Auditor Report of Gujarat Sidhee Cement Ltd.

Mar 31, 2018

INDEPENDENT AUDITOR''S REPORT

To the Members of Gujarat Side Cement Limited Report on the Standalone In AS Financial Statements

We have audited the accompanying Standalone in AS Financial Statements of GUJARAT SIDHEE CEMENT LIMITED ("the Company”), which comprise of the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information ("the Standalone in AS Financial Statements”).

Management''s Responsibility for the Standalone in 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 of these Standalone in 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 Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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

We have taken into account the provisions of the Act, the Indian Accounting Standards 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 of the Standalone in AS Financial Statements in accordance with the Standards on Auditing, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone in AS Financial Statements are free from material misstatement.

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

We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone in AS Financial Statements.

Opinion

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

Emphasis of Matter

The remuneration of '' 163.44 laces which was provided and paid to the Executive Vice Chairman ("EVC”) during the financial year 2015-16 was in excess of the limit prescribed under Sections 197 and 198 read with Schedule V of the Companies Act, 2013, is still pending approval of the Central Government and the same is held by EVC in trust for the Company as at March 31, 2018.

Our opinion is not modified in respect of this matter.

Other Matter

The Comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening Balance Sheet as at April 1, 2016 included in these Standalone Indi AS Financial Statements, are based on the previously issued financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 and other accounting principles generally accepted in India and audited by the predecessor auditor (vide their unmodified audit report on May 24, 2017 and May 27, 2016 respectively), as adjusted for the differences in the accounting principles adopted by the Company on transition to Indi AS, which have been audited by us.

Our opinion above on the Standalone in AS Financial Statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above 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 Standalone in AS Financial Statements comply with the in AS specified 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 March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act;

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone in AS financial statements - Refer Note 34 of the Standalone in AS Financial Statements;

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

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

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

Referred to in paragraph 1.f under the heading of "Report on Other Legal and Regulatory Requirements” of our Independent Auditors'' Report

of even date on the Standalone in AS Financial Statements for the year ended March 31, 2018

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

We have audited the internal financial controls over financial reporting of GUJARAT SIDHEE CEMENT LIMITED (" the Company”), as of March 31, 2018 in conjunction with our audit of the Standalone in 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 (the "Guidance Note”) 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 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. 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 Standalone in 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

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone in AS 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 expenditure of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

Referred to in paragraph 2 under the heading of "Report on Other Legal and Regulatory Requirements” of our Independent Auditors'' Report of even date on the Standalone in AS Financial Statements for the year ended March 31, 2018

Report on the Companies (Auditors'' Report) Order, 2016, issued in terms of Section 143(11) of the Companies Act, 2013 ("the Act") of GUJARAT SIDHEE CEMENT LIMITED ("the Company")

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment (PPE).

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

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as included in Note 2 to the in AS Financial Statements, are held in the name of the Company.

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

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liabilities partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, reporting requirements as per the provisions of Clause 3(iii) [(a) to (c)] of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act, with respect to the loans and investments made. The Company has not given any guarantee or provided any security in connection with a loan to any person or other body corporate and accordingly, the question of commenting on compliance with the provisions in respect thereof does not arise.

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

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as specified by the Central Government for maintenance of cost records under Section 148(1) of the Act, in respect of cement manufactured by the Company and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the said accounts and records with a view to determine whether they are accurate or complete.

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

has been regular in depositing undisputed statutory dues including Provident Fund, Income-tax, Goods and Services Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cass and other statutory dues as applicable to it with the appropriate authorities, except in few cases there were delays in payment of service tax, excise duty, customs duty and tax deduction at source. However, there are no arrears of outstanding statutory dues on the last day of the financial year, for a period of more than six months from the date they become payable. As informed to us, the provisions of the Employees'' State Insurance Act are not applicable to the Company.

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

Name of the Statute	Forum where the dispute is pending	Nature of Dues	Period to which amount relates	Amounts ('' in laces)
Customs Act, 1962	Customs, Excise and Service Tax Appellate Tribunal	Customs Duty	1995-96	35.85
	Customs, Excise and Service Tax Appellate Tribunal	Customs Duty and Penalty	2008-09	0.62(*0.62)
	Customs, Excise and Service Tax Appellate Tribunal	Customs Duty and Penalty	2012-13	420.59 (*42.62)

Name of the Statute	Forum where the dispute is pending	Nature of Dues	Period to which amount relates	Amounts ('' in laces)
Central Excise Act, 1944	Customs, Excise and Service Tax Appellate Tribunal	Excise Duty	1992-93	36.72
	Commissioner, Central Excise	Excise Duty and Penalty	2010-11	464.57
	Customs, Excise and Service Tax Appellate Tribunal	Excise Duty and Penalty	2008-09 to 2013-14	1052.49(*44.68)
Central Excise / CENVAT Credit Rules, 2004	Customs, Excise and Service Tax Appellate Tribunal	Service Tax, Interest and Penalty	2007-08	6.32(*0.57)
	Customs, Excise and Service Tax Appellate Tribunal	Service Tax and Penalty	2012-13 and 2013-14	138.35(*5.37)
Rajasthan Sales Tax Act, 1994	Rajasthan High Court	Sales Tax and Penalty	1997-98	24.73
Gujarat Sales Tax Act, 1961	Joint Commissioner, Rajkot	Sales Tax and Penalty	2002-03 to 2004-05	121.21(*37.61)
Gujarat Value Added Tax Act, 2003	Tribunal, Gujarat Value Added Tax	Value Added Tax, Interest and Penalty	2006-07 and 2007-08	321.88(*54.23)

*indicates amount deposited or paid under protest.

viii. According to the information and explanations given to us, as also on the basis of the books and records examined by us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan or borrowing from financial institutions or Government and has not issued any debenture during the year.

ix. According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, paragraph 3 (ix) of the Order in respect thereof is not applicable. Moneys raised by way of term loans were applied for the purposes for which those are raised.

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

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration during the financial year 2017-18 in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

Further, the remuneration of '' 163.44 laces which was provided and paid to the Executive Vice Chairman ("EVC”) during the financial year 2015-16 was in excess of the limit prescribed under Sections 197 and 198 read with Schedule V of the Act, is still pending approval of the Central Government and the same is held by EVC in trust for the Company as at March 31, 2018.

xii. The Company is not a Niche company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

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

xiv. According to the information and explanations given to us and on the basis of the books and records examined by us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, reporting under paragraph 3(xiv) of the Order is not applicable.

xv. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No.100991W

PARESH H. CLERK

Place : MUMBAI Partner

Date : May 25, 2018 Membership No. 36148

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Mar 31, 2017

INDEPENDENT AUDITOR’S REPORT

TO

THE MEMBERS OF

GUJARAT SIDHEE CEMENT LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GUJARAT SIDHEE CEMENT LIMITED (“the Company”), which comprise the Balance Sheet as at 31^st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended on that date and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

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

Auditor’s Responsibility

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

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

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

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

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

Opinion

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

Emphasis of Matter

We draw attention to following notes:

(i) Note 33(B) to the standalone financial statements, relating to provision made for remuneration to Executive Vice Chairman for the period from April 01, 2016 to December 31, 2016 for which application is made to the Central Government and for the period from January 01, 2017 to March 31, 2017 in respect of which application will be made to the Central Government as stated in the said note. In respect of remuneration paid to him for the financial years 2015-16 and 2014-15 in excess of the limit prescribed under sections 197 and 198 read with schedule V to the Companies Act, 2013, application is made to the Central Government. Hence the provision made for the year 2016-17 and payment of excess remuneration for financial year 2015-16 and 2014-15 are subject to approval of Central Government.

(ii) Note 36(b) to the standalone financial statements regarding continuing recognition of MAT Credit Entitlement of earlier years for the reasons stated in the said note.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

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

(2) of the Act;

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

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

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

(ii) The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(iv) The Company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by management. Refer Note 34 to the standalone financial statements.

[Referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” section of our report on Standalone Financial Statements to the members of Gujarat Sidhee Cement Limited (the Company) for the year ended March 31, 2017]

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items, over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been 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.

2. The inventory has been physically verified by the Management during and at the year end. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liabilities partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, reporting requirements as per the provisions of Clause 3

(iii) [(a) to (c)] of the order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act, with respect to the investments made. The Company has not given any loans to which provisions of section 185 and 186 of the Act are applicable.

5. The Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

6. We have broadly reviewed the books of account maintained by the Company in respect of cement produced by the company where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,

the Company is regular in depositing the undisputed statutory dues, including employee state insurance, provident fund, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities except on few occasions wherein there was some delay in payment of service tax, excise duty and tax deduction at source.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(b) The particulars of dues of service tax, sales tax, excise duty, custom duty and income tax which have not been deposited as at March 31, 2017 on account of a dispute, are given hereunder :

Name of the Statute	Nature of dues	Amount (? In lacs)	Period to which the amount relates	Forum where the dispute is pending
Customs Act, 1962	Custom Duty	35.85	1995-96	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	0.62	2008-09	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	420.59	2012-13	Customs, Excise & Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise Duty	36.72	1992-93	Customs, Excise & Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise Duty	464.57	2010-11	Commissioner, Central Excise
Central Excise Act, 1944	Excise Duty	1,053.11	2008-09 to 2013-14	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	6.33	2007-08	Customs, Excise & Service Tax Appellate Tribunal

Name of the Statute	Nature of dues	Amount (? In lacs)	Period to which the amount relates	Forum where the dispute is pending
Central Excise / CENVAT Credit Rules, 2004	Service Tax	143.47	2012-13 & 2013-14	Customs, Excise & Service Tax Appellate Tribunal
Rajasthan Sales Tax Act, 1994	Sales Tax	24.73	1997-98	Rajasthan High Court
Gujarat Sales Tax Act,1961	Sales Tax	121.21	2002-03 to 2004-05	Joint Commissioner, Rajkot
Gujarat Value Added Tax Act, 2003	Value Added Tax	321.88	2006-07 & 2007-08	Tribunal, Gujarat Value Added Tax

8. The Company has not defaulted in repayment of loans or borrowing dues to financial institution, bank or Government. The company has not issued debentures.

9. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Money raised by way of term loans have been applied for the purpose for which they were raised.

10. During the course of our examination of the books and 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 fraud by or on the Company by its officers or employees has been noticed or reported during the year, nor have we been informed of any such case by the Management.

11. The company has made provision for remuneration to Executive Vice Chairman for the year 2016-17. The Company has made application to the Central Government for payment of remuneration for the period from 1-04-2016 to 31-12-2016. For remuneration for the period from 1-01-2017 to 31-03-2017, the Company will make an application to the Central Government after obtaining approval from Nomination and Remuneration Committee, the Board of Directors and Shareholders in AGM as stated in Note No. 33(B) to the standalone financial statements.

Further, in view of inadequacy of profit for the years 2014-15 and 2015-16, remuneration paid by the Company to Executive Vice Chairman was in excess of the limit prescribed under sections 197 and 198 read with Schedule V to the Companies Act, 2013. The company has made application to the Central Government for obtaining approval for payment of excess remuneration. The company has obtained undertaking from Executive Vice Chairman for repayment of excess remuneration in case the Central Government does not approve the payment of excess remuneration.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. 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.

14. According to the information and explanations give 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.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions of section 192 of the Act is not applicable.

16. According to the information and explanations given to us and based on our examination of the records of the Company, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

[Referred to in paragraph 2 (f) under “Report on Other Legal and Regulatory Requirements” section of our report on Standalone Financial Statements for the year ended March 31, 2017 to the members of Gujarat Sidhee Cement Limited(the company)]

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

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

Management’s Responsibility for Internal Financial Controls

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

Auditor’s Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

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

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For Manubhai & Shah LLP

Chartered Accountants

ICAI Firm Regn. No. 106041W / W100136

(Darshan Shah)

Place: Mumbai Partner

Date: May 24, 2017 Membership No. 131508

---

Mar 31, 2016

TO

THE MEMBERS OF

GUJARAT SIDHEE CEMENT LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GUJARAT SIDHEE CEMENT LIMITED (“the Company”), which comprise the Balance Sheet as at 31^st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended on that date and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

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

Auditor’s Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to following notes:

(i) Note 35(B)(1) to the standalone financial statements, relating to remuneration paid to Executive Vice Chairman for the Financial Years 2015-16 and 2014-15 in excess of the limit prescribed under sections 197 and 198 read with schedule V to the Companies Act, 2013 which is subject to approval of Central Government.

(ii) Note 37(b) to the standalone financial statements regarding continuing recognition of MAT Credit Entitlement of earlier years for the reasons stated in the said note.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

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

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

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 33 to the financial statements;

(ii) The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

[Referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” section of our report on Standalone Financial Statements to the members of Gujarat Sidhee Cement Limited (the Company) for the year ended March 31, 2016]

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items, other than underground Sidhee Cement pipelines which are not physically verifiable, over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been 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 inventory has been physically verified by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liabilities partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act, with respect to the investments made. The Company has not given any loans to which provisions of section 185 of the Act is applicable.

(v) The Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of cement produced by the company where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including employee state insurance, provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities though there has been some delay in few cases.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(b) The particulars of dues as at March 31, 2016 of service tax, sales tax, excise duty, custom duty and income tax which have not been deposited on account of a dispute, are given hereunder :

Name of the Statute	Nature of the Dues	Amount (Rs. In Lacs)	Financial Year to which amount relates	Forum where dispute is pending
Central ExciseAct, 1944	Excise Duty	36.72	1992-93	Customs, Excise & Service Tax Appellate Tribunal
Central ExciseAct, 1944	Excise Duty	8.08	2008-09 TO 2010-11	Customs, Excise & Service Tax Appellate Tribunal

Name of the Statute	Nature of the Dues	Amount (Rs.In Lacs)	Financial Year to which amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty	6.23	2011-12	Customs, Excise & Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise Duty	2.92	2012-13	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	35.85	1995-96	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	0.62	2008-09	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	202.37	2012-13	Customs, Excise & Service Tax Appellate Tribunal
Customs Act, 1962	Custom Duty	218.22	2012-13	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	6.32	2007-08	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	302.61	2009-10	Commissioner, Central Excise
Central Excise / CENVAT Credit Rules, 2004	Service Tax	162.70	2010-11	Commissioner, Central Excise
Central Excise / CENVAT Credit Rules, 2004	Service Tax	261.83	2008-09	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	42.01	2009-10	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	302.39	2010-11	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	408.40	2011-12	Customs, Excise & Service Tax Appellate Tribunal
Central Excise / CENVAT Credit Rules, 2004	Service Tax	6.84	2012-13	Customs, Excise & Service Tax Appellate Tribunal
Income Tax Act, 1961	Income Tax Deducted at Source	1.50	2006-07	Commissioner, Income Tax
Rajasthan Sales Tax Act, 1994	Sales Tax	24.73	1997-98	Rajasthan High Court
Gujarat Sales Tax Act,1961	Sales Tax	121.21	2002-03 to 2004-05	Joint Commissioner, Rajkot
Gujarat Value Added Tax Act, 2003	Value Added Tax	321.88	2006-07 & 2007-08	Tribunal, Gujarat Value Added Tax

(viii) The Company has not defaulted in repayment of loans or borrowing dues to financial institution, bank or Government. The company has not issued debentures.

(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Money raised from term loans have been applied for the purpose for which they were raised.

(x) During the course of our examination of the books and 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 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 any such case by the Management.

(xi) In view of inadequacy of profit for the year 2015-16, remuneration paid by the Company to Executive Vice Chairman is in excess by Rs.163.44 lacs of the limit prescribed under sections 197 and 198 read with Schedule V to the Companies Act, 2013. The company proposes to make application to Central Government for allowing the payment of excess remuneration. Further, in view of inadequacy of the profit for the year 2014-15, remuneration paid by the Company to Executive Vice Chairman was in excess by Rs. 184.79 lacs of the limit prescribed under sections 197 and 198 read with Schedule V to the Companies Act, 2013. The company has made application to the Central Government for obtaining approval to payment of excess remuneration.

The company has obtained undertaking from Executive Vice Chairman for repayment of excess remuneration in case the Central Government does not approve the payment of excess remuneration. Attention is also invited to Note 35(B)(1) to the Financial statements.

(xii) In our opinion and according to the information and explanations given to us, 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 give 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. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us and based on our examination of the records of the Company, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Manubhai & Shah LLP

Chartered Accountants

ICAI Firm Regn. No. 106041W/W100136

(Darshan Shah)

Place: Mumbai Partner

Date: May 27, 2016 Membership No.131508

---

Mar 31, 2015

Report on the standalone financial statements

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

Management's responsibility for the standalone financial statements

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

Auditor’s responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to note 36(B)(1) and (2) to the standalone financial statements, relating to remuneration paid to the Executive Vice Chairman for the financial year 2014-15 in excess of the limit prescribed under sections 197 and 198 read with Schedule V to the Companies Act,2013 as well as remuneration paid to Executive Vice Chairman and Managing Director for the financial Year 2013-14, in excess of the limits prescribed under sections 198 and 309 read with schedule XIII to the Companies Act 1956 which is subject to the approval of the Central Government.

Our opinion is not qualified in respect of this matter.

Report on other Legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 34 (a) to the financial statements;

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

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

[Annexure referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements' section of our report on standalone financial statements for the year ended March 31, 2015 to the members of Gujarat Sidhee Cement Limited (the Company)]

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during period. According to the information and explanation given to us no material discrepancies were noticed on such verification.

2. (a) The inventory has been physically verified by the Management during the period. 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) On the basis of our examination of the inventory records, in our opinion, The Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to book records

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) and (b)] of the said Order are not applicable to the Company.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. The Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. We are informed that no order has been passed by Company Law Board (the CLB) or National Company Law Tribunal (the NCLT) or Reserve Bank of India or any Court or any other Tribunal.

6. We have broadly reviewed the books of account maintained by the Company in respect of cement where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues, including provident fund, income tax, sales tax, wealth tax, value added tax, service tax, custom duty, excise duty and other material statutory dues, as applicable, with appropriate authorities,.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable as applicable were in arrears as at March 31, 2015 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 the records of the Company examined by us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. The particulars of disputed dues of excise duty, custom duty, service tax, value added tax (sales tax) and income tax as at March 31, 2015 which have not been deposited are given hereunder:

Name of the statute Nature of Amount Period to which the dues (Rs. in lacs) amount relates

Central Excise Act, 1944 Excise Duty 36.72 1992-93

Central Excise Act, 1944 Excise Duty 8.08 2008-09 To 2010-11

Central Excise Act, 1944 Excise Duty 6.23 2011-12

Central Excise Act, 1944 Excise Duty 2.92 2012-13

Customs Act, 1962 Custom Duty 35.85 1995-96

Customs Act, 1962 Custom Duty 0.62 2008-09

Customs Act, 1962 Custom Duty 202.37 2012-13

Customs Act, 1962 Custom Duty 223.39 2012-13

Central Excise/ CENVAT Service Tax 6.32 2007-08 Credit Rules, 2004

Central Excise Act, 2004 Service Tax 302.61 2009-10

Central Excise/ CENVAT Service Tax 162.70 2010-11 Credit Rules, 2004

Income Tax Act, 1961 Income Tax 1.50 2006-07 Deducted at source

Rajasthan Sales Tax Act, Sales Tax 24.73 1997-98 1994

Gujarat Sales Tax Act, Sales Tax 121.21 2002-03 to 2004-05 1961

Gujarat Value Added Tax Value Added 321.88 2006-07 & 2007-08 Act, 2003 Tax

Name of the Statute Forum where the dispute is pending

Central Excise Act, 1944 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act, 1944 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act, 1944 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act, 1944 Customs, Excise & Service Tax Appellate Tribunal

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal

Central Excise/CENVAT Credit Rules, 2004 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act, 2004 Commissioner, Central Excise

Central Excise/CENVAT Credit Rules, 2004 Commissioner, Central Excise

Income Tax Act, 1961 Commissioner, Income Tax

Rajasthan Sales Tax Act, 1994 Rajasthan High Court

Gujarat Sales Tax Act, 1961 Joint Commissioner, Rajkot

Gujarat Value Added Tax Act, 2003 Tribunal, Gujarat Value Added Tax

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

8. The Company has no accumulated losses as at the year ended March 31, 2015 and it has not incurred any cash losses in the year ended on that date or in the immediately preceding financial year.

9. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

10. 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 during the year. Therefore, the reporting requirement as per Clause 3(x) of the Order is not applicable.

11. In our opinion the term loans from non-banking finance companies have been applied for the purpose for which they were raised.

12. During the course of our examination of the books and 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, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the period, nor have we been informed of any such case by the Management.

For Manubhai & shah

Chartered Accountants

Firm Registration No. 106041W

(DARSHAN SHAH)

Place: Mumbai Partner

Date: May 15, 2015 Membership No.131508

---

Mar 31, 2014

We have audited the accompanying financial statements of Gujarat Sidhee Cement Limited, which comprise the Balance Sheet as at March 31, 2014, 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 sub-section (3C) of Section 211 of the Companies Act, 1956 (the Act) read with General Circular 15/2013 dated September 13, 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence 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 Profit and Loss Account, of the loss for the year ended on that date; and

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

Emphasis of Matter

We draw your attention to note 35(B)(5) to the financial statements, relating to remuneration paid in respect of the Executive Vice Chairman and Managing Director of the company for the financial year 2013-14, in excess of the limits prescribed under section 198 read with schedule XIII to the Act, which is subject to the approval of the Central Government. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

p1 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.

ANNEXURE TO THE AUDITOR''S REPORT The annexure referred to in our report to the members of Gujarat Sidhee Cement Limited (the Company) for the year ended March 31, 2014.

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Pursuant to the programme portion of fixed asset has been physically verified during the year by the management. According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is

reasonable.

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

(c) The Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to book records.

3. According to information and explanation given to us there are no parties covered in the register maintained under section 301 of the Companies Act, 1956, consequently reporting requirement as per clauses (iii) (b) to (d) as well as (f) and (G) of para 4 of the order are not applicable in case of the company.

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

5. In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

6. The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board (''the CLB'') or National Company Law Tribunal (''the NCLT'') or Reserve Bank of India (''the RBI'') or any Court or any other Tribunal.

7. Internal Audit has been carried out by an external agency. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 related to the manufacture of cement, and are of the opinion that prima facie the prescribed accounts and records has been made and maintained.

9. (a) In our opinion and according to the information and explanation given to us, the company is generally regular in depositing

undisputed statutory dues with the appropriate authorities in respect of provident fund, employees'' state insurance, wealth tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it except there were some delays on few occasions in payment of Service Tax, Tax Deducted at Source, Income Tax, custom duty and Excise duty.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. In respect of excise duty, customs duty, sales tax and income tax, details of disputed dues not deposited are given hereunder:

Name of the Statute Nature of the Dues Amount (Rs. In Lacs)

Central Excise Act, 1944 Excise Duty 36.72

Central Excise Act, 1944 Excise Duty 8.08

Central Excise Act, 1944 Excise Duty 6.23

Central Excise Act, 1944 Excise Duty 2.92

Customs Act, 1962 Custom Duty 35.85

Customs Act, 1962 Custom Duty 0.62

Customs Act, 1962 Custom Duty 224.30

Central Excise / CENVAT Service Tax 6.32 Credit Rules, 2004

Central Excise / CENVAT Service Tax 302.61 Credit Rules, 2004

Central Excise / CENVAT Service Tax 162.70 Credit Rules, 2004

Income Tax Act, 1961 Income Tax Deducted 1.50 at Source

Income Tax Act, 1961 Assessment U/S 143 794.05 (3)

Income Tax Act, 1961 Income Tax Deducted 5.49 at Source

Rajasthan Sales Tax Act, Sales Tax 24.73 1994

Gujarat Sale Tax Act1961 Sales Tax 121.21

Gujarat Value Added Tax Value Added Tax 321.88 Act, 2003

Period to which Forum where dispute is Name of the Statute amount relates pending

Central Excise Act 1994 1992-93 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act 1994 2008-09 TO Customs, Excise & Service Tax 2010-11 Appellate Tribunal

Central Excise Act 1944 2011-12 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act 1994 2012-13 Customs, Excise & Service Tax Appellate Tribunal

Customs Act 1962 1995-96 Customs, Excise & Service Tax Appellate Tribunal

Customs Act 1962 2008-09 Customs, Excise & Service Tax Appellate Tribunal

Customs Act 1962 2013-14 Customs, Excise & Service Tax Appellate Tribunal

Central Excise/CENVAT 2007-08 Customs, Excise & Service Tax Appellate Tribunal

Central Excise/CENUAT 2009-10 Commissioner, Central Excise

Central Excise /CENVAT 2010-11 Commissioner, Central Excise

Income Tax Act 1961 2006-07 Commissioner, Income Tax

Income Tax Act 1961 2009-10 Commissioner, Income Tax

Income Tax Act 1961 2010-11 Commissioner, Income Tax

Rajasthan Sales Tax Act 1997-98 Rajasthan High Court

Gujarat Sales Tax Act 2002-03to2004-05 Joint Commissioner, Rajkot

Gujarat Value Added Tax 2006-07& 2007-08 Tribunal, Gujarat Value Added Tax

10. The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the year as well as in the immediately preceding financial year.

11. In respect of term loans obtained from banks for purchase of vehicles, the company has not defaulted in repayment of dues to them.

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

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society as per the Chit Fund Act, 1982 and other state legislations. Hence, reporting requirement as per clause 4(xiii) is not applicable.

14 The company is not dealing or trading in shares, securities, debentures and other investments. However in respect of investment in shares and other securities proper records have been maintained. The shares and securities are held by the company in its own name.

15 According to the information and explanation given to us, the company has not provided guarantee for loans taken by others from banks and financial institutions. Hence, reporting requirement as per clause 4(xv) is not applicable.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used for long term investment.

18. During the year, 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.

19. There are no debentures issued and outstanding during the year.

20 During the year, the Company has not raised money by public issue(s).

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

For MANUBHAI & SHAH CHARTERED ACCOUNTANTS Registration No.: 106041W

(K.C. PATEL) PARTNER MEMBERSHIP NO. 30083

PLACE : MUMBAI DATED : May 31, 2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gujarat Sidhee Cement Limited, 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 Profit and Loss Account, of the profit for the year ended on that date; and

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

We draw attention to:

- note no. 33 (a) regarding reduction of equity share capital from Rs. 14,461.54 lacs consisting of 14,46,15,408 fully paid up Equity Shares of Rs. 10/- each to Rs. 3,615.39/- consisting of 3,61,53,852 fully paid up Equity Shares of Rs. 10/- each as at 25.02.2013, being the Record Date, in compliance with the order of Board of Industrial and Financial Reconstruction (BIFR) vide dated 06.12.2012 issued on 16.01.2013 and

- note no 35 (b) regarding non provision of interest of Rs. 346.02 crores claimed by Gujarat Government with Hon''ble Gujarat High Court for the reason stated in the said note

Our opinion is not qualified in respect of these matters.

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, 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.

ANNEXURE TO AUDITOR''S REPORT

The annexure referred to in our report to the members of Gujarat Sidhee Cement Limited (the Company) for the year ended March 31, 2013.

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

(b) The fixed assets have been physically verified by the management during the year except the assets at the corporate office at Mumbai, marketing office at Ahmedabad and various branch offices. According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to book records.

3 The Company has not granted/taken any loans or advances to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, reporting requirements as per clauses (iii) (a) to (iii) (g) of paragraph 4 of the Order are not applicable in case of the company.

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

5. In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

6. The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board (''the CLB'') or National Company Law Tribunal (''the NCLT) or Reserve Bank of India (''the RBI'') or any Court or any other Tribunal.

7. Internal Audit has been carried out by an external agency. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Ceptral Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 related to the manufacture of cement, and are of the opinion that prima facie the prescribed accounts and records has been made and maintained.

9. (a) In our opinion and according to the information and explanation given to us, the company is generally regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees'' state insurance, income tax, wealth tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it except there were some delays on few occasions in payment of Service Tax, Tax Deducted at Source and Excise duty.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

10. The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the year as well as in the immediately preceding financial year.

11. (a) The company has paid dues to Banks and Financial Institutions under One Time Settlement Scheme except dues of New

India Assurance Company Limited (NIAC). In respect of NIAC, according to the company, in terms of Scheme, the dues are repayable over a period of seven years beginning from 1.4.2004, the balance of which is under reconciliation. The company has so far not made any repayment of dues of NIAC. The amount of Rs. 42.53 Lacs towards principal and interest was outstanding as on 31st March, 2013.

(b) In respect of term loans obtained from banks for purchase of vehicles, the company has not defaulted in repayment of dues to them.

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

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society as per the Chit Fund Act, 1982 and other state legislations. Hence, reporting requirement as per clause 4(xiii) is not applicable.

14 The company is not dealing or trading in shares, securities, debentures and other investments. However in respect of investment in shares and other securities proper records have been maintained. The shares and securities are held by the company in its own name.

15 According to the information and explanation given to us, the company has not provided guarantees for loans taken by others from banks and financial institutions. Hence, reporting requirement as per clause 4(xiv) is not applicable.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used for long term investment.

18. During the year, 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.

19. There are no debentures issued and outstanding during the year.

20 During the year, the Company has not raised money by public issue(s).

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

For MANUBHAI & CO.

CHARTERED ACCOUNTANTS Registration No.: 106041W

(K.C. PATEL)

Place : Mumbai PARTNER

Dated : May 30, 2013 MEMBERSHIP NO. 30083

---

Mar 31, 2012

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

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

3. As required by the Companies (Auditors' Report) Order, 2003 (Order) and related amendments issued by the Central Government of India in terms of sub Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 of the said Order.

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

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

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

c) The Balance Sheet and the statement of Profit & Loss dealt with by this report are in agreement with books of account.

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

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon more particularly note no. 35(a) regarding order of Hon'ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR ) being awaited in the appeal filed by the company against order of Hon'ble BIFR discharging the Company from its purview and note no 35 (b) regarding non provision of interest of Rs 346.02 crores claimed by Gujarat Government with Hon'ble High Court for the reason stated in the said note, 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 balance sheet, of the state of affairs of the company as at 31st March, 2012;

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

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

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph (3) of our report of even date)

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

(b) The fixed assets have been physically verified by the management during the year, According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3 (i) The Company has not granted any loans or advances to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, reporting requirements as per clauses (iii) (a) to (iii) (d) of paragraph 4 of the Order are not applicable in case of the company.

(ii) The Company has not taken any loans or advances in the nature of loans, from parties covered in the register maintained under section 301 of the Companies Act, 1956 and therefore reporting requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of the Order are not applicable in case of company.

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

5. In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section .

6. The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board ('the CLB') or National Company Law Tribunal ('the NCLT') or Reserve Bank of India ('the RBI') or any Court or any other Tribunal.

7. Internal Audit has been carried out by an external agency. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 related to the manufacture of cement, and are of the opinion that prima facie the prescribed accounts and records has been made and maintained.

9. (a) In our opinion and according to the information and explanation given to us, the company is generally regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees' state insurance, income tax, wealth tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it except there were some delays on few occasions in payment of Service Tax, Custom Duty, Sales Tax, Value added Tax and Excise duty.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable.

(c ) According to the information and explanations given to us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. In respect of excise duty, customs duty, sales tax and income tax, details of disputed dues not deposited are given hereunder:

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

Central Excise Act, 1944 Excise Duty 36.42 1992-93 Customs, Excise & Service Tax Appellate Tribunal

Customs, Excise & Service Customs Act, 1962 Custom Duty 35.85 1995-96 Tax Appellate Tribunal

Customs, Excise & Service Customs Act, 1962 Custom Duty 0.62 2008-09 Tax Appellate Tribunal

Central Excise / CENVAT Custom, Excise & Service Service Tax 68.12 2005-06 Credit Rules, 2004 Tax Appellate Tribunal

Central Excise / CENVAT Commissioner of Central Service Tax 59.17 2005-06 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner of Central Service Tax 407.83 2006-07 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner of Central Service Tax 184.61 2007-08 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner, Central Service Tax 188.49 2008-09 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner, Central Service Tax 384.47 2009-10 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner, Central Service Tax 390.49 2010-11 Credit Rules, 2004 Excise

Central Excise / CENVAT Commissioner, Central Service Tax 372.57 2011-12 Credit Rules, 2004 Excise

Income Tax Commissioner, Income Income Tax Act, 1961 Deducted at 1.30 2007-08 Tax Source

Income Tax Commissioner, Income Income Tax Act, 1961 Deducted at 1.61 2009-10 Tax Source

Income Tax Commissioner, Income Income Tax Act, 1961 Deducted at 26.40 2010-11 Tax Source

Rajasthan Sales Tax Act, Sales Tax 24.73 1997-98 Rajasthan High Court

Gujarat Sales Tax Sales Tax 60.60 2002-03 Jt. Commissioner Rajkot Act,1961

Gujarat Sales Tax Sales Tax 56.29 2003-04 Jt. Commissioner Rajkot Act,1961

Gujarat Sales Tax Sales Tax 21.65 2004-05 Jt. Commissioner Rajkot Act,1961

Gujarat VAT Act, 2003 Sales Tax 224.59 2006-07 Tribunal, GVAT

Gujarat VAT Act, 2003 Sales Tax 87.25 2007-08 Tribunal, GVAT

10. The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the year; however there was cash loss in the immediately preceding financial year.

11. (a) In accordance with the sanctioned rehabilitation scheme (scheme) approved by Hon'ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) the repayment schedule of dues to Banks and Financial Institutions has been revised/ rescheduled.

The Company's proposal to Banks and Financial Institutions (Lenders) for One Time Settlement (OTS) of their dues has been accepted by the lenders except New India Assurance Company Limited (NIAC). In respect of NIAC, according to the company, in terms of Scheme, the dues are repayable over a period of seven years beginning from 1.4.2004, the balance of which is under reconciliation. The company has so far not made any repayment of dues of NIAC. The amount of Rs 38.30 Lacs towards principal and interest was outstanding as on 31st March, 2012.

(b) In respect of term loans obtain from banks for purchase of vehicles, the company has not defaulted in repayment of dues to them.

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

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society as per the Chit Fund Act, 1982 and other state legislations. Hence, reporting requirement as per clause 4(xiii) is not applicable.

14. According to the information and explanation given to us, the company has not provided guarantees for loans taken by others from banks and financial institutions. Hence, reporting requirement as per clause 4(xiv) is not applicable.

15. In our opinion, the term loans have been applied for the purpose for which they were raised.

16. According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used during the year for long term investment.

17. During the year, 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.

18. There are no debentures issued and outstanding during the year.

19. During the year, the Company has not raised money by public issue(s).

20. To the best of our knowledge and belief, and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

For MANUBHAI & CO.

CHARTERED ACCOUNTANTS

Registration No.: 106041W

(K.C. PATEL)

Place: Mumbai PARTNER

Dated: May 10, 2012 MEMBERSHIP NO. 30083

---

Mar 31, 2011

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

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

3. As required by the Companies (Auditors Report) Order, 2003 ( Order) issued by the Central Government of India in terms of sub Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 of the said Order.

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

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

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

III. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with books of account.

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

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 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 together with notes thereon more particularly note no. 1 (a) and 1 (b) in Schedule 13 regarding rehabilitation scheme sanctioned by Honble AAIFR being under implementation and non provision of interest of Rs. 346.02 crores claimed by Gujarat Government with Honble High Court for the reasons stated in the said note, give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of Profit & Loss Account of the Loss for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT (Referred to in paragraph (3) of our report of even date)

1. In respect of its fixed assets:

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

(b) The fixed assets have been physically verified by the management during the year, According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. In respect of its inventories:

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3. i) In respect of loans granted to parties covered in the register maintained u/s 301 of the Companies Act, 1956.

The Company has not granted any loans or advances to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, reporting requirements as per clauses (iii) (a) to (iii) (d) of paragraph 4 of the Order are not applicable in case of the company.

ii) In respect of loans taken from parties covered in the register maintained u/s 301 of the Companies Act, 1956.

The Company has not taken any loans or advances in the nature of loans, from parties covered in the register maintained under section 301 of the Companies Act, 1956 and therefore reporting requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of the Order are not applicable in case of company.

4. In respect of internal control

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

5. In respect of transactions need to be entered into a register maintained u/s 301 of the Companies Act, 1956.

In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section .

6. In respect of deposits from public

The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board (the CLB) or National Company Law Tribunal (the NCLT) or Reserve Bank of India (the RBI) or any Court or any other Tribunal.

7. In respect of internal audit system

Internal Audit has been carried out by a firm of chartered accountants. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. In respect of maintenance of cost records

We have broadly reviewed the books of accounts maintained by the Company pursuant to the Order made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are

of the opinion that prima facie the prescribed accounts and records has been made and maintained. We have not, however, made a detailed examination of the records.

9. In respect of statutory dues:

(a) In our opinion and according to the information and explanation given to us, the company is generally regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees state insurance, income tax, wealth tax, sales tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it except there were some delays on few occasions in payment of Sales Tax and Excise duty.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. In respect of excise duty, customs duty, sales tax and income tax, details of disputed dues not deposited are given hereunder:

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

Central Excise Act, 1944 Excise Duty 36.42 1992-93 Customs, Excise & Gold (Control) Appellate Tribunal

Customs Act, 1962 Custom Duty 35.85 1995-96 Customs, Excise & Gold (Control) Appellate Tribunal

Customs Act,1962 Custom Duty 0.62 2008-09 Commissioner (Appeal),Custom

Central Excise / CENVAT Service Tax Duty 68.12 2005-06 Custom, Excise & Credit Rules, service Tax Appe- 2004 llate Tribunal

Central Excise / CENVAT Service Tax 64.35 2005-06 Commissioner of Credit Rules Central Excise 2004

Central Excise /CENVAT Service Tax 407.84 2006-07 Commissioneratel Credit Rules, Level 2004 at Central Excise

Central Excise / CENVAT Service Tax 184.61 2007-08 Commissioner, Credit Rules, at central 2004 Excise

Central Excise / CENVAT Service Tax 188.78 2008-09 Commissioner, Credit Rules, central 2004 Excise

Central Excise / CENVAT Service Tax 384.47 2009-10 Commissioner, Credit Rules, central 2004 Excise

Income Tax Act, 1961 Income Tax 1.30 2007-08 Commissioner, Deducted at income Tax Source

Rajasthan Sales Tax Act, 1994 Sales Tax 24.73 1997-98 Rajasthan High Court

Gujarat Sales Tax Act,1969 Sales Tax 60.60 2002-03 Jt.Commissioner Rajkot

Gujarat Sales Tax Act,1969 Sales Tax 56.29 2003-04 Jt.Commissioner Rajkot

Gujarat Sales Tax Act, 1969 Sales Tax 21.65 2004-05 Jt.Commissioner Rajkot

Gujarat Value Added Tax Sales Tax 224.59 2006-07 Tribunal, GVAT Act, 2003

10. In respect of accumulated losses and cash losses

The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has incurred cash loss during the year, however there was no cash loss in the immediately preceding financial year.

11. In respect of dues to financial institution / banks / debentures

In accordance with the sanctioned rehabilitation scheme (scheme) approved by Honble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) the repayment schedule of dues to Banks and Financial Institutions has been revised/ rescheduled.

The Companys proposal to Banks and Financial Institutions (Lenders) for One Time Settlement (OTS) of their dues has been accepted by the lenders except New India Assurance Company Limited (NIAC). In respect of NIAC, according to the company, in terms of Scheme, the dues are repayable over a period of seven years beginning from 1.4.2004, the balance of which is under reconciliation. The company has so far not made any repayment of dues of NIAC. The amount of Rs. 34.48 Lacs towards principal and interest was outstanding as on 31st March, 2011.

12. In respect of loans and advances granted on the basis of security.

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

13. In respect of guarantee given for loans taken by others

According to the information and explanation given to us, the company has not provided guarantees for loans taken by others from banks and financial institutions.

14. In respect of application of term loans

The Company has not obtained any term loans during the year.

15. In respect of fund used

According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used for long term investment.

16. In respect of preferential allotment of shares

During the year, 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.

17. In respect of securities created for debentures

There are no debentures issued and outstanding during the year.

18. In respect of end use of money raised by public issues

During the year, the Company has not raised money by public issue(s).

19. In respect of fraud

To the best of our knowledge and belief, and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

20. General

The nature of the Companys activities is such that the requirements of clauses (xiii) and (xiv) of paragraph 4 of the Order are not applicable.

For MANUBHAI & CO.

CHARTERED ACCOUNTANTS Registration No.: 106041W

(K.C. PATEL)

PARTNER MEMBERSHIP NO. 30083

Place: Mumbai Dated: May 3, 2011

---

Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 of the said Order.

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

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

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

III. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with books of account.

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

V On the basis of written representations received from the directors, as on 31st March, 2010, and having regard to clarification issued by Ministry of Law, Justice and Company affairs vide General Circular No. 8/2002 dated 22/03/2002 exempting nominee directors appointed by public financial institutions, central and state governments as well as banks, we report that none of directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Clause (g) of sub Section (1) of Section 274 of the Companies Act, 1956;

VI. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon more particularly note no. 1 (a) and 1 (b) in Schedule 13 regarding rehabilitation scheme sanctioned by Honble AAIFR being under implementation and non-provision of interest of Rs. 346.02 crores claimed by Government of Gujarat with Honble High Court for the reasons stated in the said note, give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of Profit & Loss Account of the Profit for the eighteen months period ended on that date; and

(c) in case of cash flow statement, of the cash flows for the eighteen months period ended on that date. ANNEXURE TO AUDITORS REPORT (Referred to in paragraph (3) of our report of even date)

1. In respect of its fixed assets:

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

(b) The fixed assets have been physically verified by the management during the year. According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. In respect of its inventories:

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3. i) In respect of loans granted to parties covered in the register maintained u/s 301 of the Companies Act,

1956.

The Company has not granted any loans or advances to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, reporting requirements as per clauses (iii) (a) to (iii) (d) of paragraph 4 of the Order are not applicable in case of the company.

ii) In respect of loans taken from parties covered in the register maintained u/s 301 of the Companies Act, 1956.

The Company has not taken any loans or advances in the nature of loans, from parties covered in the register maintainedNunder section 301 of the Companies Act, 1956 and therefore reporting requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of the Order are not applicable in case of company.

4. In respect of internal control

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

5. In respect of transactions need to be entered into a register maintained u/s 301 of the Companies Act, 1956.

In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section .

6. In respect of deposits from public

The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board (the CLB) or National Company Law Tribunal (the NCLT) or Reserve Bank of India (the RBI) or any Court or any other Tribunal.

7. In respect of internal audit system

Internal Audit has been carried out by a firm of chartered accountants. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. In respect of maintenance of cost records

We have broadly reviewed the books of accounts maintained by the Company pursuant to the Order made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records has been made and maintained. We have not, however, made a detailed examination of the records.

9. In respect of statutory dues:

(a) In our opinion and accordins to the information and explanation given to us, the company is generally regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees state insurance, income tax, wealth tax, sales tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable.

In terms of sanctioned rehabilitation scheme, in respect of payment of Deferred Sales Tax, Electricity Duty and Tax thereon, Turnover Tax and Royalty, the Company has made repayments in accordance with the rehabilitation scheme. Consequently the issue of reporting arrears, of such dues as on 31 st March, 2010, remaining outstanding for a period of more than six months is not applicable.

(c) According to the information and explanations given to us, there are no dues of income tax, wealth tax and cess which have not been deposited on account of any dispute. In respect of excise duty, customs duty and sales tax, details of disputed dues not deposited are given hereunder:

Name of the Statute Nature of the Amount Dues (Rs. Lacs)

Central Excise Act, 1944 Excise Duty 36.42

Customs Act, 1962 Custom Duty 35.85

Customs Act, 1962, Custom Duty 1.24

Central Excise / CENVAT Service Tax 68.12 Credit Rules, 2004

Central Excise / CENVAT Service Tax 64.35 Credit Rules, 2004

Central Excise / CENVAT Service Tax 407.84 Credit Rules, 2004

Central Excise / CENVAT Service Tax 180.57 Credit Rules, 2004

Central Excise / CENVAT Service Tax 188.42 Credit Rules, 2004

Central Excise / CENVAT Service Tax 84.62

Credit Rules, 2004

Name of the Statute Period to which Forum where dispute is amount relates pending

Central Excise Act, 1944 1992-93 Customs, Excise & Gold

(Control) Appellate Tribunal

Customs Act,1962 1995-96 Customs, Excise & Gold (Control) Appellate Tribunal

Customs Act, 1962 2008-09 Commissioner (Appeal), Custom

Central Excise/CENVAT 2005-06 Custom, Excise & Service Tax Credit Rules,2004 Appellate Tribunal

Central Excise/ CENVAT 2005-06 Commissioner of Centr al Excise Credit Rules,2004

Central Excise/ CENVAT 2006-07 Commissioner ate Level at Central Credit Rules,2004 Excise

Central Excise/ CENVAT 2007-08 Commissioner, Credit Rules,2004 Central Excise

Central Excise/ CENVAT 2008-09 Commissioner, Credit Rules,2004 Central Excise

Central Excise/ CENVAT 2009-10 Commissioner, Credit Rules,2004 Central Excise

10. In respect of accumulated losses and cash losses

The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the period as well as in the immediately preceding financial year.

11. In respect of dues to financial institution / banks / debentures

In accordance with the sanctioned rehabilitation scheme (scheme) approved by Honble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) the repayment schedule of dues to Banks and Financial Institutions has been revised/ rescheduled.

The Companys proposal to Banks and Financial Institutions (Lenders) for One Time Settlement (OTS) of their dues has been accepted by the lenders except New India Assurance Company Limited (NIAC). in case of lenders who have approved OTS, the company has made repayment of dues as per terms of OTS. In respect of NIAC, according to the company, in terms of Scheme, the dues are repayable over a period of seven years beginning from 1.4.2004, the balance of which is under reconciliation. The company has so far not made any repayment of dues of NIAC. The amount of Rs. 31.02 Lacs towards principal and interest was outstanding as on 31st March, 2010.

12. In respect of loans and advances granted on the basis of security.

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

13. In respect of guarantee given for loans taken by others

According to the information and explanation given to us, the company has not provided guarantees for loans taken by others from banks and financial institutions.

14. In respect of application of term loans

The Company has not obtained any term loans during the year.

15. In respect of fund used

According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used during the year for long term investment.

16. In respect of preferential allotment of shares

During the year, 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.

17. In respect of securities created for debentures

There are no debentures issued and outstanding during the year.

18. In respect of end use of money raised by public issues

During the year, the Company has not raised money by public issue(s).

19. In respect of fraud

To the best of our knowledge and belief, and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

20. General

The nature of the Companys activities is such that the requirements of clauses (xiii) and (xiv) of paragraph 4 of the Order are not applicable.

For MANUBHAI & CO.

Chartered Accountants

Registration No.: 106041W

(K.C. PATEL)

Partner Mumbai: July 29, 2010 Membership No. 30083