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Auditor Report of Dalmia Bharat Sugar and Industries Ltd.

Mar 31, 2017

To the Members of

Dalmia Bharat Sugar and Industries Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Dalmia Bharat Sugar and Industries Limited ("the Company"), which comprise the balance sheet as at 31st March, 2017, the statement of profit and loss, and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.

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 standalone 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 standalone 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 financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 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 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 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 31st March, 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 the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

c) The balance sheet, the statement of profit and loss, 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 and the Companies (Accounting Standards) Amendment Rules, 2016;

e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

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

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

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements as referred to in Note 30 to the standalone financial statements.

ii. Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in note 47 to these financial statements as to the holding of Specified Bank Notes on 8 November, 2016 and 30 December, 2016 as well as dealing in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on audit procedure and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management.

Report on the matters specified in paragraph 3 of the Companies (Auditor''s Report) Order, 2016 (“the Order'') issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (“the Act") as referred to in paragraph 1 of ''Report on Other Legal and Regulatory Requirements'' section.

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

(b) The fixed assets have been physically verified by the management during the year, the frequency of which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such verification.

(c) In our opinion, and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company except for 2.79 acres (having gross block and net block of H0.13 Crores) of land at Salem for which all dues for transfer of land in favour of the Company have been paid and transfer of title in the name of company is awaited.

ii. The Management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

iii. (a) The Company has given interest bearing unsecured demand loans to companies, covered in the register maintained under Section 189 of the Act.

(b) The terms and conditions of the grant of such loans are not prejudicial to the Company''s interest;

(c) The loan given is repayable on demand and hence there is no overdue amount as on the date and the relevant reporting is not applicable.

iv. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under.

vi. We have broadly reviewed the Cost Accounting records maintained by the Company pursuant to the Rules prescribed by the Central Government for the maintenance of cost records 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 are, however, not required to make a detailed examination of such books and records.

vii. a. According to the records of the Company examined

by us and the information and explanations given to us, the Company is generally regular in depositing its undisputed statutory dues including Employees'' Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other material statutory dues, as applicable, with the appropriate authorities during the year and there are no such undisputed amounts payable which have remained outstanding as at March 31, 2017 for a period of more than six months from the date they became payable.

b. According to the records of the Company, the details of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty and Value added tax which have not been deposited on account of any dispute and the forum where the dispute is pending, are as follows :

Name of Statue

Nature of dues

Forum where the dispute is pending

Period for which the amount relates

Amount (in Rs, Crores)

Central Excise Act, 1944

Demand of differential duty reversed under Rule 6 (3).

Assistant Commissioner, LTU, Delhi

2012 to 2015

0.29

Central Excise Act, 1944

Demand of Excise duty on sale of Multilayer Ceramic Chip Capacitors

Assistant Commissioner, LTU, Delhi

2008-09 to 2013-14

0.02

Central Excise Act, 1944

Disallowance of cenvat credit

Assistant Commissioner, LTU, Delhi

April 2010 to March 2015

0.96

Name of Statue

Nature of dues

Forum where the dispute is pending

Period for which the amount relates

Amount (in Rs, Crores)

Central Excise Act, 1944

Demand of duty on Molasses transfer to distillery unit

Cestat, Delhi

July 2012 to March 2015

36.43

Central Excise Act, 1944

Demand of duty on sale of Electricity.

Cestat, Delhi

October 2009 to June 2012

11.58

Central Excise Act, 1944

Demand on duty of bagasse sale

Cestat, Delhi

April 2008 to March 2010

0.50

Central Excise Act, 1944

Demand on Storage Loss of finished goods

Cestat, Delhi

July 2007 to March 2010

0.01

Central Excise Act, 1944

Disallowance of cenvat credit

Cestat, Delhi

March 2006 to March 2010

0.15

Central Excise Act, 1944

Disallowance of cenvat credit

Commissioner (A), LTU

December 2009 to August 2013

0.01

Central Excise Act, 1944

Demand on duty of bagasse sale

Dy. Commissioner LTU

April 2010 to June 2010

0.05

Central Excise Act, 1944

Disallowance of cenvat credit

Dy. Commissioner LTU

March 2006 to September 2012

0.24

Central Excise Act, 1944

Disallowance of cenvat credit

High Court, Allahabad

June 2005 to September 2005

0.04

Central Sale Tax

Entry tax demand

Add. Commissioner (Appeal), Sitapur

2006-07 to 2011-12

1.82

Central Sale Tax

CST Demand

Additional Commissioner (Appeal), Lucknow

2010-11

0.30

Central Sale Tax

Entry tax demand

Additional Commissioner (Appeal), Lucknow

2012-13 & 2013-14

0.04

Central Sale Tax

Entry tax demand

Dy. Commissioner (Assessment)-II Sitapur

2007-08, 2009-10

1.53

Central Sale Tax

Entry tax demand

High Court, Allahabad

2001-02

0.03

Finance Act, 1994

Disallowance of cenvat credit

Additional Commissioner, LTU

August 2014 to May 2016

0.47

Finance Act, 1994

Service tax demand on various services

Additional Commissioner, LTU

2008-09 to 2013-14

0.41

Finance Act, 1994

Service tax demand on various services

Assistant Commissioner, LTU

September 2014 to January 2016

0.05

Finance Act, 1994

Denial of credit on Service tax paid by Sugar selling agent.

Cestat, Delhi

October 2004 to March 2011

0.43

Finance Act, 1994

Disallowance of cenvat credit

Cestat, Delhi

November 2008 to March 2011

0.80

Finance Act, 1994

Service tax demand on various services

Cestat, Delhi

January 2003 to September 2009

0.05

Finance Act, 1994

Disallowance of cenvat credit

Commissioner (A), LTU

March 2006 to March 2015

0.68

Finance Act, 1994

Disallowance of cenvat credit

Dy. Commissioner LTU

April 2010 to March 2011

0.04

Finance Act, 1994

Disallowance of cenvat credit

Dy. Commissioner LTU

March 2006 to September 12

0.07

Finance Act, 1994

Service tax demand on various services

Dy. Commissioner LTU

2006-07 to August 2013

0.16

Finance Act, 1994

Disallowance of cenvat credit

Suptd., LTU, New Delhi

November 2010 to March 2012

0.01

Finance Act, 1994

Service tax demand on various services

Suptd., LTU, New Delhi

November 2010 to March 2012

0.02

viii. In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, bank or debenture holders.

ix. In our opinion, and according to the information and explanations given to us, the Company has not raised any money way of initial public offer / further public offer, further term loans taken during the year were applied for the purpose for which the loans were obtained.

x. In our opinion, and according to the information and explanations given to us, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed or reported during the year.

xi. In our opinion, and according to the information and explanations given to us, the managerial remuneration has been paid / provided 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. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company.

xiii. In our opinion, and according to the information and explanations given to us during the course of audit, transactions with the related parties are in compliance with section 177 and section 188 of the Act and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the books of account, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence not commented upon.

xv. In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act as referred to in paragraph 2(f) of ''Report on Other Legal and Regulatory Requirements'' section

We have audited the internal financial controls over financial reporting of the Company as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India". 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 Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit.

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone 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:

a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone 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

c) 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For S S Kothari Mehta & Co.

Chartered Accountants

Firm''s Registration No. 000756N

Sunil Wahal

Place: New Delhi Partner

Date: May 5, 2017 Membership No. 087294


Mar 31, 2016

To the Members of

Dalmia Bharat Sugar and Industries Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Dalmia Bharat Sugar and Industries Limited ("the Company"), which comprise the balance sheet as at 31st March, 2016, the statement of profit and loss, and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 standalone 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 financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 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 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 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 31st March, 2016, 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 the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

c) The balance sheet, the statement of profit and loss, 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 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

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

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our

opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements as referred to in Note 30 to the standalone financial statements.

ii. Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Report on the matters specified in paragraph 3 of the Companies (Auditor''s Report) Order, 2016 ("the Order'') issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 ("the Act") as referred to in paragraph 1 of ''Report on Other Legal and Regulatory Requirements'' section.

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

(b) The fixed assets have been physically verified by the management during the year, the frequency of which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such verification.

(c) In our opinion, and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company except for 2.79 acres (having gross block and net block of Rs. 0.13 Crores) of land at Salem for which all dues for transfer of land in favour of the Company has been paid and transfer of title in the name of company is awaited.

ii. In respect of the Company''s inventories:

(a) As explained to us the Management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties which have been verified with reference to correspondence received from third parties.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of accounts.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly clauses 3(iii) (a) to (c) of the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under are not applicable.

vi. We have broadly reviewed the Cost Accounting records maintained by the Company pursuant to the Rules prescribed by the Central Government for the maintenance of cost records 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 are, however, not required to make a detailed examination of such books and records.

vii. a) According to the records of the Company examined by us and the information and explanations given to us, the Company has generally deposited its statutory dues including Employees'' Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other material statutory dues within the prescribed time with the appropriate authorities during the year and there are no such undisputed amounts payable which have remained outstanding as at March 31, 2016 for a period of more than six months from the date they became payable.

b. According to the records of the Company, the details of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty and Value added tax which have not been deposited on account of any dispute and the forum where the dispute is pending, are as follows :

Name of the Statue

Period for which the amount relates

Nature of Dues

Forum where the dispute is pending

Amount (in Rs Crores)

Central Excise Act, 1944

2014-15

Convert credit on cement & steel

Addl. Commissioner LTU, New Delhi

0.20

Central Excise Act, 1944

2014-15

Convert credit on cement & steel

Asst. Commissioner LTU Delhi

0.07

Central Excise Act, 1944

2013-14

Convert credit on cement & steel

CESTAT, Delhi

0.42

Central Excise Act, 1944

March 06 to March 2010

Canvas credit on cement & steel

CESTAT, Delhi

5.86

Central Excise Act, 1944

March 06 to September 2012

Canvas credit on cement & steel

Dy. Commissioner LTU, New Delhi

0.06

Central Excise Act, 1944

July 02, to June 2010

Demand of duty on biogases & electricity sale

CESTAT, Delhi

16.56

Central Excise Act, 1944

2013-14

Demand of duty on molasses

CESTAT, Delhi

8.33

Central Excise Act, 1944

2014-15

Demand of duty on multilayer ceramic chip capacitors

Addl. Commissioner LTU, New Delhi

0.02

Central Excise Act, 1944

2006-07 Till Date

Demand of duty on multilayer ceramic chip capacitors

Cassatt, Bangalore.

0.04

Central Excise Act, 1944

July 07 to March 2010

Demand on storage loss of finished goods

CESTAT, Delhi

0.01

Central Excise Act, 1944

2009-10

Demand on storage loss of finished goods

Dy. Commissioner LTU, New Delhi

0.07

Central Excise Act, 1944

2013-14

Disallowance of convert credit

CESTAT, Delhi

0.16

Central Excise Act, 1944

January 15 to February 15

Disallowance of convert credit

COMM, LTU.

4.01

Central Excise Act, 1944

September 2004 to March 2011

Disallowance of convert credit

Commissioner (A) LTU, New Delhi

0.16

Central Excise Act, 1944

2014-15

Disallowance of convert credit

Commissioner, LTU, New Delhi

24.09

Central Excise Act, 1944

April 10 to June 12

Disallowance of convert credit

Commissioner, LTU, New Delhi

10.70

Central Excise Act, 1944

April 10 to Sept. 12

Disallowance of convert credit

Dy. Commissioner LTU, New Delhi

0.38

Central Excise Act, 1944

2014-15

Disallowance of convert credit

Suptd, LTU New Delhi

0.01

Central Excise Act, 1944

April 10 to September 2012

Disallowance of convert credit

Suptd, LTU New Delhi

0.05

Central Excise Act, 1944

April 10 to September 2012

Loss on reprocessing of finished goods

Allahabad High Court

0.03

Central Excise Act, 1944

2002-03, 2003-04

Loss on reprocessing of finished goods

CESTAT, Delhi

0.02

Central Sale Tax

2006-07

Entry tax

Add. Comm (Appeal)

0.06

Central Sale Tax

2007-2012

Entry tax

Add. Comm (Appeal) Sitapur

0.18

Central Sale Tax

2010-11

Entry tax

Additional commissioner (A) - Sitapur

0.15

Central Sale Tax

2007-08

Entry tax

Dy. Comm (Assessment)-II Sitapur

0.01

Central Sale Tax

2001-02

Entry tax

High Court

0.03

Central Sale Tax

2013-14

Entry tax

Joint Commissioner, Bareily

0.02

Central Sale Tax

2013-14

Entry tax

Joint Commissioner, Muradabad

0.01

Central Sale Tax

2009-10

Entry tax

Dy. Comm (Assessment)-II Sitapur

1.37

Central Sale Tax

2006-07

Entry tax

Add. Commissioner (Appeal) - Sitapur

0.11

Finance Act, 1994

2013-14

Demand of service tax on Incentive received from HDFC Bank and on import of services.

Addl. Commissioner LTU, New Delhi

0.36

Finance Act, 1994

2014-15

Demand of service tax on Incentive received from HDFC Bank and on import of services.

Asst. Commissioner LTU Delhi

0.05

Finance Act, 1994

2014-15

Demand of service tax on the amount of air ticket cancelled.

Addl. Commissioner LTU, New Delhi

0.11

Finance Act, 1994

February 2015 to January 2016

Demand of service tax on the amount of air ticket cancelled.

Asstt. Comm.

0.04

Finance Act, 1994

2013-14

Demand of service tax on the amount of air ticket cancelled.

Dy. Comm.

0.08

Finance Act, 1994

2013-14

Demand of service tax on the amount of air ticket cancelled.

Dy. Commissioner LTU, New Delhi

0.05

Finance Act, 1994

October 2014 to January 2016

Demand of service tax on the commission

Asst. Comm.

0.03

Finance Act, 1994

2014-15

Demand of service tax on the commission

Asst. Commissioner LTU Delhi

0.02

Finance Act, 1994

2013-14

Demand of service tax on the commission

Dy. Commissioner LTU, New Delhi

0.02

Finance Act, 1994

2014-15

Disallowance of service tax credit

Asst. Commissioner LTU Delhi

0.19

Finance Act, 1994

2013-14

Disallowance of service tax credit

CESTAT, Delhi

0.08

Finance Act, 1994

October 04 to March 2011

Disallowance service tax credit

CESTAT, Delhi

1.33

Finance Act, 1994

June 05 to March 10

Disallowance service tax credit

Commissioner (A) LTU, New Delhi

0.09

Finance Act, 1994

March 2006 to September 12

Disallowance service tax credit

Dy. Commissioner LTU, New Delhi

0.18

Finance Act, 1994

April 2010 to March 2012

Disallowance of service tax credit

Suptd, LTU New Delhi

0.11

Finance Act, 1994

March 03 to Oct. 10

Service tax demand on commission

CESTAT, Delhi

0.05

Finance Act, 1994

October 06 to September 2011

Service tax demand on commission

Dy. Commissioner LTU, New Delhi

0.11

Finance Act, 1994

November 2010 to December 2011

Service tax demand on commission

Suptd, LTU New Delhi

0.02

UP VAT

2007-08

UP VAT

Dy. Comm (Assessment)-II Sitapur

0.31

viii. In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, bank or debenture holders.

62 Dalmia

ix. In our opinion, and according to the information and explanations given to us, the Company has not raised any money way of initial public offer / further public offer, further term loans taken during the year were applied for the purpose for which the loan were obtained.

x. In our opinion, and according to the information and explanations given to us, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed or reported during the year.

xi. In our opinion, and according to the information and explanations given to us that the managerial remuneration has been paid / provided 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. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company.

xiii. In our opinion, and according to the information and explanations given to us during the course of audit, transactions with the related parties are in compliance with section 177 and section 188 of the Act and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the books of account, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit and hence not commented upon.

xv. In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

We have audited the internal financial controls over financial reporting of the Company as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act as referred to in paragraph 2(f) of ''Report on Other Legal and Regulatory Requirements'' section

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". 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 Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit.

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone 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:

a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone 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

c) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016, 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 S. S. KOTHARI MEHTA & Co.

Chartered Accountants

Firm''s Registration No. 000756N

Sunil Wahal

Partner

Membership No. 087294

Place: New Delhi

Date: 23rd May, 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of Dalmia Bharat Sugar and Industries Limited ("the Company") which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss, 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 Standalone Financial Statements

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of the 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 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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, 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 the Companies (Auditor's Report) Order, 2015 ('the Order') issued by the Central Government of India in terms of Sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, 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 accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of 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 best of our information and accordingly to explanations given to us:

i) The Company has disclosed the impact of pending litigation on its financial position in its financial statements as referred to in Note 30 to the financial statements;

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

iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 of 'Report on Other Legal and Regulatory Requirements' of the Independent Auditors' Report of even date to the members of Dalmia Bharat Sugar and Industries Limited on its financial statements as of and for the year ended March 31, 2015

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

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

(ii)(a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties which have been verified with reference to correspondence of third parties. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, clauses 3(iii) (a) & (b) of the Order are not applicable.

(iv) 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 carried out in accordance with the generally accepted auditing practices in India, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposits in terms of the provision of section 73 to 76 of the Act and/or as per directives issued by the Reserve Bank of India or any other relevant provisions of the Act and the Rules framed there under.

(vi) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Rules made by the Central Government under section 148(1) of the Act, and are of the opinion that, prima facie,the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such records.

(vii)(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Value added tax, Cess and other material statutory dues, as applicable, during the year with the appropriate authorities.

There are no such dues outstanding at the year end for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the details of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty, Value added tax and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as follows :

Name of the Statue Period to which the Nature of Dues amount relates

Central Excise Act, 2014-15 Cenvat Credit on Cement 1944 & Steel

Central Excise Act, June 2005 to Cenvat Credit on Cement 1944 September 2005 & Steel

Central Excise Act, September 2013 to Cenvat Credit on Cement 1944 July 2014 & Steel

Central Excise Act, March 2006 to March Cenvat Credit on Cement 1944 2014 & Steel

Central Excise Act, September 2007 to Cenvat Credit on Cement 1944 March 2011 & Steel

Central Excise Act, March 2006 to March Cenvat Credit on Cement 1944 2007 & Steel

Central Excise Act, April 2011 to Cenvat Credit on Cement 1944 September 2012 & Steel

Central Excise Act, February 2007 to Demand of duty on Bagass 1944 June 2010 & electricity sale

Central Excise Act, July 2002 to March Demand of duty on Bagass 1944 2003 & electricity sale

Central Excise Act, April 2010 to June Demand of duty on Bagass 1944 2010 & electricity sale

Central Excise Act, July 2013 to March Demand of duty on 1944 2013 Molasses

Central Excise Act, 2014-15 Demand of duty on 1944 Multilayer Ceramic Chip capacitors

Central Excise Act, 2008-09 Demand of duty on 1944 Multilayer Ceramic Chip capacitors

Central Excise Act, 2006-07 to till date Demand of duty on 1944 Multilayer Ceramic Chip capacitors

Central Excise Act, July 2007 to March Demand on Storage Loss 1944 2010 of finished goods

Central Excise Act, April 2007 to Demand on Storage Loss 1944 November 2008 of finished goods

Central Excise Act, 2009-10 Demand on Storage Loss 1944 of finished goods

Central Excise Act, March 2006 to Disallowance of Cenvat 1944 August 2013 Credit

Central Excise Act, September 2004 to Disallowance of Cenvat 1944 March 2011 Credit

Central Excise Act, April 2010 to Disallowance of Cenvat 1944 December 2014 Credit

Central Excise Act, April 2010 to Disallowance of Cenvat 1944 September 2012 Credit

Central Excise Act, April 2010 to July Disallowance of Cenvat 1944 2014

Central Excise Act, 2008-09, 2009-10 Loss on Reprocessing of 1944 Finished Goods

Central Excise Act, 2002-03, 2003-04 Loss on Reprocessing of 1944 Finished Goods

Central Sale Tax 2007-08, 2008-09, Entry Tax 2010-11 & 2011-12

Central Sale Tax 2006-07 & 2007-08 Entry Tax

Central Sale Tax 2011-12 Entry Tax

Central Sale Tax 2001-02 Entry Tax

Central Sale Tax 2013-14 Entry Tax

Central Sale Tax 2013-14 Entry Tax

Central Sale Tax 2009-10 Entry Tax

Central Sale Tax 2006-07 Entry Tax

Central Sale Tax 2001-02, 2005-06 Purchase tax

Central Sale Tax 2009-10 VAT assessment

Finance Act, 1994 2008 to 2015 Service tax demand on incentive & Commission

Finance Act, 1994 2014-15 Service tax demand on incentive

Finance Act, 1994 2014-15 Service tax demand on tickets Cancelled

Finance Act, 1994 2008 to 2013 Service tax demand on tickets Cancelled

Finance Act, 1994 December 2008 to Service tax demand on August 2013 commission

Finance Act, 1994 September 2013 to Disallowance of Service March 2015 tax credit

Finance Act, 1994 2006 to 2014 Disallowance of Service tax credit

Finance Act, 1994 2006 to 2010 Disallowance of Service tax credit

Finance Act, 1994 2006 to 2014 Disallowance of Service tax credit

Finance Act, 1994 2008 to 2013 Disallowance of Service tax credit

Finance Act, 1994 2003 to 2010 Service tax demand on commission

Finance Act, 1994 April 2011 to Service tax demand on December 2011 commission

Central Sale Tax 2007-08 VAT assessment

Income Tax Act, 1961 2010-11 TDS related matter

Name of the Statue Forum Where dispute is pending Amount (in Crores)

Central Excise Act, Addl. Commissioner LTU, New Delhi 0.20 1944

Central Excise Act, Allahabad High Court 0.04 1944

Central Excise Act, Asst. Commissioner, LTU, New Delhi 0.07 1944

Central Excise Act, CESTAT, New Delhi 6.28 1944 2014

Central Excise Act, Commissioner (A) LTU, New Delhi 0.42 1944

Central Excise Act, Dy. Commissioner LTU, New Delhi 0.06 1944

Central Excise Act, Dy. Commissioner LTU, New Delhi 0.09 1944

Central Excise Act, CESTAT, New Delhi 16.37 1944

Central Excise Act, CESTAT, New Delhi 0.19 1944

Central Excise Act, Dy. Commissioner LTU, New Delhi 0.05 1944

Central Excise Act, CESTAT, New Delhi 8.33 1944

Central Excise Act, Addl. Commissioner LTU, New Delhi 0.02 1944

Central Excise Act, Asst Commissioner,Bangalore 0.01 1944

Central Excise Act, CESTAT, Bangalore. 0.04 1944

Central Excise Act, CESTAT, New Delhi 0.06 1944

Central Excise Act, Commissioner (A) LTU,New Delhi 0.13 1944

Central Excise Act, Dy. Commissioner LTU, New Delhi 0.07 1944

Central Excise Act, CESTAT, Delhi 0.42 1944

Central Excise Act, Commissioner (A) LTU, New Delhi 0.32 1944

Central Excise Act, Commissioner, LTU, New Delhi 34.78 1944

Central Excise Act, Dy. Commissioner LTU, New Delhi 0.38 1944

Central Excise Act, Suptd, LTU New Delhi 0.06 1944

Central Excise Act, Allahabad High Court 0.03 1944

Central Excise Act, CESTAT, Delhi 0.02 1944

Central Sale Tax Add. Comm (Appeal), Sitapur 0.68

Central Sale Tax Dy. Comm (Assessment)-II,Sitapur 0.34

Central Sale Tax Dy. Commissioner, Lucknow 0.02

Central Sale Tax Allahabad High Court 0.03

Central Sale Tax Joint Commissioner, Bareil 0.02

Central Sale Tax Joint Commissioner, Muradabad 0.01

Central Sale Tax Dy. Comm (Assessment)-II Sitapur 1.51

Central Sale Tax Add. Commissioner (Appeal) - Sitapur 0.20

Central Sale Tax Joint Commissioner(Sale Tax) Kolhapur 0.26

Central Sale Tax Dy. Comm(Assessment)-II Sitapur 0.01

Finance Act, 1994 Addl. Commissioner LTU, New Delhi 0.38

Finance Act, 1994 Asst. Commissioner LTU Delhi 0.05

Finance Act, 1994 Addl. Commissioner LTU, New Delhi 0.11

Finance Act, 1994 Dy. Commissioner LTU, New Delhi 0.13

Finance Act, 1994 Dy. Commissioner LTU,New Delhi 0.14

Finance Act, 1994 Asst. Commissioner, LTU New Delhi 0.19

Finance Act, 1994 CESTAT, New Delhi 1.48

Finance Act, 1994 Commissioner (A) LTU, New Delhi 0.09

Finance Act, 1994 Dy. Commissioner LTU, 0.65

Finance Act, 1994 Suptd, LTU, New Delhi 0.13

Finance Act, 1994 CESTAT, New Delhi 0.05

Finance Act, 1994 Suptd, LTU, New Delhi 0.02

Central Sale Tax Dy. Comm (Assessment)-II Sitapur 0.39

Income Tax Act, 1961 CIT - Bareilly, U.P 0.01

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder has been transferred to such fund within time.

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

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, where such end use has been stipulated by the lender(s).

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & Co. Chartered Accountants FRN - 000756N

ARUN K. TULSIAN Partner Membership No. 89907

Date: May 14, 2015 Place: New Delhi


Mar 31, 2014

We have audited the accompanying Financial Statements of Dalmia Bharat Sugar and Industries Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and Notes to Financial Statements comprising of a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Afairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the efectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and 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 sufcient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) In case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

c) In case of 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 (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub – section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Proft 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 sub- section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 ; and

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

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

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

(c) Fixed assets disposed of during the year were not substantial.

(ii) (a) The management has conducted physical verifcation of inventory at reasonable intervals during the year, except stocks lying with third parties which have been verified with reference to correspondence of third parties. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verifcation of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (iii) (b), (c) & (d) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year is Rs. 95.50 Crores and the year end balance of such loan is Rs. 50 Crores.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(d) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interest have been regular. There are no overdue amounts at the year-end as the loan is repayable on demand.

(iv) 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 fxed assets and for the sale of goods and services. During the course of our audit carried out in accordance with the generally accepted auditing practices in India, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

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

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A and 58AA or any other relevant provisions of the Act including the Companies (Acceptance of Deposits) Rules, 1975.

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

(viii) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Rules made by the Central Government under section 209(1)(d) of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such records.

(ix) (a) Undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess have generally been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Wealth- tax, Service-tax, Sales-tax, Customs Duty, Excise Duty, Cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty and Cess on account of any dispute and the forum where the dispute is pending, are as follows:

Name of the Statute Period to which the Nature of Dues amount relates

Central Excise Act, 1944 June 2005 to Cenvat Credit on Cement September 2005 & Steel

Central Excise Act, 1944 2009-10 Loss on Reprocessing of Finished Goods Central Excise Act, 1944 2003-04 Loss on Reprocessing of Finished Goods

Central Excise Act, 1944 2006-07 to Till Date Demand of duty on Multilayer Ceramic Chip capacitors

Central Excise Act, 1944 2006 to Till Date Cenvat Credit on Cement & Steel Central Excise Act, 1944 2006 to Till Date Cenvat Credit on Cement & Steel Central Excise Act, 1944 July 2002 to June 2010 Demand of duty on Bagass & electricity sale

Central Excise Act, 1944 April 2010 to June 2010 Demand of duty on Bagass& electricity sale Central Excise Act, 1944 September 2004 to Demand of duty on March 13 Molasses

Central Excise Act, 1944 July 2007, to Demand on Storage Loss March 2010 of finished goods

Central Excise Act, 1944 April 2007 to Demand on Storage Loss November 2008 of finished goods

Central Excise Act, 1944 2009-10 Demand on Storage Loss of fnished goods Central Excise Act, 1944 March 2006 to Disallowance of Cenvat March 2013 Credit

Central Excise Act, 1944 April 2010 to Disallowance of Cenvat September 2012 Credit

Central Excise Act, 1944 April 2011 to Disallowance of Cenvat September 2012 Credit

Central Sales Tax 2007-08 and 2009-10 Sales tax Assessment

Central Sales Tax 2007-2012 Entry Tax

Central Sales Tax 2006-07, 2007-08 Entry Tax

Central Sales Tax 2001-02 Entry Tax

Central Sales Tax 2011-12 to 2013-14 Entry Tax

Central Sales Tax 2001-02 & 2005-06 Purchase Tax

Central Sales Tax 2013-14 Entry tax

Central Sales Tax 2013-14 Entry tax

Finance Act, 1994 2013-14 Disallowance of Service tax credit Finance Act, 1994 October 2004 to Disallowance of Service March 2011 tax credit



Name of the Statute Forum Where Amount dispute is pending. (in Crores)

Central Excise Act, 1944 Allahabad High Court 0.04

Central Excise Act, 1944 Allahabad High Court 0.03

Central Excise Act, 1944 CESTAT, Delhi 0.02

Central Excise Act, 1944 CESTAT, Bangalore 0.05

Central Excise Act, 1944 CESTAT, Delhi 6.28

Central Excise Act, 1944 Commissioner (A) LTU, 0.57 New Delhi

Central Excise Act, 1944 CESTAT, Delhi 16.75

Central Excise Act, 1944 Dy. Commissioner LTU, 0.05 New Delhi

Central Excise Act, 1944 Commissioner (A) LTU, 19.34 New Delhi

Central Excise Act, 1944 CESTAT, Delhi 0.06

Central Excise Act, 1944 Commissioner (A) LTU, 0.13 New Delhi

Central Excise Act, 1944 Dy. Commissioner LTU, 0.07 New Delhi

Central Excise Act, 1944 CESTAT, Delhi 0.42

Central Excise Act, 1944 Dy. Commissioner LTU, 0.38 New Delhi

Central Excise Act, 1944 Suptd, LTU New Delhi 0.05

Central Sales Tax Dy. Commissioner 1.92 (Assessment)-II Sitapur

Central Sales Tax Add. Commissioner 0.73 (Appeal) Sitapur

Central Sales Tax Dy. Commissioner 1.85 (Assessment)-II Sitapur

Central Sales Tax Allahabad High Court 0.03

Central Sales Tax Dy. Commissioner 0.02 Lucknow

Central Sales Tax Joint Commissioner 0.26 (Sale Tax) Kolhapur

Central Sales Tax Joint Commissioner, 0.02 Bareily

Central Sales Tax Joint Commissioner, 0.01 Muradabad

Finance Act, 1994 CESTAT, Delhi 0.13

Finance Act, 1994 CESTAT, Delhi 1.39

Name of the Statute Period to which the Nature of Dues amount relates

Finance Act, 1994 2008 to 2013 Demand on Services Received

Finance Act, 1994 2006 to 2010 Disallowance of Service tax credit Finance Act, 1994 March 06 to Disallowance of Service September 2011 tax credit

Finance Act, 1994 2008 to 2013 Demand on Services Received

Finance Act, 1994 April 2010 to Disallowance of Service March 2012 tax credit

Finance Act, 1994 November 2010 to Demand on Services December 2011 Received

Income Tax Act, 1961 2006-07 and 2009-10 Income tax

Income Tax Act, 1961 2011-12 Income tax

Income Tax Act, 1961 2010-11 TDS

UP VAT Act 2007-08, 2009-10 UP VAT



Name of the Statute Forum Where Amount dispute is pending. (in Crores)

Finance Act, 1994 Addl. Commissioner 0.36 LTU, New Delhi

Finance Act, 1994 Commissioner (A) 0.09 LTU, New Delhi

Finance Act, 1994 Dy. Commissioner 0.60 LTU, New Delhi

Finance Act, 1994 Dy. Commissioner 0.27 LTU, New Delhi

Finance Act, 1994 Suptd, LTU New Delhi 0.13

Finance Act, 1994 Suptd, LTU New Delhi 0.02

Income Tax Act, 1961 CIT(A)- LTU New Delhi 20.79

Income Tax Act, 1961 Dy. Commissioner Income 2.40 Tax LTU New Delhi

Income Tax Act, 1961 CIT – Bareilly, U.P. 0.01

UP VAT Act Dy. Commissioner 0.39 (Assessment)-II Sitapur

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

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

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

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or fnancial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, where such end use has been stipulated by the lender(s).

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

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

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the Company has not raised any money by way of public issue.

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

For S. S. Kothari Mehta & Co. Chartered Accountants FRN – 000756N

Arun K. Tulsian

Partner

Membership No. 89907

Date : May 16, 2014 Place: New Delhi


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of Dalmia Bharat Sugar and Industries Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and Notes to Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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 controls 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 reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In case of Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

c) In case of 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 (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub – section (4A) of section 227 of the Companies Act 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) As required by section 227(3) of the Companies Act 1956, 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 sub-section (3C) of section 211 of the Companies Act 1956; and

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 clause (g) of sub- section (1) of section 274 of the Companies Act 1956.

Re: Dalmia Bharat Sugar and Industries Limited

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

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

(c) Fixed assets disposed off during the year were not substantial.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties which have been verified with reference to correspondence of third parties. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b), (c) & (d) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year is Rs.68 crore and the year end balance of such loan is Rs.45 crore.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(d) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interest have been regular. There are no overdue amounts at the year-end as the loan is repayable on demand.

(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 carried out in accordance with the generally accepted auditing practices in India, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

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

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.

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

(viii) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Rules made by the Central Government under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such records.

(ix) (a) Undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess have generally been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Wealth-tax, Service-tax, Sales-tax, Customs Duty, Excise Duty, Cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty and Cess on account of any dispute and the forum where the dispute is pending, are as follows:

Name of the Statue Period to which the Nature of Dues amount relates

Central Excise Act, 1944 Year 2002-03 & 2003-04 Loss on Reprocessing

Central Excise Act, 1944 2006-07 to till date Demand on duty on Multilayer Ceramic Chip capacitors

Central Excise Act, 1944 2009-10 Demand on Storage Loss of finished goods

Central Excise Act, 1944 April 10 to June 12 Disallowance of Cenvat

Credit Central Excise Act, 1944 April 10 to September 12 Disallowance of Cenvat

Credit Central Excise Act, 1944 April 10 to September 12 Disallowance of Cenvat

Credit Central Excise Act, 1944 April 10 to June 10 Demand on duty on Bagasse & electricity

sale Central Excise Act, 1944 April 2007 to Demand on Storage November 2008 Loss of finished goods

Central Excise Act, 1944 July 2002 to June 2010 Demand on duty on Bagasse & electricity

sale Central Excise Act, 1944 July 2007 to March 2010 Demand on Storage Loss of finished goods

Central Excise Act, 1944 June 2005 to Cenvat Credit on September 2005 Cement & Steel

Central Excise Act, 1944 March 2006 to Cenvat Credit on March 2010 Cement & Steel

Central Excise Act, 1944 March 2006 to Cenvat Credit on Sept. 2012 Cement & Steel

Central Excise Act, 1944 March 2006 to Disallowance of Cenvat March 2010 Credit

Central Excise Act, 1944 September 2004 to Disallowance of Cenvat March 2011 Credit

Central Excise Act, 1944 September 2007 to Cenvat Credit on March 2011 Cement & Steel

Central Sales Tax 2001-02 Entry Tax

Central Sales Tax 2006-07 Entry Tax

Central Sales Tax 2007-08 Sales Tax Assessment

Central Sales Tax 2007-08 Entry Tax

Central Sales Tax 2007-2012 Entry Tax

NAME Forum Where (Rs. Crore) dispute is pending.

Central Excise Act, 1944 CESTAT, New Delhi 0.02

Central Excise Act, 1944 CESTAT, Bangalore 0.04

Central Excise Act, 1944 Dy. Commissioner 0.07 LTU, New Delhi

Central Excise Act, 1944 Commissioner, LTU, 13.24 New Delhi

Central Excise Act, 1944 Dy. Commissioner 0.38 LTU, New Delhi

Central Excise Act, 1944 Suptd, LTU New 0.05 Delhi

Central Excise Act, 1944 Dy. Commissioner 0.05 LTU, New Delhi

Central Excise Act, 1944 Commissioner (A) 0.13 LTU, New Delhi

Central Excise Act, 1944 CESTAT, New Delhi 29.30

Central Excise Act, 1944 CESTAT, New Delhi 0.05

Central Excise Act, 1944 Allahabad High Court 0.04

Central Excise Act, 1944 CESTAT, New Delhi 5.86

Central Excise Act, 1944 Dy. Commissioner 0.15 LTU, New Delhi

Central Excise Act, 1944 CESTAT, New Delhi 0.26

Central Excise Act, 1944 Commissioner (A) 0.32 LTU, New Delhi

Central Excise Act, 1944 Commissioner (A) 0.42 LTU, New Delhi

Central Excise Act, 1944 Allahabad High Court 0.03

Central Excise Act, 1944 Dy. Comm 0.06 (Assessment)-II Sitapur, U.P.

Central Excise Act, 1944 Dy. Commissioner 1.13 (Assessment)-II Sitapur, U.P.

Central Excise Act, 1944 Dy.Commissioner 0.28 (Assessment)- II Sitapur, U.P.

Central Excise Act, 1944 Add. Commissioner 0.53 (Appeal) Sitapur, U.P.

Name of the Statue Period to which the Nature of Dues amount relates

Central Sales Tax 2011-13 Entry Tax

Central Sales Tax 2001-02 & 2005-06 Purchase Tax

Finance Act, 1994 April 2010 to Disallowance of March 2012 Service tax credit

Finance Act, 1994 June 05 to March 10 Disallowance of Service tax credit

Finance Act, 1994 March 03 to Oct. 10 Demand of service tax on commission

Finance Act, 1994 March 2006 to Disallowance of September 12 Service tax credit

Finance Act, 1994 Nov.''10 to Dec.''11 Demand of service tax on commission

Finance Act, 1994 October 04 to Disallowance of March 2011 Service tax credit

Finance Act, 1994 October 06 to Demand of service September 2011 tax on commission

UP VAT 2007-08 UP VAT

Income tax Act, 1961 2005-06 to 2010-11 Income tax

Income tax Act, 1961 2005-06 to 2010-11 TDS Related Matter

NAME Forum Where dispute is (Rs. Crore) pending.

Central Sales Tax Dy. Commissioner Lucknow 0.02

Central Sales Tax Joint Commissioner (Sale Tax) 0.26 Kolhapur

Finance Act, 1994 Suptd, LTU New Delhi 0.13

Finance Act, 1994 Commissioner (A) LTU, New 0.09 Delhi

Finance Act, 1994 CESTAT, New Delhi 0.05

Finance Act, 1994 Dy. Commissioner LTU, New 0.60 Delhi

Finance Act, 1994 Suptd, LTU New Delhi 0.02

Finance Act, 1994 CESTAT, New Delhi 1.34

Finance Act, 1994 Dy. Commissioner LTU, New 0.11 Delhi

Finance Act, 1994 Dy. Comm (Assessment)-II 0.39 Sitapur, U.P.

Finance Act, 1994 CIT(A)- LTU New Delhi 33.19

Finance Act, 1994 CIT – Bareilly, U.P. 0.01

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holder

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

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

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, where such end use has been stipulated by the lender(s).

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

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

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the Company has not raised any money by way of public issue.

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

For S. S. Kothari Mehta & Co.

Chartered Accountants

FRN – 000756N

Arun K.Tulsian

Date: May 27, 2013 Partner

Place: New Delhi Membership No. 89907


Mar 31, 2012

1. We have audited the attached Balance Sheet of Dalmia Bharat Sugar and Industries Limited (the Company') as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure 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 above, we report that:

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

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

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

iv. 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;

v. On the basis of the 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 disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

a) in the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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

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

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

Re: Dalmia Bharat Sugar and Industries Limited

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

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

(c) Fixed assets disposed off during the year were not substantial.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties and in transit which have been verified with reference to correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b), (c) &

(d) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from two companies covered in the register maintained under section 301 of the Companies Act, 1956, loan from the one of the companies having been squared off during the year. The maximum amount outstanding during the year is Rs206 Crore and the year end balance of such loan is Rs50 Crore.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(d) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interest have been regular. There are no overdue amounts at the year-end as the loan is repayable on demand.

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

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

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.

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

(viii) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Rules made by the Central Government under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such records.

(ix) (a) Undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess have generally been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Wealth-tax, Service-tax, Sales-tax, Customs Duty, Excise Duty, Cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty and Cess on account of any dispute and forum where the dispute is pending, are as follows:

Name of the statute Nature of the Dues Amount (in Period to which the Forum Where dispute Crore) amount relates is pending

Central Excise Act, Cenvat Credit on Cement & 60.89 Jun 05 to Mar 10 CESTAT, Delhi 1944 Steel

Central Excise Act, Cenvat Credit on Cement & 4.46 Sep 07 to Mar 11 Commissioner (A) LTU, 1944 Steel New Delhi

Central Excise Act, Cenvat Credit on Cement & 2.17 Mar 06 to Dec 11 Dy.Commissioner LTU, 1944 Steel New Delhi

Central Excise Act, Demand on duty on Bagasse 291.12 Oct 07 to Mar 10 CESTAT, Delhi 1944 & electricity sale

Central Excise Act, Demand on duty on Bagasse 0.09 Mar 06 to Mar 10 Commissioner (A) LTU, 1944 & electricity sale New Delhi

Central Excise Act, Demand on duty on Bagasse 0.53 Mar 06 to Dec 11 Dy.Commissioner LTU, 1944 & electricity sale New Delhi

Central Excise Act, Demand on duty on Bagasse 0.13 Apr 10 to Dec 11 Superintendent, LTU 1944 & electricity sale New Delhi

Central Excise Act, Disallowance of Cenvat 0.69 2006-07 CESTAT, Delhi 1944 Credit

Central Excise Act, Disallowance of Cenvat 30.55 Apr 10 to May 11 Commissioner LTU, 1944 Credit New Delhi

Central Excise Act, Disallowance of Cenvat 4.16 2002-03 to 2010-11 Commissioner (A) LTU, 1944 Credit New Delhi

Central Excise Act, Disallowance of Cenvat 1.18 2009-10 to 2011-12 Dy.Commissioner LTU, 1944 Credit New Delhi

Central Excise Act, Disallowance of Cenvat 0.01 2010-11 Superintendent, LTU 1944 Credit New Delhi

Central Excise Act, Disallowance of Cenvat 0.02 2004 Allahabad High Court 1944 Credit

Finance Act, 1994 Disallowance of Service tax 5.89 Jun 06 to Mar 10 Ad.Commissioner LTU, credit New Delhi

Finance Act, 1994 Disallowance of Service tax 9.70 2003-04 to 2011-12 Commissioner (A) LTU, credit New Delhi

Finance Act, 1994 Disallowance of Service tax 4.63 2006-07 to 2011-12 Dy.Commissioner LTU, credit New Delhi

Finance Act, 1994 Disallowance of Service tax 0.33 2010-11 to 2011-12 Superintendent, LTU credit New Delhi

UP VAT VAT on interunit transfer 0.39 2005-06 to 2010-11 Dy Commissioner Sitapur

Central Sales Tax Entry Tax on sugar & 3.81 2005-06 to 2010-11 Dy Commissioner Molasses Sitapur

Central Sales Tax Entry Tax on sugar 0.03 2001-02 Allahabad High Court, Lucknow Bench

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

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

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

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, where such end use has been stipulated by the lender(s).

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

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

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the Company has not raised any money by way of public issue.

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

For S. S. Kothari Mehta & Co.

Chartered Accountants Firm Registration No. 000756N

Arun K. Tulsian

Place : New Delhi Partner

Date : May 11, 2012 Membership No. 89907


Mar 31, 2011

1. We have audited the attached Balance Sheet of Dalmia Bharat Sugar and Industries Limited (formerly known as Dalmia Cement (Bharat) Limited) ('the Company') as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure 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 above, we report that:

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

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

iii. In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

iv. The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report are in agreement with the books of account;

v. On the basis of the 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 disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

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

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

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

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

Re: Dalmia Bharat Sugar and Industries Limited (formerly known as Dalmia Cement (Bharat) Limited)

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

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

(c) Fixed assets (and other assets and liabilities) relating to demerged undertakings comprising of Cement business, Thermal Power business and Refractory business have been transferred to the resulting companies pursuant to the Scheme of Arrangement (refer note no. 19 of schedule 20). This has not affected the going concern assumption.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties and in transit which have been verified with reference to correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b), (c) & (d) of the order, are not applicable to the company.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs 1017.50 million and the year end balance of such loan is Rs 250 million. Further, the company had, in earlier years, taken secured loans in the form of fixed deposits from four persons including directors and their relatives covered in the register maintained under section 301 of the companies Act, 1956. However, these loans have been transferred pursuant to the scheme of arrangement(refer note no. 19 of schedule 20). There are no such loans outstanding at the close of the year.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(d) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interest have been regular. There are no overdue amounts at the year end as the loan is repayable on demand.

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

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

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Regarding the deposits accepted in earlier years, the same have transferred pursuant to the Scheme of Arrangement (Refer note no. 19 of schedule 20).

(vii) In our opinion, the Company has an internal audit system commensurate with the 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 Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such books.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited during the year with the appropriate authorities.

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

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

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statute Nature of 'the Dues Amount (in Millions)

Central Excise Act, 1944 Disallowance of Cenvat 1.0 Credit

Central Excise Act, 1944 Disallowance of Cenvat 13.81 Credit

Central Excise Act, 1944 Demand on duty on 27.8 Bagass & electricity sale

Central Excise Act,1944 Demand on duty on 121.8 Bagass & electricity sale

Central Excise Act, 1944 Disallowance of Cenvat 28.5 Credit

Central Excise Act,1944 Disallowance of Cenvat 0.1 Credit

Central Excise Act,1944 Cenvat Credit on 0.2 Cement

Finance Act, 1994 Demand of Service tax 0.1 on installation

Central Excise Act,1944 Demand on duty of 1.3 Distillery Products

Central Excise Act,1944 Cenvat Credit on 1.6 Cement & Steel

Central Excise Act,1944 Cenvat Credit on 0.3 Cement & Steel

Central Sales Tax Sales Tax 19.9



Name of the statute Period to which the Forum where disput amount relates -e is pending

Central Excise Act,1944 April 2006 to March Dy. Commissioner, 2010 Sitapur

Central Excise Act,1944 April 2006 to March Dy. Commissioner, 2010 LTU Delhi

Central Excise Act,1944 Feb. 2007 to March Add. Commissioner, 2010 Lucknow

Central Excise Act,1944 Feb. 2007 to March Dy. Commissioner, 2010 LTD Delhi

Central Excise Act,1944 March 2006, to Nov Commissioner, 2008 Lucknow

Central Excise Act,1944 March 2006, to Feb Asst.Commissioner, 2007 Sitapur

Central Excise Act,1944 April, 2006 Commissioner Appe al,Delhi

Finance Act, 1994 April 2006 to March Asistant Commissi- 2007 oner, Sitapur

Central Excise Act,1944 April 2007 to March Commissioner Appe- 2010 al

Central Excise Act,1944 April 2008 to Nov Commissioner Appe- 2008 al, LTU Delhi

Central Excise Act,1944 March, 2006 Commissioner Appe- al, Lucknow

Central Sales Tax - Dy. Commissioner, Sitapur



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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

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

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

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, where such end use has been stipulated by the lender(s).

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

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

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the company has not raised any money by way of public issue.

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

For S.S. KOTHARI MEHTA & Co. Firm Registration No. 000756N Chartered Accountants (ARUN K. TULSIAN) Partner Membership No. 89907

Place ; New Delhi Date ; May 23, 2011


Mar 31, 2010

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

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

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 and on the basis of such checks as we considered appropriate and according to information and explanation given to us, we enclose in the Annexure 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 above, we report that:

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

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

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

iv. Thebalancesheet,profitandlossaccountandcash flow statement dealt with by this report are in agreement with the books of accounts;

v. On the basis of the 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 disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section274oftheCompaniesAct,1956;

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

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

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

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

Annexure referred to in paragraph 3 of our report of even date Re: Dalmia Cements (Bharat) Limited (the Company)

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

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

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

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties and in transit which have been verified with reference to correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b), (c) & (d) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicabletotheCompany.

(b) The company has taken unsecured loans in the form of fixed deposits from four persons including directors and their relatives covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year end balance of such loans is Rs.236.75 million.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of theCompany.

(d) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interest have been regular.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.

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

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

(vi) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company LawTribunal or Reserve Bankof IndiaoranyCourtorany otherTribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the 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 Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

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

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

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable except Royalty payable on limestone of Rs.. 1.29 million and, Sales tax of Rs.0.39 million, which have since been paid.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

(xiii) In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the

Name of the statute Nature of dues Amount (Rs million)

Central Excise Disallowance of Act, 1944 Cenvat Credit 7.23

Central Excise Disallowance of 48.72 Act, 1944 Cenvat Credit on Capital Goods

Central Excise Disallowance of 1.33 Act, 1944 Cenvat Credit

Central Excise Denial of Cenvat 9.47 Act, 1944 Credit on clinker used in cement supplied ton Spec ial Economic units in zones Central Excise Excise duty on 41.61 Act, 1944 Packing charges

Tamil Nadu Differential tax for 0.77 General sale; non-acceptance of Tax Act, 1959 Form XVII for purchase

Tamil Nadu General sale; Sales tax levied on Packing charges on 1.82 Tax Act, 1959 Cement Sales

Finance Act, Denying Service 1994 Tax Credit on 1.75 Outdoor Catering

Finance Act, Non Payment of 10.09 1994 Service Tax on Consulting Engineering Services and Erections Commissioning & Installation Services

Andhra Pradesh Reversal of VAT credit 0.88 VAT Act availed during construction period Income Tax Act, Income Tax 0.01 1961

Coal Mines Cess charges 1.28 (Conservation & Development) Act, 1974 Central Excise Act, 1944 Cenvat Credit on 0.80 Cement



Period to which Forum where dispute Name of the statute the amount relates is pending Central Excise October 01 to April 02 CESTAT, Southern Act, 1944 Region

Central Excise September 04 to GESTAT, Southern Act, 1944 February 06 Region Bench

Central Excise April 07 to March 08 Commissioner Act, 1944 (Appeals) Central Excise

Central Excise July 06 to October 07 Commissioner Act, 1944 (Appeals) /CESTAT Central Excise

Central Excise November 07 to July 09 Commissioner of Act, 1944 Excise and Service Tax, Central New Delhi

Tamil Nadu 1997-98,1998-99 STAT, Madurai General sale; & 1999-00 Tax Act, 1959

Tamil Nadu 1983-84 Hight Court, Madras General sale; Tax Act, 1959

Finance Act, April 06 to July 09 CESTAT 1944 2006 CESTAT

Andhra Pradesh May 07 to May 08 Sales tax Appellate VAT Act Tribunal

Income Tax Act, Assessment Year Commissioner of I 1966 2006-07 ncome Tax (Appeal), New Delhi

Coal Mines April 2005 Dy. Commissioner, (Conservation & Customs Development) Act, 1974

Central Excise March 06 to July 06 CESTAT, New Delhi Act, 1944

provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are notapplicabletotheCompany.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

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

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

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

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the company has not raised any money by public issue.

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

For S.R. Batliboi & Co. For S.S. Kothari Mehta & Co. Firm registration number: Firm registration number: 301003E 000756N Chartered Accountants Chartered Accountants

per Manoj Gupta per Arun K.Tulsian Partner Partner Membership No.:83906 Membership No.:89907 Place :Gurgaon Place: New Delhi Date : May 26, 2010 Date : May 26, 2010

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