsidiary companies. The maximum amount outstanding during the year and year-end balance from the said subsidiary company is Rs. 34.40 lacs. The Company has not granted any other loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) As regards interest-free deposit to the subsidiary company, no other terms and conditions, including repayment thereof have been stipulated and hence, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and the fact that it is given to a subsidiary, the same is not, prima facie, prejudicial to the interest of the Company.

(c) As the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii) (e) of the Order requiring the Company to give the number of parties and amount involved in the transactions, Clause (iii) (f) of the Order requiring to comment upon whether the rate of interest and other terms and conditions of loans taken being prima facie prejudicial to the interest of the Company and Clause (iii) (g) requiring to comment upon the regularity of payment of the principal amount and interest, are not applicable.

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 and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v. (a) According to the information and explanations given to us and the records examined by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, there have been no transaction made in pursuance of such contracts or arrangements entered into the register made under Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the year, other than interest - free deposit referred to in Paragraphs iii (a) and iii (b) above.

vi. As legally advised, the Company considers security deposits received from stockists and transporters as security for proper fulfillment of the contracts and advances received from customers as falling outside the purview of Section 58A of the Act. Subject to the above, in our opinion and according to the information and explanations given to us, as the Company has not accepted any deposit from the public, the question of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, does not arise. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company''s products to which the said rules are applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Fund, Investor Education and Protection Fund, Income-tax, Value Added Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities, except for delay in one month of some cases of Service Tax. As per the information and explanations given to us, as also on the basis of the books and records examined by us, there are no arrears of undisputed statutory dues outstanding as at the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees'' State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of the books and records examined by us, no amount of the Income-tax, Wealth-tax and Cess is under dispute. In respect of Value Added Tax, Customs Duty, Excise Duty and Service Tax, which have not been deposited as on March 31, 2014 on account of disputes and the forum where the dispute is pending, are given below:

Nature of Dues - Amount Period to which Forum where dispute Name of the Statute (Rs. lacs) amount relates is pending

Value Added Tax - Gujarat Value Added Tax Act, 2003

Value Added Tax (VAT)* 374.10

Interest on VAT 440.14

Penalty on VAT 435.67 2007-2010 Joint Commissioner of Sales Tax * Against this a deposit of Rs. 223 lacs have been kept with Gujarat State Financial Services Limited

Custom Duty - Customs Act, 1962

Duty and interest 3.25 2009-2011 Commissioner of Customs (Appeals) Duty and penalty 266.64 2011-2012

Excise Duty - Central Excise Act, 1944

Duty 122.66 2001-2002 CESTAT

Duty, interest and penalty 174.05 2007-2008 Honourable High Court of Gujarat

Service Tax - Central Excise Act, 1944

Tax and penalty 58.50 1997-1998 CESTAT

Tax and penalty 2.39 2006-2007 CESTAT

Tax and penalty 44.11 2006-2011 CESTAT

x. The accumulated losses of the Company as on March 31, 2014 are less than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in repayment of dues to financial institutions, bankers or debenture holders.

xii. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. As the Company is not a chit fund or nidhi / mutual benefit fund / society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

xiv. According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company is not dealing or trading in shares, securities, debentures and other investments, the requirements of Clause 4(xiv) of the Order relating to the maintenance of proper records of the transactions and contracts and making of timely entries therein are not applicable. All the investments are held by the Company in its own name.

xv. According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 4 (xv) of the Order to comment on whether the terms and conditions, whereof are prejudicial to the interest of the Company, is not applicable.

xvi. According to the information and explanations given to us, as also on the basis of the books and records examined by us, in our opinion, on an overall basis, the new term loans obtained during the year by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us, and also on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii. As the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year, Clause 4 (xviii) is not applicable.

xix. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the security or charge in respect of debentures issued during an earlier year has been created.

xx. As the Company has not raised any money by public issues during the year, Clause 4 (xx) of the Order requiring to disclose the end use of money raised and verifying the same is not applicable.

xxi. Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud (i.e. intentional material misstatements resultant from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the course of our audit.

For BANSI S. MEHTA & CO. Chartered Accountants Firm Registration No. 100991W

PARESH H. CLERK Place : MUMBAI Partner Date : MAY 30, 2014 Membership No. 36148

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the 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 principles generally accepted in India including accounting standards referred to in section 211(3C) 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:

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

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

Hi. 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

i. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order"), as amended by the Companies (Auditor''s Report) (Amendment) Order 2004 , issued by the Central Government of India in terms of section 227(4A) of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in section 211 (3C) of the Act;

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

Annexure to the Independent Auditors'' Report

[Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of SAURASHTRA CEMENT LIMITED on the financial statements for the year ended March 31, 2013.]

On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we report that:

i) a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of most of the fixed assets.

b. During the year, most of the fixed assets of the Company have been physically verified by the management, the frequency of which, in our opinion, is reasonable, and no material discrepancy is stated to have been noticed on such verification.

c. During the year, the Company has not disposed off any substantial part of its fixed assets so as to affect its going concern. ii) a. Inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. In case of stocks-in-transit and inventories lying with third parties, confirmations have been obtained in most cases at the year end.

b. in our opinion, 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, the Company is maintaining proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

iii) a. As per the information furnished, in earlier years, the Company had granted interest-free unsecured deposit to one of its subsidiary companies. The maximum amount outstanding during the year and year-end balance from the said subsidiary company is Rs. 34.40 lacs. The Company has not granted any other loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

b. As regards interest-free deposit to the subsidiary company, no other terms and conditions, including repayment thereof have been stipulated and hence, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and that it is given to a subsidiary, the same is not, prima facie, prejudicial to the interest of the Company.

As the Company has not granted any other loans to companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii)(b) of the Order relating to the rate of interest and other terms and conditions, whether prima facie, prejudicial to the interest of the Company, Clause (iii) (c) relating to regularity of the receipt of principal amount and interest and Clause (iii)(d) relating to steps for recovery of overdue amount of more than rupees one lac, are not applicable.

c. As the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii) (e) of the Order requiring the Company to give the number of parties and amount involved in the transactions, Clause (iii) (f) of the Order requiring to comment upon whether the rate of interest and other terms and conditions of loans taken being prima facie prejudicial to the interest of the Company and Clause (iii) (g) requiring to comment upon the regularity of payment of the principal amount and interest, are not applicable.

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 and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) a. According to the information and explanations given to us and the records examined by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under Section 301 of the Act have been so entered. b. In our opinion and according to the information and explanations given to us, there have been no transaction made in pursuance of such contracts or arrangements entered into the register made under Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the year, other than interest - free deposit referred to in Paragraphs iii (a) and iii (b) above.

vi) As legally advised, the Company considers security deposits received from stockists and transporters as security for proper

fulfillment of the contracts and advances received from customers as falling outside the purview of Section 58A of the Act. Subject to the above, in our opinion and according to the information and explanations given to us, as the Company has not accepted any deposit from the public, the question of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, does not arise. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central

Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company''s products to which the said rules are applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix) a. According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Income-tax, Provident Fund, Investor

Education and Protection Fund, Wealth Tax, Custom Duty, Cess and other statutory dues with the appropriate authorities, except some delays In respect of Excise Duty, Service Tax and Value Added Tax. As per the information and explanations given to us, as also on the basis of the books and records examined by us, there are no arrears of undisputed statutory dues outstanding as at the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees'' State Insurance Act are not applicable to the Company.

x. The accumulated losses of the Company as on March 31, 2013 are less than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in repayment of dues to financial institutions, bankers or debenture holders during the year.

xii. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. As the Company is not a chit fund or nidhi / mutual benefit fund / society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

xiv. According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company is not dealing or trading in shares, securities, debentures and other investments, the requirements of Clause 4(xiv) of the Order relating to the maintenance of proper records of the transactions and contracts and making of timely entries therein are not applicable. All the investments are held by the Company in its own name.

xv. According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 4

(xv) of the Order to comment on whether the terms and conditions, whereof are prejudicial to the interest of the Company, is not applicable.

xvi. According to the information and explanations given to us, as also on the basis of the books and records examined by us, in our opinion, on an overall basis, the new term loans obtained during the year by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us, and also on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii. As the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year, Clause 4 (xviii) is not applicable.

xix. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the security or charge in respect of debentures issued during an earlier year has been created.

xx. As the Company has not raised any money by public issues during the year, Clause 4 (xx) of the Order requiring to disclose the end use of money raised and verifying the same is not applicable.

xxi. Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud (i.e. intentional material misstatements resultant from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the course of our audit.

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H. CLERK

Place : Mumbai Partner

Date : May 28, 2013 Membership No. 36148

Mar 31, 2012

1 We have audited the attached Balance Sheet of SAURASHTRA CEMENT LIMITED ("the Company") as at March 31, 2012, the Statement of Profit and Loss and the Statement of Cash Flow 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4 Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, Statement of Profit and Loss and Statement of Cash Flow dealt with by this report are in agreement with the books of account;

d. In our opinion, the said Balance Sheet, Statement of Profit and Loss and Statement of Cash Flow dealt with by this report read with Note 13 forming part of the financial statements, adverting to accounting for Deferred Tax Asset of Rs 4636.27 lacs, based on the position set out therein, comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

e. On the basis of written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is, prima facie, disqualified as on March 31, 2012 from being appointed as a Director in terms of the provisions under clause (g) of sub-section (1) of Section 274 of the Act.

f. In our opinion and to the best of our information and according to the explanations given to us, the financial statements read with Significant Accounting Policies and Notes forming part thereof, including Note 13, adverting to accounting for deferred tax asset of Rs 4636.27 lacs, based on the position set out therein, give the information required by the Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India.

i. In the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

ii. In the case of the statement of profit and loss, of the loss for the year ended on that date; and

iii. In the case of the statement of cash flow, of the cash flows for the year on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 1 of the report)

i) a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of the most of fixed assets.

b. During the year, most of the fixed assets of the Company have been physically verified by the management, the frequency of which, in our opinion, is reasonable, and no material discrepancy is stated to have been noticed on such verification.

c. During the year, the Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii) a. Inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. In case of stocks-in-transit and inventories lying with third parties, confirmations have been obtained in most cases at the year end.

b. In our opinion, 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, the Company is maintaining proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

iii) a. As per the information furnished, in earlier years, the Company had granted interest-free unsecured deposit to one of its subsidiary companies; the maximum amount outstanding during the year and year-end balance from the said subsidiary company is Rs 34.40 lacs. The Company has not granted any other loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

b. As regards interest-free deposit to the subsidiary company, no other terms and conditions, including repayment thereof have been stipulated and hence, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and that it is given to a subsidiary, the same is not, prima facie, prejudicial to the interest of the Company.

As the Company has not granted any other loans to companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii)(b) of the Order relating to the rate of interest and other terms and conditions, whether prima facie, prejudicial to the interest of the Company, Clause (iii)

(c) relating to regularity of the receipt of principal amount and interest and Clause (iii)(d) relating to steps for recovery of overdue amount of more than rupees one lac, are not applicable.

c. As the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii) (f) of the Order requiring to comment upon whether the rate of interest and other terms and conditions of loans taken being prima facie prejudicial to the interest of the Company and Clause (iii) (g) requiring to comment upon the regularity of payment of the principal amount and interest, are not applicable.

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 and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control.

v) a. According to the information and explanations given to us and the records examined by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under Section 301 of the Act have been so entered.

b. In our opinion and according to the information and explanations given to us, there have been no transaction made in pursuance of such contracts or arrangements entered into the register made under Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the year, other than interest - free deposit referred to in Paragraphs (iii) a to (iii) b above.

vi) As legally advised, the Company considers security deposits received from stockists and transporters as security for proper fulfillment of the contracts and advances received from customers as falling outside the purview of Section 58A of the Act. Subject to the above, in our opinion and according to the information and explanations given to us, as the Company has not accepted any deposit from the public, the question of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, does not arise. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company's products to which the said rules are applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix) a According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Income-tax, Provident Fund, Investor Education and Protection Fund, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues with the appropriate authorities, except some delays in respect of Value Added Tax. As per the information and explanations given to us, as also on the basis of the books and records examined by us, there are no arrears of undisputed statutory dues outstanding as at the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees' State Insurance Act are not applicable to the Company.

b According to the information and explanations given to us and on the basis of the books and records examined by us, no amounts of the Income-tax, Wealth-tax and Cess are under dispute. In respect of Sales Tax, Customs Duty, Excise Duty and Service Tax, which have not been deposited as on March 31, 2012 on account of disputes and the forum where the dispute is pending, are given below:

Nature of Dues Amount (Rs lacs) Period to which Forum where dispute is pending amount relates

Sales Tax

Interest on Deferred

Sales Tax 1942.28* 1989-1999 Government of Gujarat

Sales Tax 800.10* 1999-2006 Government of Gujarat

Interest on Sales Tax 4243.43* 1999-2006

Sales Tax Penalties 3050.78* 2004-2005 Joint Commissioner of Sales Tax

Value Added Tax, Interest 1410.02 2006-2009 Sales Tax Tribunal and Penalty thereon

Custom Duty 670.94 1993-2011 Customs Excise & Service Tax Appellate Tribunal (CESTAT)

Excise Duty 176.19 2007-2008 CESTAT

Service Tax 58.50 1997-1998 CESTAT

3.56 2006-2007 CESTAT

44.11 2006-2012 Commissioner Appeals

* Against these dues (as also other dues in respect of Electricity Duty and Royalty dues aggregating to Rs 7045.70 lacs), the Company has unconditionally deposited a sum of Rs 7000 lacs, with Gujarat State Financial Services Limited in respect of the proposed One Time Settlement with the Government of Gujarat. (Refer Note 9 forming part of the financial statements)

x) The accumulated losses of the Company as on March 31, 2012 are more than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial year but had incurred cash losses in the immediately preceding financial year.

xi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, during the year, there have been delays in repayment of dues (including interest) to financial institutions and banks; however, as at the balance sheet date, no amount of such delays is outstanding. In respect of the debenture holders, the Company has defaulted in repayment of dues (including interest) during the year, and at the balance sheet date, principal amounting to Rs 172.77 lacs (Rs 86.39 lacs due on October 14, 2011 and Rs 86.38 lacs due on January 14, 2012) and interest payable amounting to Rs 102.03 lacs (Rs 55.06 lacs due on October 14, 2011 and Rs 46.97 lacs due on January 14, 2012) have remained unpaid till the year end and as informed, these amounts have since been paid.

xii) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) As the Company is not a chit fund or nidhi / mutual benefit fund / society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

xiv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company is not dealing or trading in shares, securities, debentures and other investments, the requirements of Clause 4(xiv) of the Order relating to the maintenance of proper records of the transactions and contracts and making of timely entries therein are not applicable. All the investments are held by the Company in its own name.

xv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 4 (xv) of the Order to comment on whether the terms and conditions, whereof are prejudicial to the interest of the Company, is not applicable.

xvi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, in our opinion, on an overall basis, the new term loans obtained during the year by the Company were, prima facie, applied for the purpose for which the loans were obtained, other than temporary deployment pending its application.

xvii) According to the information and explanations given to us, and also on an overall examination of the Balance Sheet of the Company, short-term funds due to increase in net current liabilities (including arising due to increase of Rs 3488.43 lacs on account of current maturities and unpaid amounts of long-term debts as also interest accrued and due thereon but excluding a sum of Rs 987.16 lacs for provision for interest payable on dues payable to the Government of Gujarat under One Time Settlement, both reflected in Note 9 forming part of the financial statements) aggregating to Rs 1042.91 lacs have been used for repayment of long term secured loans and interest thereon.

xviii) As the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year, Clause 4 (xviii) is not applicable.

xix) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the security or charge in respect of debentures issued during an earlier year has been created.

xx) As the Company has not raised any money by public issues during the year, Clause 4 (xx) of the Order requiring to disclose the end use of money raised and verifying the same is not applicable.

xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud (i.e. intentional material misstatements resultant from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the course of our audit.

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H CLERK

Mumbai Partner

Dated: May 11, 2012 Membership No. 36148

Mar 31, 2011

1 We have audited the attached Balance Sheet of SAURASHTRA CEMENT LIMITED ("the Company") as at March 31, 2011 and also the Profit and Loss Account and 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4 Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d In our opinion, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report read with Note 23 to Accounts under Schedule 13 adverting to accounting for Deferred Tax Asset of ^ 4839.76 lacs, based on the position set out therein, comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

e On the basis of written representations received from the Directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors is prima facie, disqualified as on March 31, 2011 from being appointed as a Director in terms of the provisions under clause (g) of sub-section (1) of Section 274 of the Act.

f In our opinion and to the best of our information and according to the explanations given to us, the accounts read together with Significant Accounting Policies in Schedule 12 and with the notes thereon in Schedule 13, including Note 23 to Accounts under Schedule 13, adverting to accounting for Deferred Tax Asset of Rs. 4839.76 lacs, based on the position set out therein, give the information required by the Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India.

i In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

ii In the case of the Profit and Loss Account, of the loss for the year ended on that date; and

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

Annexure to the Auditors Report (Referred to in paragraph 1 of the report)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of the most of fixed assets.

(b) During the year, most of the fixed assets of the Company have been physically verified by the management, the frequency of which, in our opinion, is reasonable, and no material discrepancy is stated to have been noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

(ii) (a) Inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. In case of stocks-in-transit and inventories lying with third parties, confirmations have been obtained in most cases at the year end.

(b) In our opinion, 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, the Company is maintaining proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, in earlier years, the Company had granted interest-free unsecured deposit to one of its subsidiary company; the maximum amount outstanding during the year and year-end balance from the said subsidiary company is Rs. 34.40 lacs. The Company has not granted any other loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) As regards interest-free deposits given to the said subsidiary company, no other terms and conditions, including repayment thereof have been stipulated and hence, the question of making any comment for the regularity of the receipt of the principal or the recovery of overdue amounts does not arise. Considering the amount involved and that it is given to a subsidiary, the same is not prima facie prejudicial to the interest of the Company.

As the Company has not granted any other loans to companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii)(b) of the Order relating to the rate of interest and other terms and conditions, whether prima facie, prejudicial to the interest of the Company, Clause (iii)(c) relating to regularity of the receipt of principal amount and interest and Clause (iii)(d) relating to steps for recovery of overdue amount of more than rupees one lac, are not applicable.

(c) As the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii) (f) of the Order requiring to comment upon whether the rate of interest and other terms and conditions of loans taken being prima facie prejudicial to the interest of the Company and Clause (iii) (g) requiring to comment upon the regularity of payment of the principal amount and interest, are not applicable.

(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 and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control.

(v) (a) According to the information and explanations given to us and the records examined by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under Section 301 of the Act 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 entered into the register made under Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

(vi) As legally advised, the Company considers security deposits received from stockists and transporters as security for proper fulfillment of the contracts and advances received from customers as falling outside the purview of Section 58A of the Act. Subject to the above, in our opinion and according to the information and explanations given to us, as the Company has not accepted any deposit from the public, the question of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, does not arise. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Companys products to which the said rules are applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Wealth Tax, Custom Duty, Cess and other statutory dues with the appropriate authorities. However, the Company is not regular in depositing undisputed statutory dues in respect of Income-tax, Sales-tax, Excise Duty and Service Tax with the appropriate authorities. As per the information and explanations given to us, as also on the basis of the books and records examined by us, there are no arrears of undisputed statutory dues outstanding as at the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of the books and records examined by us, no amounts of the Income-tax, Wealth-tax and Cess are under dispute. In respect of Sales Tax, Customs Duty, Excise Duty and Service Tax, which have not been deposited as on March 31, 2011 on account of disputes and the forum where the dispute is pending, are given below:

Nature of Dues Amount Period to which Forum where dispute (Rs. lacs) amount relates is pending

Sales Tax

Interest on Deferred Sales Tax 1942.28 * 1989-1999 Government of Gujarat

Sales Tax 800.10 * 1999-2006 Government of Gujarat Interest on Sales Tax 3912.16 * 1999-2006

Sales Tax Penalties 3050.78 * 2004-2005 Joint Commissioner of Sales Tax

Value Added Tax, Interest 494.03 2006-2007 Sales Tax Tribunal and Penalty thereon

Custom Duty 659.99 1993-1994 Customs Excise & Service Tax Appellate Tribunal (CESTAT) 2.75 2010-2011 CESTAT

8.56 2009-2011 Commissioner of Customs

8.12 2009-2010 Departmental Authorities

Excise Duty 174.05 2007-2008 CESTAT

Service Tax 58.50 1997-1998 CESTAT

3.56 2006-2007 Commissioner of Excise

* Against these dues (as also other dues in respect of Electricity Duty and Royalty dues aggregating to Rs. 6599.69 lacs), the Company has unconditionally deposited a sum of Rs. 70 Crore, with Gujarat State Financial Services Limited in respect of the proposed One Time Settlement with the Government of Gujarat. (Refer Note 10 to Accounts under Schedule 13)

(x) The accumulated losses of the Company as on March 31, 2011 are more than fifty per cent of its net worth. The Company has incurred cash losses in the current financial year but had not incurred cash losses in the immediately preceding financial period.

(xi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, during the year, the Company has defaulted in repayment of dues (including interest) to financial institutions and banks; however, as at the balance sheet date, no amount is outstanding. In respect of the debenture holders, the Company has defaulted in repayment of dues (including interest) during the year, and at the balance sheet date, principal amounting to Rs. 57.59 lacs, and interest payable amounting to Rs. 50.17 lacs, both, due on January 15,2011 have remained unpaid; these amounts have since been paid.

(xii) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As the Company is not a chit fund or nidhi / mutual benefit fund / society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

(xiv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company is not dealing or trading in shares, securities, debentures and other investments, the requirements of Clause 4(xiv) of the Order relating to the maintenance of proper records of the transactions and contracts and making of timely entries therein are not applicable. All the investments are held by the Company in its own name.

(xv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 4 (xv) of the Order to comment on whether the terms and conditions, whereof are prejudicial to the interest of the Company, is not applicable.

(xvi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, in our opinion, on an overall basis, the new term loans obtained during the year by the Company were, prima facie, applied for the purpose for which the loans were obtained, other than temporary deployment pending its application.

(xvii) According to the information and explanations given to us, and also on an overall examination of the Balance Sheet of the Company, short-term funds due to decrease in net current assets (other than working capital facilities from banks and provision for interest payable on dues payable to the Government of Gujarat under One Time Settlement, as detailed in Note 10 to Accounts under Schedule 13 of Rs. 839.26 lacs) aggregating to Rs. 133.90 lacs, have been used for repayment of long term secured loans and interest thereon.

(xviii) As the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year, Clause 4 (xviii) is not applicable.

(xix) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the security or charge in respect of debentures issued during an earlier year has been created.

(xx) As the Company has not raised any money by public issues during the year, Clause 4 (xx) of the Order requiring to disclose the end use of money raised and verifying the same is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud (i.e. intentional material misstatements resultant from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the course of our audit.

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H CLERK

Place : Mumbai Partner

Dated: April 21, 2011 Membership No. 36148

Mar 31, 2010

1. We have audited the attached Balance Sheet of SAURASHTRA CEMENT LIMITED ("the Company") as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the fifteen months period ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report read with Note 24 to Accounts under Schedule 13 adverting to accounting for Deferred Tax Asset of Rs. 7130.71 lacs, based on the position set out therein, comply with the applicable Accounting Standards referred to in Section 211(3C) of the Act, to the extent applicable,-

e) On the basis of written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is prima facie, disqualified as on March 31, 2010 from being appointed as a Director in terms of the provisions under Clause (g) of sub-section (1) of Section 274 of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, the accounts read together with the notes thereon, including Note 24 to Accounts under Schedule 13, adverting to accounting for Deferred Tax Asset of Rs. 7130.71 lacs, based on the position set out therein, give the information required by the Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India.

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2010;

ii. In the case of the Profit and Loss Account, of the profit for the fifteen months period ended on that date,- and

iii. In the case of the Cash Flow Statement, of the cash flows for the fifteen months period ended on that date.

Annexure to the Auditors Report (Referred to in parasraph 1 of the report)

(i) (a) The Company is maintainins proper records showing full particulars, including quantitative details and situation of the most of fixed assets.

(b) During the period, most of the fixed assets of the Company have been physically verified by the management and no material discrepancy is stated to have been noticed on such verification.

(c) During the period, the Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

(ii) (a) Inventories have been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. In case of stocks-in-transit and inventories lying with third parties confirmations have been obtained in most cases at the end of the period.

(b) In our opinion, 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, the Company is maintaining proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company had granted, in earlier years, interest-free unsecured deposit to two of its subsidiary companies,- the maximum amount involved during the period was Rs. 43.50 lacs and the period-end balance of deposit was Rs. 34.40 lacs only, from one subsidiary company. The Company has not granted any other loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) As regards interest-free deposits given to subsidiary companies, no other terms and conditions, including repayment thereof have been stipulated; during the period, one subsidiary company repaid the deposit given to it.

As the Company has not granted any other loans to companies, firms or other parties covered in the register maintained under Section 301 of .the Act, Clause (iiiXb) of the Order relating to the rate of interest and other terms and conditions, whether prima facie, prejudicial to the interest of the Company, Clause (iii)(c) relating to regularity of the receipt of principal amount and interest and Clause (iiiXd) relating to steps for recovery of overdue amount of more than Rupees One Lac, are not applicable.

(c) As the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act, Clause (iii) (f) of the Order requiring to comment upon whether the rate of interest and other terms and conditions of loans taken being prima facie prejudicial to the interest of the Company and Clause (iii) (g) requiring to comment upon the regularity of payment of the principal amount and interest, are not applicable.

(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 and the sale of goods and services. The internal control system for the purchase of fixed assets is being strengthened. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control

(v) (a) According to the information and explanations given to us and the records examined by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under Section 301 of the Act 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 entered into the register made under Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the period, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

(vi) As legally advised, the Company considers security deposits received from stockists and transporters as security for proper fulfillment of the contracts and advances received from customers as falling outside the purview of Section 58A of the Act. Subject to the above, in our opinion and according to the information and explanations given to us, as the Company has ^^

not accepted any deposits from the public during the period, the question of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder, does not arise. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Companys products to which the said rules are applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Wealth Tax, Custom Duty, Cess and other statutory dues with the appropriate authorities. However, the Company is not regular in depositing undisputed statutory dues in respect of Income-tax, Sales-tax, Excise Duty and Service Tax with the appropriate authorities. As informed to us, the provisions of the Employees State Insurance Act are not applicable to the Company. As per the information and explanations given to us, as also on the basis of the books and records examined by us, there are no arrears of undisputed statutory dues outstanding as at the last day of the financial period, for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and on the basis of the books and records examined by us, the details of Income-tax, Wealth-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31,2010 on account of disputes and the forum where the dispute is pending, are given below:

Nature of Dues Amount Period Forum where to which dispute is (Rs. lacs) amount relates pending

Sales Tax

Interest on Deferred Sales Tax 1942.28* 1989-1999 Sales Tax Tribunal

Sales Tax 584.58* 1999-2006 Government of Gujarat

Interest on sales Tax 3551.90* 1999-2006

Sales Tax Penalties 3272.48* 2003-2005 Joint Commissioner of Sales Tax

Value Added Tax, Interest and Penalty thereon 494.03 2006-2007 Sales Tax Tribunal 659.99 1993-1994 Commissioner of Customs

customs Duty 8.12 2009-2010 Departmental Authorities Excise Duty 174.05 2007-2008 CESTAT

Service Tax 60.89 2005-2007 Commissioner of Service Tax

* Against these and also in respect of Electricity Duty and Royalty dues aggregating to Rs. 6139.81 lacs, the Company has unconditionally deposited a sum of Rs. 70 Crore, with Gujarat State Financial Services Limited in respect of proposed One Time Settlement with the Government of Gujarat. (Refer Note 12 to Accounts under Schedule 13)

(x) The accumulated losses of the Company as on March 31, 2010 are more than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial period but has incurred cash losses in the immediately preceding financial period.

(xi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in repayment of dues (including interest) to financial institutions, bankers or debenture holders as at the balance sheet date.

(xii) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As the Company is not a chit fund or nidhi/mutual benefit fund/society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

(xiv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company is not dealing or trading in shares, securities, debentures and other investments, the requirements of Clause 4(xiv) of the Order relating to the maintenance of proper records of the transactions and contracts and making of timely entries therein are not applicable. All the investments are held by the Company in its own name.

(xv) According to the information and explanations given to us, as also on the basis of the books and records examined by us, as the Company has not given any guarantee for loans taken by others from banks or financial institutions, the requirement of Clause 4 (xv) of the Order to comment on whether the terms and conditions, whereof are prejudicial to the interest of the Company, is not applicable.

(xvi) According to the information and explanations given to us, as also on the basis of the books and records examined by us, in our opinion, on an overall basis, the new term loans obtained during the period by the Company were, prima facie, applied for the purpose for which the loans were obtained, other than temporary deployment pending its application.

(xvi i) According to the information and explanations given to us, and also on an overall examination of the Balance Sheet of the Company, short-term funds due to decrease in net current assets (other than working capital facilities from banks and provision for interest payable on dues payable to Government of Gujarat under One Time Settlement as detailed in Note 12 to Accounts under Schedule 13 of Rs. 1045.27 lacs) aggregating to Rs. 2115.33 lacs, have been used fo repayment of long term secured loans and interest thereon, being the amounts due within one year as at the beginning of the period.

(xviii) As the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the period, Clause 4 (xviii) is not applicable.

(xix) According to the information and explanations given to us, as also on the basis of the books and records examined by us, the security or charge in respect of debentures issued during an earlier year has been created.

(xx) As the Company has not raised any money by public issues during the year, Clause 4 (xx) of the Order requiring to disclose the end use of money raised and verifying the same is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud (i.e. intentional material misstatements resultant from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the course of our audit.

For Bansi S. Mehta & Co.

Chartered Accountants Firm Registration No. 100991W Paresh H. Clerk

Place: Mumbai Partner

Dated: July 30, 2010 Membership No. 36148

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