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Auditor Report of Deccan Cements Ltd.

Mar 31, 2023

Deccan Cements Limited Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Deccan Cements Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit Matter	Auditor''s Response
1.	Revenue Recognition - Price Discounts â¢ Revenue is measured net of discounts earned by customers on the Company''s sales. â¢ Due to the Company''s presence across different marketing regions within the country and the competitive business environment, price discounts vary based on the customer and market it caters to and recognised based on sales made during the year. These discounts are calculated based on the market study reports which reports are collated periodically by the management and are prone to manual interventions. â¢ Therefore, there is a risk of revenue being misstated as a result of incorrect computation of price discounts. â¢ Given the complexity involved in the assessment of price discounts and their periodic recognition against sales, the same is considered as key audit matter. Refer Note - 2(d)(i) of Significant Accounting Policies	Principal Audit Procedures â¢ Assessed the appropriateness of the Company''s accounting policies relating to price discounts by comparing with applicable accounting standards. â¢ Assessed the design and tested the implementation and operating effectiveness of Company''s internal controls over the approvals, calculation, accounting and issuance of credit notes. â¢ Obtained and inspected, on a sample basis, supporting documentation for price discounts recorded and credit notes issued during the year as well as credit notes issued after the year end date to determine whether these were recorded appropriately. â¢ Compared the historical trend of price discounts to sales made to determine the appropriateness of current year''s discount charge.
2.	The Company has material litigations which involve significant judgement to determine the possible outcome of these litigations. Refer Note 32 of the financial statements.	Principal Audit Procedures Obtained details of litigations for the year ended March 31, 2023 from management. We have relied upon our internal experts to challenge the management''s underlying assumptions in estimating the possible outcome of the disputes. Our internal team also considered the status of the disputes, legal precedence and other rulings in evaluating management''s position on these matters. We have also relied on assurances and opinions provided by the various agencies, representing the company.
3.	Inventories as disclosed in Note 6 to the financial statements includes: â¢ Raw materials comprising iron-ore, gypsum, limestone, laterite and fly ash; â¢ Work-in-progress mainly comprising clinker â¢ Coal The above items of inventory are stored in sheds, stockpiles and silos. As the weighing of these inventories is not practicable, management assesses the reasonableness of the quantities on hand by obtaining measurements of stockpiles and converting these measurements to unit of volumes by using angle of repose and bulk density. The Company involves its team in the inventory count process. Due to the significance of inventory balances and related estimations involved, this is considered as a key audit matter.	Principal Audit Procedures The Company performs annual inventory counts at the year end and issues prior notification of procedures to be performed for such inventory counts. Our audit procedures to assess the existence of such items of inventory included the following: â¢ Assessed the management''s process of measurement of stockpiles and the determination of values using conversion of volumes and density to total weight and the related yield. â¢ Obtained and reviewed the inventory count report of the management''s team and assessed its accuracy on a sample basis.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Directors Report but does not include the financial statements and our auditor''s report thereon. The Directors Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Directors report if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with Governance.

Management''s Responsibility for the Financial Statements

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

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process. Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not

be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, we report that:

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 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 with reference to the financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provision of section 197 of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements (Refer Note 32 of the financial statements);

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

iii. There is no delay in transferring the amounts which were required to be transferred to the Investor

Education and Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds

(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that

the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. As stated in Note 37(B) to the financial statements,

(a) the dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.

(b) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of divided proposed is in accordance with section 123 of the Act, as applicable.

vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the company

only w.e.f. April 1, 2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules,

2014 is not applicable for the financial year ended March 31, 2023.

2. As required by the Companies (Auditor''s Report) Order, 2020, (''the Order'') issued by the Central Government in terms of Section 143 (11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

For M. Anandam & Co.,

Chartered Accountants

(Firm''s Registration No. 000125S)

Sd/-

M.V.Ranganath

Partner

Membership No. 028031

UDIN: 23028031BGVWJS2537

Place: Hyderabad

Date: 27-05-2023

Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

The Members of Deccan Cements Limited

Report on the Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying Ind AS financial statements of Deccan Cements Limited("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement, Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Ind AS 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 and presentation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

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

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended 31st March, 2017 and 31st March, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated 19th May, 2017 and 20th May, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition date to Ind AS have been audited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder.

(e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the board of directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as director in terms of section 164(2) of the Act.

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

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

i) The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 28

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

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

2. As required by the Companies (Auditor''s Report) Order, 2016 ("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 B", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

	For M. Anandam & Co.,
	Chartered Accountants
	(Firm''s Registration No. 000125S)
	M.V.Ranganath
Place : Hyderabad	Partner
Date : 29.05.2018	Membership No.028031

Annexure -A to the Independent Auditors'' Report

(Referred to in paragraph 1 (f) under "Report on Other Legal and Regulatory Requirements" section of our report of even date)

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

We have audited the internal financial controls over financial reporting of Deccan Cements Limited ("the Company") as of 31st March 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 Ind AS 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

control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) 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 Ind AS 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, to the best of our information and according to the explanations given to us, 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 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	For M. Anandam & Co.
	Chartered Accountants
	(Firm''s Registration No. 000125S)
	M.V. Ranganath
Place : Hyderabad	Partner
Date : 29.05.2018	Membership No.028031

Annexure - B to the Independent Auditors'' Report

(Referred to in paragraph 2 under "Report on Other Legal and Regulatory Requirements" section of our report of even date)

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

(b) As explained to us, the fixed assets have been physically verified by the management in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) The inventories have been physically verified during the year by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.

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

(iv) In our opinion and according to the information and explanations given to us, the Company has made investments which is in compliance with section 186 of the Act. The Company has not granted loans, not provided guarantees and securities.

(v) According to the information and explanations given to us, the Company has not accepted deposits within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder.

(vi) We have broadly reviewed the cost records maintained by the Company as prescribed under sub-section (1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, value added tax, goods and service tax, wealth tax, service tax, customs duty, excise duty, cess and any other statutory dues as applicable with the appropriate authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of income tax, sales tax, value added tax, goods and service tax, wealth tax, service tax, customs duty, excise duty or cess as at 31st March, 2018 which have not been deposited on account of any dispute pending are as under:

Name of the statute	Nature of the dues	Amount (Rs. in lakhs)	Period to which the amount relates	Forum where the dispute is pending
Income-TaxAct, 1961	Income tax	6.46	1997-98	Income tax Appellate Tribunal
Andhra Pradesh General Sales Tax Act/ VAT Act	Sales tax / VAT	11.52	1993-94	Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and for the State of Andhra Pradesh.
		85.68	1999-00 & 2000-01
		51.61	2002-03 to 2004-05
		137.24	2006-07	Deputy Commissioner (Appeals), Hyderabad
AP Electricity Duty Amendment Act,2003	Electricity Duty	316.23	2003-04 to 2008-09	Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and for the State of Andhra Pradesh.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks and government. The Company has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

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

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

(xiii) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable Indian accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence reporting under clause (xiv) of the Order is not applicable.

(xv) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him and hence provisions of section 192 of the Act are not applicable.

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

	For M. Anandam & Co.
	Chartered Accountants
	(Firm''s Registration No. 000125S)
	M.V. Ranganath
Place : Hyderabad	Partner
Date : 29.05.2018	Membership No.028031

Mar 31, 2017

Report on the Financial Statements

We have audited the accompanying financial statements of Deccan Cements Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe financial statementsâ).

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

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

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ, 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 purpose of our audit;

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

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

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

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

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and

g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditorâs) 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 all pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements;

ii. the Company does not have any long term contracts including derivative contracts for which there are 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 financial statements as to the holdings as well as dealings in Specified Bank Notes during the period from 08^th November 2016 to 30^th December 2016 and these are in accordance with the books of account maintained by the Company. Refer Note 40 to the financial statements.

Annexure A to the Independent Auditorsâ Report

(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the members of Deccan Cements Limited)

(i) In respect of its Fixed Assets:

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

(b) According to the information and explanations given to us, the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of their assets, The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) According to the information and explanations given to us, the title deeds of the immovable properties are held in the name of the company.

(ii) The inventory (excluding stocks with third parties) have been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and accordingly paragraph 3(iii) of the Order are not applicable, at present.

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

(v) In our opinion and according to the information and explanation given to us the Company has complied with the provisions of Section 73 and Section 74 of the Act and the rules framed there under and applicable directives issued by Reserve Bank of India with regard to deposits accepted.

(vi) On the basis of records produced to us, we are of the opinion that prima facie the Cost Records and Accounts prescribed by the Central Government under Section 148(1) of the Act have been maintained. However, we are not required to and have not carried out any detailed examination of such Records and Accounts.

(vii) According to the information and explanations given to us and according to the books and records as produced and examined by us in accordance with the generally accepted auditing practices in India, in respect of statutory dues:

(a) The Company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales-tax, service tax, duty of custom, duty of excise ,value added tax, cess and any other statutory dues applicable to it with the appropriate authorities during the year. There were no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues which were in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, duty of custom, duty of excise or value added tax which have not been deposited as on March 31, 2017 on account of disputes except :

Name of the Statue	Nature of Dues	Assessment year to which the amount relates	Rs.in Lakh	Forum where dispute is pending
Income Tax Act 1961	Disallowance of debenture issue expenses and bad debts.	1997-98	6.46	Income Tax appellate Tribunal, Hyderabad.
Andhra Pradesh General Sales Tax Act/ VAT Act.	Sales Tax on packing material Sales tax demand for the deemed excess production based on energy audit Sales Tax Demand for interest Sales Tax Demand - recovery of excess paid interest.	1993-94 1999-00 & 2000-01 2002-03 to 2004 - 05	11.52 85.68 137.24 51.61	High Court of Andhra Pradesh High Court of Andhra Pradesh Deputy Commissioner (Appeals) Hyderabad High Court of Andhra Pradesh
	Demand on water consumed for generation of power	1997-2008	723.29	High Court of Andhra Pradesh
AP Electricity Duty Amendment Act, 2003	Dispute on duty on electricity generated and consumed	2003-04 to 2008-09	316.23	High Court of Andhra Pradesh
	Demand towards District Mineral Foundation Contribution	12^th January 2015 to 09^th February 2016	391.50	Stay given by Honorable High Court of Andhra Pradesh and Telangana

(viii) According to the information and explanations given to us, the company has not defaulted in repayment of dues to the financial institutions or the banks during the year.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) During the course of our examination of the books and other records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year, nor have we been informed of such case by the management.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, managerial remuneration has been paid or provided during the year in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us and based on our examination of the records, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

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

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

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him during the year.

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

For M. Bhaskara Rao & Co.

Chartered Accountants

Firm Registration No. 000459S

V K Muralidhar

Place : Hyderabad Partner

Date : 19.05.2017 Membership No. 201570

Mar 31, 2016

The Members of Deccan Cements Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Deccan Cements Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe financial statementsâ).

Managementâs Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 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 (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the ''Annexure Aâ, 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 purpose of our audit;

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

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

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

e. On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act.

i. the Company has disclosed the impact of all pending litigations on its financial position in its financial statements - Refer note 29 to the financial statements;

ii. the company does not have any long term contracts including derivative contracts for which there are 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.

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

(i) In respect of its Fixed Assets:

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

(c) According to the information and explanations given to us, the title deeds of the immovable properties are held in the name of the company.

(ii) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and accordingly paragraph3(iii) of the Order is not applicable, at present.

(v) In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Section 73 and Section 74 of the Act and the rules framed there under and applicable directives issued by Reserve Bank of India with regard to deposits accepted.

(a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employee state insurance, income tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues applicable to it with the appropriate authorities during the year.There were no undisputed amounts payable in respect of provident fund, employee state insurance, income tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues which were in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax that have not been deposited on account of any dispute, except :

Name of the Statue	Nature of Dues	Assessment year to which the amount relates	Rs, In Lakhs	Forum where dispute is pending
Income Tax Act 1961	Disallowance of debenture issue expenses and bad debts	1997-98	6.46	Income Tax appellate Tribunal, Hyderabad
Andhra Pradesh General Sales Tax Act / VAT Act	Sales Tax on packing material Sales tax demand for the deemed excess production based on energy audit Sales Tax Demand for interest Sales Tax Demand - recovery of excess paid interest	1993-94 1999-00 & 2000-01 2002-03 to 2004 - 05	11.52 85.68 137.24 51.61	High Court of Andhra Pradesh High Court of Andhra Pradesh Deputy Commissioner (Appeals) Hyderabad High Court of Andhra Pradesh
Central Excise	Dispute on Cenvat availed on MS Angles, MS Plates, MS Sheets, HR Coils	March 2008 to April 2009	412.64	CESTAT, Bangalore

(viii) According to the information and explanations given to us, the company has not defaulted in repayment of dues to the financial institutions, banks or the government during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, managerial remuneration has been paid or provided during the year in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act.

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

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

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

Managementâs 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 (''ICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorsâ 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 âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 31 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 M. Bhaskara Rao & Co.,

Chartered Accountants

Firm Registration No. 000459 S

V K Muralidhar

Partner

Hyderabad Membership No. 201570

May 20, 2016

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and the 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 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 material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and other operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 it's profit and it's cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India, in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 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 purpose of our audit;

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

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

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

e) According to the information and explanations given to us and in our opinion, there are no financial transactions or matters which have any adverse effect on the functioning of the company;

f) On the basis of written representations received from the directors as on March 31,2015, and 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 sub-section (2) of Section 164 of the Act.

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements.

ii. the Company does not have any long-term contracts including derivative contracts for which there are 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.

STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

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

b) The management has conducted physical verification of major fixed assets during the year and as explained to us, no material discrepancies have been noticed on such verification.

ii. a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion, 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) In our opinion and according to the information and explanation given to us and on the basis of our examination of the inventory records, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, the Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore clause 3(iii) of the Order is not applicable.

iv. According to the information and explanations given to us and in our opinion, there are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. In our opinion and according to the information and explanation given to us the Company has complied with the provisions of Section 73 and Section 74 of the Act and the rules framed there under and applicable directives issued by Reserve Bank of India with regard to deposits accepted.

vi. On the basis of records produced to us, we are of the opinion that prima facie the Cost Records and Accounts prescribed by the Central Government under Section 148(1) of the Act have been maintained. However, we are not required to and have not carried out any detailed examination of such Records and Accounts.

vii. a. The Company has been regular in depositing undisputed applicable statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, Investor Education and Protection Fund and other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, Investor Education and Protection Fund and other material statutory dues were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, there are no dues of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues which have not been deposited on account of any dispute except:

Name of the Nature of Dues Assessment year Statue to wh|ch the amount relates

Income Tax Act Disallowance of debenture Issue 1997-98 1961 expenses and bad debts.

Andhra Pradesh Sales Tax on packing material 1993-94 General Sales Tax Act/ VAT Sales tax demand for the deemed 1999-00 Act. excess production based on energy & audit 2000-01

Sales Tax Demand for interest --

Sales Tax Demand - recovery of 2002-03 to 2004 - 05 excess paid interest.

Water Cess Dispute on water rates levied on 1997-98 the quantum of water used in the to generation of power. 2007-08

Electricity Duty Dispute on duty levied by A.P 2003-04 Govt. on electricity generated and to consumed. 2008-09

Central Excise Dispute on Cenvat availed on MS March 2008 to Angles, MS Plates, MS Sheets, April 2009 HR Coils.

A.P.M.M.C. Dispute on Seigniorage Fee to be Rules, 1966 paid on Minor Minerals.

Name of the Statute Rs in Lakh Forum where dispute is pending

Income Tax Act 1961 6.46 Income Tax appellate Tribunal, Hyderabad.

Andra Pradesh General 11.52 High Court of Andhra Pradesh Sales Tax/Act Vat Act

85.68 High Court of Andhra Pradesh

137.24 Deputy Commissioner (Appeals) Hyderabad

51.61 High Court of Andhra Pradesh

Water Cess 723.29 High Court of Andhra Pradesh

Electricity Duty 316.23 High Court of Andhra Pradesh

Central Excise 412.64 CESTAT, Bangalore

A.P.M.M.C. 23.59 Ministry of Mines & Geology, Rules 1966 Telengana

viii. The Company has no accumulated losses as at March 31, 2015. Further it has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

ix. According to the information and explanations given to us and in our opinion, as at March 31, 2015, the company has no dues to financial institutions / banks. The company has not issued any debentures.

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

xi. According to the information and explanations given to us and in our opinion, during the year under report, no term loans were availed.

xii. During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us, no instance of fraud on or by the company was noticed or reported during the year, nor have we been informed of such case by the management.

M Bhaskara Rao & Co Chartered Accountants Firm Registration Number: 000459S

V K Muralidhar Hyderabad, Partner May 30, 2015 Membership Number: 201570

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c) the Balance Sheet, 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 subsection (3C) of section 211 of the Companies Act, 1956;

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 disqualified 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 Companies Act, 1956.

STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

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

b) According to the information and explanations given to us, the Management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us, the Company has not disposed off substantial part of fixed assets and hence, reporting on the going concern status in this regard does not arise.

(ii) a) The inventories has been physically verified during the year by the Management at reasonable intervals. In our opinion, the frequency of the verification is reasonable.

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 nature of its business.

c) In our opinion and according to the information and explanation given to us, and on the basis of our examinations of the inventory records, the Company is maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and (d) of clause (iii) of this Order are not applicable.

e) According to the information and explanations given to us, the Company has taken unsecured deposits from six parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the outstanding balances of said deposits aggregated to Rs. 940 Lakh.

f) The rate of interest and other terms and conditions of unsecured deposits taken by the Company, are not prima facie prejudicial to the interest of the Company; and

g) Payment of the principal amount and interest are regular.

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

(v) (a) In our opinion and, according to the information and explanations given to us, the transactions that need to be entered into the Register maintained u/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of other parties are reasonable.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provision of section 58A, 58AA or any other relevant provision of Companies Act 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

(vii) The internal audit of the Company has been conducted by a firm of Chartered Accountants. The scope and coverage of internal audit commensurate with the size of the Company and nature of its business.

(viii) On the basis of records produced to us, we are of the opinion that, prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956, have been maintained. However, we are not required to and, have not carried out any detailed examinations of such accounts and records.

(ix) a) According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate authorities in India. There are no arrears of statutory dues as at 31st March, 2014 which are outstanding for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there are no dues on accounts of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess as at March 31, 2014 which have not been deposited on account of dispute except the following:

Name of the Nature of Dues Assessment Rs. In Forum Statue year to Lakh where dispute which the is pending amount relates

Income Tax Disallowance of 1997-98 6.46 Income Tax Act 1961 debenture issue appellate expenses and Tribunal, bad debts. Hyderabad.

Andhra Sales Tax on 1993-94 11.52 High Court of A.P. Pradesh packing material

General Sales tax demand 1999-2000 85.68 High Court of A.P. Sales for the deemed & 2000-01 Tax Act/ VAT excess production Act based on energy audit

Sales Tax Demand 137.24 Deputy Commissioner for interest (Appeals) Hyderabad

Sales Tax Demand 51.61 High Court of A.P. for recovery of excess interest paid.

Water Cess Dispute on water 1997-98 723.29 High Court of A.P. rates levied on to the quantum of 2007-08 water used in the generation of power

Electricity Dispute on duty 2003-04 316.23 High Court of A.P. Duty levied by A.P to Govt. on 2008-09 electricity generated and consumed.

Central Dispute on Mar 2008 412.64 CESTAT Excise Cenvat availed to on MS Angles, April 2009 MS Plates, MS Sheets, HR Coils.

A.P.M.M.C. Dispute on 23.59 Directors Rules, 1966 Seigniorage Fee (Mines & Geology) to be paid on Minor Minerals.

Customs Dispute 2012-13 40.82 CESTAT Duty regarding classification of coal as steam or Bituminous imported

(x) The Company has no accumulated losses as at 31st March, 2014. Further the company has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

(xi) Based on our Audit procedures and on 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) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of this Order are not applicable to the Company.

(xiv) In the opinion and according to information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All Long term investments are held by the Company in its own name.

(xv) In the opinion and according to information and explanations given to us, the Company does not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) During the year under report, the Company has not obtained fresh term loans. The Term loans obtained in earlier years have been applied for the purpose for which they were obtained.

(xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long term investment by the Company.

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

(xix) The Company has not issued any debentures.

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

(xxi) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and in accordance to the information and explanations given to us we have neither come across any instances of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the Management.

For M. Bhaskara Rao & Co; Chartered Accountants Firm Registration Number : 000459S

(V.K. Muralidhar) Place : Hyderabad Partner Date : 20.05.2014 Membership Number : 201570

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Deccan Cements 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 a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c) the Balance Sheet, 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;

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.

STATEMENT REFERRED TO IN OUR REPORT OF EVEN DATE

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

b) According to the information and explanations given to us, the Management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us, the Company has not disposed off substantial part of fixed assets and hence, reporting on the going concern status in this regard does not arise.

(ii) a) The inventories has been physically verified during the year by the Management at reasonable intervals. In our opinion, the frequency of the verification is reasonable.

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 nature of its business.

c) In our opinion and according to the information and explanation given to us, and on the basis of our examinations of the inventory records, the Company is maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and (d) of clause (iii) of this Order are not applicable.

b) According to the information and explanations given to us, the Company has taken unsecured loans from other parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the outstanding balances of said loans aggregated to Rs 104.41 Lakhs and Nil respectively.

c) The rate of interest and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company; and

d) Payment of the principal amount and interest are regular.

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

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

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of other parties are reasonable.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provision of section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

(vii) The internal audit of the Company has been conducted by a firm of Chartered Accountants. The scope and coverage of internal audit commensurate with the size of the Company and nature of its business.

(viii) On the basis of records produced to us, we are of the opinion that, prima facie the cost records and accounts prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, have been maintained. However, we are not required to and, have not carried out any detailed examinations of such accounts and records.

(ix) a) According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate authorities in India. There are no arrears of statutory dues as at 31st March 2013 which are outstanding for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there are no dues on accounts of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess as at March 31, 2013 which have not been deposited on account of dispute except the following:

(x) The Company has no accumulated losses as at 31st March 2013. Further it has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

(xi) Based on our Audit procedures and on 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) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of this Order are not applicable to the Company.

(xiv) In the opinion and according to information and explanations given to us, the Company does not deals or trade in shares, securities, debentures and other investments. All Long term investments are held by the Company in its own name.

(xv) In the opinion and according to information and explanations given to us, the Company does not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) During the year under report, the Company has not obtained fresh term loans. The Term loans obtained in earlier years have been applied for the purpose for which they were obtained.

(xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long term investment by the Company.

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

(xix) The Company has not issued any debentures.

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

(xxi) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and in accordance to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the Management.

For M Bhaskara Rao & Co.

Chartered Accountants

Firm Registration Number: 000459S

V K Muralidhar

Place : Hyderabad Partner

Date : 21.05.2013 Membership Number: 201570

Mar 31, 2012

1. We have audited the attached Balance Sheet of DECCAN CEMENTS LIMITED as at 31st March, 2012, the Statement of Profit and Loss and also the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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 by the Companies (Auditor's Report) Order, (Amendment) 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraphs 4 and 5 of the said Order.

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

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) 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;

iv) 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;

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

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with "Significant 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:

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

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

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

ANNEXURE TO THE AUDITORS REPORT (STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE)

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

b) According to the information and explanations given to us, the Management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us, the Company has not disposed off substantial part of fixed assets and hence, reporting on the going concern status in this regard does not arise.

ii) a) The inventories have been physically verified during the year by the Management at reasonable intervals. In our opinion, the frequency of the verification is reasonable.

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 nature of its business.

c) In our opinion and according to the information and explanation given to us, and on the basis of our examinations of the inventory records, the Company maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii) a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and (d) of clause (iii) of this Order are not applicable.

e) According to the information and explanations given to us, the Company has taken unsecured loans from other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the period and the outstanding year end balances of said loans aggregate to Rs 586.64 Lakhs and Rs 104.41 Lakhs respectively.

f) The rate of interest and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company; and

g) Payment of the principal amount and interest are regular.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of other parties are reasonable.

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provision of section 58A, 58AA or any other relevant provision of companies act 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company law board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

vii) The internal audit of the Company has been conducted by a firm of Chartered Accountants. The scope and coverage of internal audit commensurate with the size of the Company and nature of its business.

viii) On the basis of records produced to us, we are of the opinion that, prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956, have been maintained. However, we are not required to and, have not carried out any detailed examinations of such accounts and records.

ix) a) According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales tax Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate authorities in India. There are no arrears of statutory dues as at 31st March,

2012 which are outstanding for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues on accounts of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess as at March 31,2012 which have not been deposited on account of dispute except the following :

Assessment year Name of Rs.In Forum where dispute is Nature of Dues to which the the Statue Lacs. pending amount relates

Disallowance of debenture issue 1997-98 6.46 Income Tax appellate Income Tax expenses and Act,1961 bad debts. Tribunal, Hyderabad. CIT(appeals) Hyderabad. Sales Tax on packing material 1993-94 11.52 High Court of Andhra Pradesh

Andhra Sales tax on transfer of clinker from 2001-02 & 9.30 High Court of Andhra Pradesh cement division to slag division 2005-06 306.14 Pradesh general General Sales tax demand for the deemed 1999-2000 & 85.68 Sales Tax Deputy Commissioner Act,/VAT excess production based on energy 2000-01 (Appeals) Hyderabad Act. audit

Sales tax deferment on additional 2001-02 168.97 High Court of Andhra products manufactured Pradesh

Dispute on water rates levied on 1997-98 723.29 the quantum of water used in the two 2007-08 generation of water.

Others Dispute on duty levied by A.P 2003-04 To 316.23 High court Govt. One of Andhra electricity Pradesh generated and 2008-09 consumed.

x) The Company has no accumulated losses as at 31st March, 2011. Further it has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

xi) Based on our Audit procedures and according to 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 institution, banks or debenture holders.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of this Order are not applicable to the Company.

xiv) In the opinion and according to information and explanations given to us, the Company does not deals or trade in shares, securities, debentures and other investments. All investments are held by the Company in its own name.

xv) In the opinion and according to information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) During the year under report, the Company has not obtained term loans. The Term loans obtained have been applied for the purpose for which they were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long term investment by the Company.

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

xix) The Company has not issued any debentures.

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

xxi) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across any instances of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the Management.

For M.BHASKARA RAO & CO.,

Chartered Accountants

Firm Registration Number. 00459 S

(V.K. MURALIDHAR)

Place : Hyderabad Partner

Date : 15.05.2012 Membership Number. 201570

Mar 31, 2011

1. We have audited the attached Balance Sheet of DECCAN CEMENTS LIMITED as at 31st March, 2011, the Profit and Loss Account and also the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) Order. (Amendment) 2004 issued by the Central Government in the terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph (1) 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) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

iv) 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 the Section 211 of the Companies Act, 1956;

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

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with "Significant 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:

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

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT (STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE)

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

b) According to the information and explanations given to us, the Management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us, the Company has not disposed off substantial part of fixed assets and hence, reporting on the going concern status in this regard does not arise.

ii) a) The inventories have been physically verified during the year by the Management at reasonable intervals. In our opinion, the frequency of the verification is reasonable.

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 nature of its business.

c) In our opinion and according to the information and explanation given to us, and on the basis of our examinations of the inventory records, the Company maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii) a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured to the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and (d) of clause (iii) of this Order are not applicable.

e) According to the information and explanations given to us, the Company has taken unsecured loans from other parties covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount involved during the period and the outstanding balances of said loans aggregated to Rs.728.14 Lacs and Rs.586.64 Lacs respectively.

f) The rate of interest and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company; and

g) Payment of the principal amount and interest are regular.

iv) In our opinion and, according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and for the sale of goods and services.

During the course of our audit, we have not observed any continuing failure to the correct major weaknesses in internal control.

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

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of other parties are reasonable.

vi) In our opinion and according to the information and explanations given to us, the Company has compiled with the provision of section 58A, 58AA or any other relevant provision of Companies Act 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company and law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the company in respect of the aforesaid deposits.

vii) The Internal audit of the Company has been conducted by a firm of Chartered Accountants. The scope and coverage of internal audit commensurate with the size of the Company and nature of its business.

viii) On the basis of records produced to us, we are of the opinion that, prima facie the cost records and accounts prescribed by the Central Government under Section 209(l)(d) of the Companies Act, 1956, have been maintained. However, we are not required to and, have not carried out any detailed examinations of such accounts and records.

ix) a) According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate ÃÂ¦ authorities in India. There are no arrears of statutory dues as at 31st March, 2011 which are outstanding for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there are no dues on accounts of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess as at March 31, 2011 which have not been deposited on account of dispute except the following:.

Name Assessment year Rs. Forum where of the Nature of Dues to which the in dispute is Statute amount relates Lacs pending

Disallowance of debenture issue 1997-98 6.46 Income Tax Appellate Income Tax expenses and bad debts Tribunal, Hyderabad. Act 1961 Disallowance of deduction 2006-07 359.03 CIT (appeals), claimed u/s 80 I (A). Hyderabad.

Sales tax on packing materials 1993-94 11.52 High Court of Andhra Pradesh Sales tax on transfer of clinker 2001-02 9.30 High Court of A.P. Andhra Pradesh from cement division to slag 2005-06 306.14 High, Court of division Andhra Pradesh General Sales Tax Act,/ VAT Act. Sales tax demand for the 1999-2000 Deputy deemed excess production & 85.68 Commissioner (Appeals) based on energy audit 2000-01 Hyderabad Sales tax deferment on 2001-02 168.97 High Court of additional products manufactured Andhra Pradesh Difference in voltage surcharge 1999-2000 42.33 High Court of charged by AP Transco Andhra Pradesh Others Dispute on water rates levied 1997-98 723.29 High Court of on the quantum of water used to Andhra Pradesh in the generation of power . 2007-08 Dispute on duty levied by 2003-04 AP Govt, on electricity to 316.23 High Court of generated and consumed. 2008-09 Andhra Pradesh

x) The Company has no accumulated losses as at 31st March, 2011. Further it has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

xi) Based on our Audit procedures and according to 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 debentures holders.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of this Order are not applicable to the Company.

xiv) In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All Long term investments are held by the Company in its own name.

xv) In our opinion and according to the information and explanations given to us, the Company does not give any guarantee for loans taken by others from banks or financial institutions.

xvi) During the year under report, the Company has not obtained term loans. The Term loans obtained have been applied for the purpose for which they were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long term investment by the Company.

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

xix) The Company has not issued any debentures.

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

xxi) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across any instances of fraud on or by the Company, noticed or reported during the year nor have been informed of such case by the Management.

For M.Bhaskara Rao & Co.,

Chartered Accountants

Firm Registration No.00459 S

(V.K.MURALIDHAR)

Place : Hyderabad Partner

Date : 30.05.2011 Membership No.201570

Mar 31, 2010

We have audited the attached Balance sheet of Deccan Cements Limited, as at March 31, 2010, the Profit & Loss Account and also Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) Order, (Amendment) 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956. we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (1) above, we report that:

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

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

c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt

with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Profit & 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 Companies Act, 1956;

e) on the basis of written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act,1956.

f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with "Significant 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:

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

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT (STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE)

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

(b) According to the information and explanations given to us, the management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the company and the nature of the assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the company has not disposed off substantial part of fixed assets hence, reporting on the going concern status in this regard does not arise.

ii) (a) The inventory has been physically verified during the year by the Management at reasonable intervals. In our opinion the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us and, on the basis of our examination of the inventory records, the Company is maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii) a) According to the information and explanations given to us, the company has not granted any loan, secured or unsecured to companies, firms or other parties covered

in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and (d) of clause (iii) of this Order are not applicable.

b) According to the information and explanations given to us, the company has taken unsecured loans from other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the period and the outstanding balances of said loans aggregated to Rs.728.14 Lacs and Rs.728.14 Lacs respectively.

c) The rate of interest and other terms and conditions of unsecured loans taken by the company, are not prima facie prejudicial to the interest of the company; and

d) Payment of the principal amount and interest are regular.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of other parties are reasonable.

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

vii) The Internal Audit of the Company has been conducted by a Firm of Chartered Accountants. The scope and coverage of Internal Audit is commensurate with the size of the Company and nature of its business.

viii) On the basis of records produced to us, we are of the opinion that, prima facie the cost records and accounts prescribed by the Central Government under Section 209(l)(d) of the Companies Act, 1956, have been maintained. However, we are not required to and, have not carried out any detailed examination of such accounts and records.

ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, 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 and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate authorities in India. There are no arrears of Statutory dues as at March 31, 2010 which are outstanding for a period more than 6 months from the date they became payable. (b) According to the information and explanations given to us, there are no dues on account of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and Cess as at March 31, 2010 which have not been deposited on account of dispute except the following:

Name of Nature of Dues Assessment year Rs.in Forum where

the Statute to which the Lacs. dispute is pending amount relates

Disallowance of debenture issue 1997-98 6.46 Income Tax Appel- late

Income Tax expenses and bad debts Tribunal,Hyderabad. Act 1961 Disallowance of deduction 2006-07 359.03 CIT (appeals). claimed u/s 80 I (A). Hyderabad.

Sales tax on pac- king materials 1993-94 11.52 High Court of Andhra Pradesh Sales tax on transfer of clinker 2001-02 9.30 High Court of A.P. from cement division to slag 2005-06 306.14 High Court of Andhra Pradesh division Andhra Pradesh

General Sales Dispute on input tax credit 2004-05 16.13 High Court of

Tax Act, /VAT Act. on coal Andhra Pradesh

Sales tax demand for the 1999-2000 Deputy deemed excess production & 85.68 Commissioner (Appeals) based on energy audit 2000-01 Hyderabad Sales tax deferment on 2001-02 168.97 High Court of additional products manufactured Andhra Pradesh

Difference in voltage surcharge 1999-2000 42.33 High Court of charged by AP Transco Andhra Pradesh

Others Dispute on water rates levied 1997-98 723.29 High Court of on the quantum of water used To Andhra Pradesh in the generation of power. 2007-08

Dispute on duty levied by 2003-04 AP Govt, on electricity To 316.23 High Court of generated and consumed. 2008-09 Andhra Pradesh

x) The Company has no accumulated losses as onfs March 31, 2010. Further it has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

xi) Based on our Audit procedures and on 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 or banks or debenture holders.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause 4(xiii) of this Order are not applicable to the company.

xiv) In our opinion and according to information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long term investments are held by the Company in its own name.

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

xvi) The Company has obtained term loans during the financial year. The term loans obtained have been applied for the purpose for which they were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short- term basis, which have been used for long-term investments by the Company.

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

xix) The company has not issued any debentures.

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

xxi) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across any instances of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.

For M. Bhaskara Rao & Co.,

Chartered Accountants Firm Registration No. 00459S

Anil Kumar Mehta

Partner Membership No. 14284

Place : Hyderabad Date : 28th May, 2010

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