Auditor Report of ITD Cementation India Ltd.

Mar 31, 2023

INDEPENDENT AUDITOR’S REPORT

To the Members of

ITD Cementation India Limited

Report on the Audit of the Standalone Financial

Statements

1. OPINION

We have audited the accompanying standalone financial
statements of ITD Cementation India Limited (“the
Company ”), which comprise the standalone Balance
Sheet as at 31 March 2023, and the standalone Statement
of Profit and Loss (including Other Comprehensive
Income), the standalone Statement of Cash Flows and
the standalone Statement of Changes in Equity for the
year then ended, and notes to the standalone financial
statements, including a summary of significant accounting
policies and other explanatory information (hereinafter
referred to as “the standalone financial statements”).

I n 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 Companies Act, 2013 (“the Act”) in
the manner so required and give a true and fair view
in conformity with the Indian Accounting Standards
prescribed under Section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended, (“Ind AS”) and other accounting principles
generally accepted in India, of the state of affairs of the
Company as at 31 March 2023, and its profit (including
other comprehensive income), its cash flows and the
changes in equity for the year ended on that date.

2. BASIS FOR OPINION

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

3. KEY AUDIT MATTERS

Key audit matters are those matters that, in our
professional judgement, were of most significance in our
audit of the standalone financial statements of the current
year. These matters were addressed in the context of our
audit of the standalone financial statements as a whole,
and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.

We have determined the matters described below to be
the key audit matters to be communicated in our report.

4. INFORMATION OTHER THAN THE
STANDALONE FINANCIAL STATEMENTS
AND AUDITOR’S REPORT THEREON

The Company’s Management and Board of Directors
are responsible for the other information. The other
information comprises the information included in
Company’s Annual Report, but does not include the
standalone financial statements and our auditor’s report
thereon.

Our opinion on the standalone financial statements does
not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
The Annual Report is expected to be made available to
us after the date of this auditor’s report.

I n connection with our audit of the standalone financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the standalone
financial statements or our knowledge obtained during
the course of our audit, or otherwise appears to be
materially misstated. When we read the Annual report,
if we conclude that there is a material misstatement
therein, we are required to communicate the matter to
those charged with governance.

5. RESPONSIBILITIES OF MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE FOR
THE STANDALONE FINANCIAL STATEMENTS

The accompanying standalone financial statements have
been approved by the Company’s Board of Directors.
The Company’s Management and Board of Directors are
responsible for the matters stated in Section 134(5) of
the Act with respect to the preparation and presentation
of these standalone financial statements that give a

true and fair view of the financial position, financial
performance including other comprehensive income,
changes in equity and cash flows of the Company in
accordance with the Ind AS and other accounting
principles generally accepted in India. 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 judgements and estimates that are
reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial
statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

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

The Board of Directors is also responsible for overseeing
the Company’s financial reporting process.

6. AUDITORS’ RESPONSIBILITY FOR THE
AUDIT OF THE STANDALONE FINANCIAL
STATEMENTS

Our objectives are to obtain reasonable assurance
about whether the standalone financial statements as a
whole are free from material misstatement, whether due

to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of
users taken on the basis of these standalone financial
statements.

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

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

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

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

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

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

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

We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and

to communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the
key audit matters. We describe these matters in our
auditors’ report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not
be communicated in our report because the adverse
consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.

7. OTHER MATTER

Corresponding figures of the Company for the year ended
31 March 2022 have been audited by another auditor who
expressed an unmodified opinion dated 26 May 2022 on
the standalone financial statements of the Company for
the year ended 31 March 2022.

Our opinion is not modified in respect of these matters.

8. REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS

a) As required by the Companies (Auditors’ Report)
Order, 2020 (“the Order”) issued by the Central
Government of India in terms of Section 143(11) of the
Companies Act, 2013, we give in the “Annexure A”,
a statement on the matters specified in paragraphs
3 and 4 of the Order, to the extent applicable.

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

i. 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.

i i. I n our opinion, proper books of account as
required by law have been kept by the Company
, in electronic mode so far as it appears from
our examination of those books.

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

iv. In our opinion, the aforesaid standalone
financial statements comply with the Ind AS
specified under Section 133 of the Act read with
the Companies (Indian Accounting Standards)
Rules, 2015, as amended.

v. On the basis of the written representations
received from the directors as on 31 March
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on
31 March 2023 from being appointed as a
director in terms of Section 164 (2) of the Act.

vi. With respect to the adequacy of the internal
financial controls with reference to standalone
financial statement of the Company and the
operating effectiveness of such controls, refer
to our separate Report in “Annexure B” to this
report.

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

a) The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statement in
Note 31.

b) The Company did not have any long term
contracts including derivative contracts for
which there were any material foreseeable
losses as at 31st Match 2023.

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

d) (i) The management has represented

that, to the best of its knowledge
and belief and as disclosed in the
Note 44 to the standalone financial
statements, no funds have been
advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities (“Intermediaries”),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, directly
or indirectly lend or invest in other
persons or entities identified in
any manner whatsoever by or on
behalf of the Company (“Ultimate
Beneficiaries”) or provide any
guarantee, security or the like on
behalf of the Ultimate Beneficiaries;

(ii) The management has represented
that, to the best of its knowledge
and belief and as disclosed in the
Note 44 to the standalone financial
statements, no funds have been
received by the Company from any
person(s) or entity(ies), including
foreign entities (“Funding Parties”),
with the understanding, whether
recorded in writing or otherwise,
that the Company shall, directly
or indirectly, lend or invest in other
persons or entities identified in any
manner whatsoever by or on behalf
of the Funding Party (“Ultimate
Beneficiaries”) or provide any

guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
and

(iii) Based on such audit procedures
performed and information and
explanation given, nothing has come
to our notice that has caused us
to believe that the representations
under sub-clause (i) and (ii) contain
any material mis-statement.

e) The final dividend paid by the Company
during the year in respect of the same
declared for the previous year is in
accordance with section 123 of the Act
to the extent it applies to payment of
dividend.

As stated in Note 43 to the standalone
financial statements, the Board of
Directors of the Company have proposed
final dividend for the year which is subject
to the approvals of the members at the
ensuing Annual General Meeting. The
dividend declared is in accordance with
section 123 of the Act to the extent it
applies to declaration of dividend.

f) As proviso to rule 3(1) of the Companies
(Accounts) Rules, 2014 is applicable for
the Company only w.e.f. 1 April 2023,
reporting in respect of mandatory use of
accounting software with requisite audit
trail facility is not applicable.

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

For T R Chadha & Co LLP

Chartered Accountants
Firm Regn. No: 006711N/N500028

Pramod Tilwani

Place: Mumbai Partner

Date: 25 May 2023 Membership No. 076650

DIN: 23076650BGUWKI1581

---

Dec 31, 2016

To

The Members of

ITD Cementation India Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of ITD Cementation India Limited ("the Company"), which comprise the Balance Sheet as at 31 December 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial

Statements

2. 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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

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

4. 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.

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

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

7. 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

8. 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 December 2016, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to Note 38 to the standalone financial statements which describes the uncertainty related to recoverability of long-term trade receivables and unbilled work in progress aggregating to Rs.2,863.37 lakhs (31 December 2015: Rs.2,863.37 lakhs) and Rs.8,677.57 lakhs (31 December 2015: Rs.8,677.57 lakhs) respectively, outstanding as at 31 December 2016, representing various claims recognized during the earlier period based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of litigation, the Company has assessed the recoverability of these claims based on legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in the audited standalone financial statements. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

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

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

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

c. the standalone financial statements 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 (as amended);

e. the matter described in paragraph 9 under the Emphasis of Matter, in our opinion, may have an adverse effect on the functioning of the Company;

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

g. we have also audited the internal financial controls over financial reporting (IFCOFR) of the Company as of 31 December 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 21 February 2017 as per Annexure II expressed an unmodified opinion.

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

i. as detailed in Note 31 (d) to (g) and 38 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

ii. the Company has made provisions as required under applicable law or accounting standards, for foreseeable losses, if any, on long-term contracts. The Company did not have any derivative contracts.

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

Annexure I to the Independent Auditor''s Report of even date to the members of ITD Cementation India Limited, on the standalone financial statements for the year ended 31 December 2016

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

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

(c) The title deeds of all the immovable properties are held in the name of the Company.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion, the Company has complied with the provisions of sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of Company''s products/services 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 cost records with a view to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund,

employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of service tax and duty of customs that have not been deposited with the appropriate authorities on account of any dispute.

The dues outstanding in respect of income-tax, sales-tax, duty of excise and value added tax on account of any dispute, are as follows:

Name of statue	Nature of disputes	Amount (Rs. in lakhs)	Amount Paid Under Protest (Rs. in lakhs)	Period to which the amount relates	Forum where dispute is pending
Sales Tax Act/Works Contract Tax Act	Sales Tax	31.97	-	2004-05	Deputy Commissioner of Commercial Taxes, Bihar
Sales Tax Act/Works Contract Tax Act	Value Added Tax	412.02	-	2011-12 and 2012-13	Additional Commercial Tax Officer, Goa
Sales Tax Act/Works Contract Tax Act	Value Added Tax	790.65	72.06	2009-10, 2010-11 and 2011-12	Joint Commissioner of Commercial Taxes, Rajkot
Sales Tax Act/Works Contract Tax Act	Value Added Tax	478.17	70.00	2012-13	The West Bengal Taxation Tribunal, Salt Lake Kolkata
Sales Tax Act/Works Contract Tax Act	Sales Tax	16.60	-	1994-95	Revision Board (Tribunal) Kolkata
Sales Tax Act/Works Contract Tax Act	Value Added Tax	10.38	2.70	2005-06	The Joint Commissioner, Sales Tax, Mumbai
Sales Tax Act/Works Contract Tax Act	Sales Tax/ Value Added Tax	100.29	25.07	2006-07, 2007-08, 2008-09 and 2009-10	Appellate Deputy Commissioner of Commercial Taxes, Tamil Nadu
Sales Tax Act/Works Contract Tax Act	Value Added Tax	235.53	-	2012-13	Deputy Commissioner, Uttar Pradesh
Sales Tax Act/Works Contract Tax Act	Sales Tax/ Value Added Tax	714.58		2004-05, 2006-07, 2007-08, 2010-11 and 2011-12	Appellate and Revisional Board, West Bengal
Sales Tax Act/Works Contract Tax Act	Value Added Tax	44.09	-	2008-09	West Bengal Taxation Tribunal
Sales Tax Act/Works Contract Tax Act	Value Added Tax	307.59	-	2013-14	Senior Joint Commissioner Appeals, West Bengal
Sales Tax Act/Works Contract Tax Act	Sales Tax	0.15	-	1999-00	Joint Commissioner of Commercial Taxes, Bihar
Sales Tax Act/Works Contract Tax Act	Sales Tax	0.19	-	2005-06	Assistant Commissioner, Rajasthan
Sales Tax Act/Works Contract Tax Act	Sales Tax	0.68	0.34	2003-04	Assistant Commissioner of Sales Tax, Orissa
Sales Tax Act/Works Contract Tax Act	Sales Tax	4.29	-	1997-98 and 2007-08	Deputy Commissioner of Commercial Taxes, Uttar Pradesh
Central Excise Act,1944	Excise Duty	51.70	-	May 1998 to January 1999	Commissioner of Central Excise
Income Tax Act, 1961	Income Tax	210.75	-	A.Y. 2004-05	High Court, Mumbai
Income Tax Act, 1961	Income Tax	161.30	-	A.Y. 2012-13 and A.Y. 2013-14	Commissioner of Income Tax (Appeals), Mumbai
Income Tax Act, 1961	Income Tax	153.64	-	A.Y. 2013-14	Commissioner of Income Tax (Appeals), Kolkata
Income Tax Act, 1961	Income Tax	286.84	-	A.Y. 2011-12 & A.Y. 2012-13	Income Tax Appellate Tribunal, Kolkata
Income Tax Act, 1961	Income Tax	206.69	-	A.Y. 2010-11 & A.Y. 2011-12	Income Tax Appellate Tribunal, Mumbai
Income Tax Act, 1961	Income Tax	0.63	-	A.Y. 2010-11	Assessing Officer, Mumbai

(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government during the year. The Company did not have any outstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purpose for which the loans were obtained.

(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) In our opinion, managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion, the Company has not entered into any noncash transactions with directors or persons connected with them covered under Section 192 of the Act.

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

Annexure II

Independent Auditor''s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statements of ITD Cementation India Limited ("the Company") as at and for the year ended 31 December 2016, we have audited the internal financial controls over financial reporting (IFCOFR) of the company as at that date.

Management''s Responsibility for Internal Financial Controls

2. The Company''s Board of Directors 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 the company''s business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on the Company''s IFCOFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCOFR, and Guidance Note 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 IFCOFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCOFR and their operating effectiveness. Our audit of IFCOFR included obtaining an understanding of IFCOFR, 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.

5. 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 IFCOFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s IFCOFR 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 IFCOFR 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

7. Because of the inherent limitations of IFCOFR, 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 IFCOFR to future periods are subject to the risk that IFCOFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 December 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm''s Registration No.: 001076N/N500013

per Sudhir N. Pillai

Place : Mumbai Partner

Date : 21 February 2017 Membership No.: 105782

---

Dec 31, 2014

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

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error In making those risk assessments, the auditor considers internal 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 Company''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.

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

Basis for Qualified Opinion

6. As stated in Note 36 to the Financials Statements, the company''s trade receivables and unbilled work in progress as at 31 December, 2014 include amounts aggregating Rs. 2,655 lakhs and Rs. 1,584 lakhs respectively, being considered as good and fully recoverable by the management. These amounts are presently under negotiation with the customers. In the absence of external balance confirmations from the customers or other alternative audit evidence to corroborate management''s assessment of recoverability of these balances and having regard to the age of these receivables, we are unable to comment on the extent to which these balances are recoverable and the consequential impact, if any, on the accompanying financial statements.

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph 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:

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

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

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

Emphasis of Matter

8. We draw attention to Note 37 to the financial statements regarding long-term trade receivables, trade receivables and unbilled work in progress aggregating to Rs. 2,863 lakhs (31 December20l3: Rs. Nil), Rs. 8,52l lakhs (31 December 2013:Rs. 11,099 lakhs) and Rs. 25,467 lakhs (31 December 2013: Rs. 25,507 lakhs) respectively outstanding as at 31 December 2014, representing various claims recognised during the earlier year based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of arbitration/ litigation, the Company has assessed the recoverability of these claims based on recommendation of Dispute Resolution Board, awards received from Arbitration Tribunal, High Court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in the Financial Statement. Our opinion is not modified in respect of these matters.

9. We draw attention to Note 38 to the financial statements which describe the uncertainty related to the recoverability of short- term advances aggregating to Rs. 6,8I9 lakhs to ITD Cemindia JV, Company''s Joint Venture. The recoverability of these advances is majorly dependent on the Joint Venture''s ability to realize the outstanding dues from its customer which are presently under litigation. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. 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

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

a. Except for the matter described in the basis for Qualified Opinion paragraph, 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 financial statements dealt with by this report are in agreement with the books of account;

d. Except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph, in our opinion, the financial statements comply with the Accounting Standards notified under the Companies Act, I 956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 ; and

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

Annexure to the Independent Auditors'' Report of even date to the members of ITD Cementation India Limited, on the financial statements for the year ended 31 December 2014.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

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

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly the provisions of clauses 4(iii)(b) to 4(iii) (d) of the Order are not applicable.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Hfive lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly the provisions of clause 4(vi) of the Order are not applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause

(d) of sub-section (1) of Section 209 of the Act in respect of Company''s services 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 cost records with a view to determine whether they are accurate or complete.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax and excise duty on account of any dispute, is as follows:

Name of statue Nature of Amount Amount disputes (Rs.) under protest (Rs. )

Sales Tax Act/Works Sales Tax 1,659,990 - Contract Tax Act

Sales Tax Act/Works Sales Tax 67,914 34,000 Contract Tax Act

Sales Tax Act/Works Sales Tax 408,950 - Contract Tax Act

Sales Tax Act/Works VAT 26,580,593 - Contract Tax Act

Sales Tax Act/Works VAT 12,960,122 1,991,029 Contract Tax Act Sales Tax Act/Works VAT 632,339 - Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 - Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 - Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 - Contract Tax Act

Sales Tax Act/Works Sales Tax 4,528,910 - Contract Tax Act

Sales Tax Act/Works Sales Tax 3,267,931 - Contract Tax Act

Sales Tax Act/Works Sales Tax 20,076 - Contract Tax Act

Sales Tax Act/Works Sales Tax/CST/ 38,706,490 - Contract Tax Act VAT

Sales Tax Act/Works Sales Tax 8,319,618 117,125 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,709,364 - Contract Tax Act

Sales Tax Act/Works VAT/ Entry Tax 95,565,080 - Contract Tax Act

Sales Tax Act/Works VAT 63,226,914 - Contract Tax Act

Sales Tax Act/Works VAT 7,983,049 2,394,916 Contract Tax Act

Sales Tax Act/Works VAT 1,038,399 - Contract Tax Act

Central Excise Act,l944 Excise Duty 5,169,538 -

Income Tax Act, 1961 Income tax 29,622,346 -

Income Tax Act, 1961 Income Tax 54,408,408 -

Income Tax Act, 1961 Income Tax 62,952 -

Income Tax Act, 1961 Income Tax 13,784,674 -

Income Tax Act, 1961 Income Tax 27,212,390 -

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

Sales Tax Act/Works YE. 1994-95 Revision Board (Tribunal), Contract Tax Act Kolkata Sales Tax Act/Works YE. 2003-04 Assistant Commissioner of Contract Tax Act Sales Tax, Orissa

Sales Tax Act/Works YE. 1997-98 Deputy Commissioner of Contract Tax Act Commercial Taxes

Sales Tax Act/Works YE. 2011-12 Joint Commissioner sales tax, Contract Tax Act West Bengal

Sales Tax Act/Works YE. 2009-10 Joint Commissioner of Contract Tax Act Commercial Taxes, Rajkot Sales Tax Act/Works YE. 2010-11 Joint Commissioner (Appeals) Contract Tax Act Rohtak

Sales Tax Act/Works YE. 2005-06 Assistant Commissioner, Contract Tax Act Rajasthan

Sales Tax Act/Works YE. 2004-05 Assistant Commissioner of Contract Tax Act Commercial Taxes, Bihar

Sales Tax Act/Works YE. 2003-04 Joint Commissioner of Contract Tax Act Commercial Taxes, Bihar

Sales Tax Act/Works YE. 2005-06 Taxation appellate tribunal, Contract Tax Act Patna

Sales Tax Act/Works YE. 1999-00, Joint Commissioner of Contract Tax Act 2008-09 Commercial Taxes, Bihar

Sales Tax Act/Works April 2007 to Assistant Commissioner of Contract Tax Act December 2007 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works YE. 2004-05, Appellate and revisional Contract Tax Act 2006-07, board, West Bengal 2007-08, 2008-09

Sales Tax Act/Works YE. 2006-07, Appellate Tribunal,Tamil Nadu Contract Tax Act 2007-08 & 2008-09

Sales Tax Act/Works YE. 2009-10 Appellate Deputy Contract Tax Act Commissioner of Commercial Taxes

Sales Tax Act/Works YE. 2009-10 Deputy Commissioner of Contract Tax Act and 2010-11 Commercial Taxes, Allahabad

Sales Tax Act/Works YE. 2009-10 Commissioner, Commercial Contract Tax Act & 2010-11 Taxes, Kolkata

Sales Tax Act/Works YE. 2006-07 Assistant Commissioner Contract Tax Act & 2007-08 (Appeals), Commercial Taxes, Ernakulam

Sales Tax Act/Works YE. 2005-06 Maharashtra Sales Tax Contract Tax Act Tribunal, Mumbai

Central Excise Act,l944 May 1998 to Commissioner of Central January 1999 Excise

Income Tax Act, 1961 A.Y 2003-04 and High Court, Mumbai 2004-05

Income Tax Act, 1961 A.Y 2008-09 Income Tax Appellate Tribunal

Income Tax Act, 1961 A.Y 2010-11 Assessing Officer Mumbai

Income Tax Act, 1961 A.Y 2011-12 Income Tax Appellate Tribunal

Income Tax Act, 1961 A.Y 2010-11 Commissioner of Income Tax & 2012-13 (Appeals)

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial yean

(xi) In our opinion, the Company has not defaulted in repayment of dues to any financial institution or a bank or to debenture- holders during the year

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Order are not applicable.

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

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Order are not applicable.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the yean Accordingly the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year Accordingly the provisions of clause 4(xx) of the Order are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co LLP (Formerly Walker, Chandiok & Co.) Chartered Accountants Firm Registration No.: 00I076N/N5000I3

per Amyn Jassani Partner Membership No.: 46447

Mumbai 24 February 2015

---

Dec 31, 2013

1. We have audited the accompanying financial statements of ITD Cementation India Limited ("the Company"), which comprise the Balance Sheet as at 31 December 2013, 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

2. Management is responsible for the preparation of these financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 Company''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.

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

Opinion

6. 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:

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

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

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

Emphasis of Matter

7. We draw attention to Note 36 to the financial statement regarding trade receivables and unbilled work in progress aggregating to Rs. 11,099 lakh (31 December 2012: Rs. 8,727 lakh) and Rs. 25,507 lakh (31 December 2012: Rs. 8,686 lakh) respectively, outstanding as at 31 December 2013, representing various claims recognised during the earlier period based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of arbitration/ litigation, the Company has assessed the recoverability of these claims based on recommendation of Dispute Resolution Board, awards received from Arbitration Tribunal, High Court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in the Financial Statement. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

8. 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.

9. 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 financial statements dealt with by this report are in agreement with the books of account;

d. in our opinion, the financial statements comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 ; and

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

Annexure to the Independent Auditors'' Report of even date to the members of ITD Cementation India Limited on the financial statements for the year ended 31st December 2013

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

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

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to 4(iii)(d) of the Order are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii) (f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

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

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

(viii) According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 have become applicable to the Company during the previous year and the said rules have not prescribed any specific formats for the cost statements relating to company''s operations. In terms with the clarification issued by the Ministry of Corporate Affairs, the management believes that its records currently maintained by Company provide the information required under the said rules. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s operations 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 cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax and excise duty on account of any dispute, is as follows:

Name of the statute Nature of Amount (Rs.) Amount paid Period to which dues under protest the amount (Rs.) relates

Sales Tax Act/Works Sales Tax 1,659,990 - Y.E. 1994-95 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,323,383 34,000 Y.E. 2003-04 & Contract Tax Act 2004-05

Sales Tax Act/Works Sales Tax 408,950 - Y.E. 1997-98 Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 - Y.E. 2005-06 Contract Tax Act

Sales Tax Act/Works Sales Tax 15,450 - Y.E. 1999-00 Contract Tax Act

Sales Tax Act/Works Sales Tax 5,648,597 1,412,150 Y.E. 2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 - Y.E. 2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 32,041,940 - Y.E. 2006-07 & Contract Tax Act 2007-08

Sales Tax Act/Works Sales Tax 468,499 117,125 Y.E. 2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 - Y.E.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 115,262,781 - March 2007 Contract Tax Act to September 2010

Sales Tax Act/Works Sales Tax 7,781,391 - Y.E. 2005-06 & Contract Tax Act 2008-09

Sales Tax Act/Works Sales Tax 20,076 - April 2007 to Contract Tax Act December 2007

Sales Tax Act/Works Sales Tax 4,409,081 - Y.E.2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 7,851,119 - Y.E. 2007-08 & Contract Tax Act 2008-09

Sales Tax Act/Works Sales Tax 1,709,364 - Y.E.2009-10 Contract Tax Act

Sales Tax Act/Works VAT/ Entry 89,650,000 - Y.E. 2009-10 Contract Tax Act Tax

Sales Tax Act/Works VAT 63,226,914 - Y.E. 2009-10 & Contract Tax Act 2010-11

Sales Tax Act/Works VAT 7,983,049 2,394,916 Y.E. 2006-07 & Contract Tax Act 2007-08

Sales Tax Act/Works VAT 1,038,399 - Y.E. 2005-06 Contract Tax Act

Central Excise Act, Excise Duty 5,169,538 - May 1998 to 1944 January 1999

Income Tax Act, 1961 Income Tax 21,075,346 - A.Y.2004-05

Income Tax Act, 1961 Income Tax 54,408,408 - A.Y. 2008-09 Income Tax Act, 1961 Income Tax 21,585,017 - A.Y.2007-08 to 2011-12



Name of the statute Forum where dispute is pending

Sales Tax Act/Works Revision Board (Tribunal), Kolkata Contract Tax Act

Sales Tax Act/Works Assistant Commissioner of Sales Tax contract Tax Act

Sales Tax Act/WOrks Deputy Commissioner of Commercial Taxes Contract Tax Act

Sales Tax Act/Works Assistant Commissioner , Rajasthan contract Tax Act

Sales Tax Act/Works Joint Commissioner of Commercial Taxes contract Tax Act

Sales Tax Act/Works Excise and Taxation Commissioner, Punjab Contract Tax Act

Sales Tax Act/Works Assistant Commissioner of Commercial Contract Tax Act Taxes, Bihar

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, West Bengal

Sales Tax Act/Works Assistant Commissioner of Commercial contract Tax Act Taxes, Tamil Nadu

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, Bihar

Sales Tax Act/Works Appellate Deputy Commissioner, contract Tax Act Andhra Pradesh

Sales Tax Act/Works Joint Commissioner of Commercial contract Tax Act Taxes, Bihar

Sales Tax Act/Works Assistant Commissioner of Commercial contract Tax Act Taxes, Uttar Pradesh

Sales Tax Act/Works Appellate And Taxation Tribunal High contract Tax Act Court, Tamil Nadu

Sales Tax Act/Works Appellate Deputy Commissioner of contract Tax Act Commercial Taxes

Sales Tax Act/Works Deputy Commissioner of Commercial contract Tax Act Taxes, Allahabad

Sales Tax Act/ Works Commissioner, Commercial Taxes, Kolkata contract Tax Act

Sales Tax Act/Works Assistant Commissioner (Appeals), contract Tax Act Commercial Taxes, Ernakulam

Sales Tax Act/Works Joint Commissioner of Sales Tax, Mumbai contract Tax Act

Central Excise Commissioner of Central Excise Act. 1944

Income Tax Act,1961 High Court, Mumbai

Income Tax Act,1961 Income Tax Appellate Tribunal

Income Tax Act,1961 Commissioner of Income Tax (Appeals)

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

(xi) The Company has not defaulted in repayment of dues to any bank or financial institution during the year. The Company did not have any outstanding debentures during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

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

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co

Chartered Accountants

Firm Registration No.: 001076N

per Amyn Jassani

Partner

Membership No.: F-46447

Mumbai

26 February 2014

---

Dec 31, 2012

1. We have audited the attached Balance Sheet of ITD Cementation India Limited, (the ''Company'') as at 31 December2012, and also the Statement of Prof t and Loss and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the ''f nancial statements''). These f nancial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these f nancial statements based on our audit.

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

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

4. We draw attention to notes 36 to 40 to the financial statements regarding trade receivables and un-billed work in progress aggregating to Rs. 8,727 lakhs and Rs. 8,686 lakhs (31 December 2011: Rs. 8,288 lakhs and Rs. 8,686 lakhs) respectively,outstanding as at 31 December 2012, representing various claims recognised during the earlier period based on the terms and conditions implicit in the contracts. These claims being technical in nature and being subject matter of litigation, the Company has assessed the recoverability of these claims based on recommendation of dispute resolution board, awards received from arbitration tribunal, high court orders received and legal opinion from an independent counsel. On the basis of such assessment, management is of the opinion that the claims are tenable and would be realized in full and accordingly no adjustments have been made in these financial statements.

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

c. The f nancial statements dealt with by this report are in agreement with the books of account;

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

e. In our opinion and to the best of our information and according to the explanations given to us, the financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act and the Rules framed there under and 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, in the case of:

(i) the Balance Sheet, of the state of affairs of the Company as at 31 December 2012;

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

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

Annexure to the Auditors'' Report of even date to the members of ITD Cementation India Limited on the f nancial statements for the year ended 31 December 2012

Based on the audit procedures performed for the purpose of reporting a true and fair view on the f nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The fixed assets have been physically verif ed by the management during the year and no material discrepancies were noticed on such verif cation. In our opinion, the frequency of verif cation of the f xed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of f xed assets has not been disposed of during the year.

(ii) (a) The management has conducted physical verif cation of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verif cation.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, f rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to 4(iii)(d) of the Order are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, f rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, 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 f xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees f ve lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

(viii) According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 have become applicable to the Company during the current year and the said rules have not prescribed any specif c formats for the cost statements. In terms with the clarif cation issued by the Ministry of Corporate Af airs, the management believes that its records currently maintained by Company provide the information required under the said rules. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s operations 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 cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of wealth tax, service tax, customs duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of sales-tax, income-tax, excise duty on account of any dispute, is as follows:

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

Sales Tax Act/Works Sales Tax 1,659,990 Y.E. 1994-95 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,289,383 Y.E. 2003-04 & 2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 408,950 Y.E. 1997-98 Contract Tax Act

Sales Tax Act/Works Sales Tax 18,500 YE.2005-06 Contract Tax Act

Sales Tax Act/Works Sales Tax 15,450 Y.E. 1999-00 Contract Tax Act

Sales Tax Act/Works Sales Tax 4,236,447 YE.2006-07 Contract Tax Act

Sales Tax Act/Works Sales Tax 3,196,927 YE.2004-05 Contract Tax Act

Sales Tax Act/Works Sales Tax 32,041,940 Y.E. 2006-07 & 2007-08 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,112,354 YE.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 4,68,499 Y.E. 2007-08 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 2,254,954 YE.2003-04 Contract Tax Act

Sales Tax Act/Works Sales Tax 115,262,781 March 2007 to September Contract Tax Act 2010

Sales Tax Act/Works Sales Tax 7,781,391 Y.E. 2005-06 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 20,076 April 2007 to December Contract Tax Act 2007

Sales Tax Act/Works Sales Tax 44,09,081 YE.2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 7,851,119 Y.E. 2007-08 & 2008-09 Contract Tax Act

Sales Tax Act/Works Sales Tax 1,709,364 YE.2009-10 Contract Tax Act

Sales Tax Act/Works Sales Tax 23,208,189 YE.2008-09 Contract Tax Act

Sales Tax Act/Works Entry Tax 1,150,000 YE.2008-09 Contract Tax Act

Central Excise Duty Excise Duty 5,169,538 May 1998 to January 1999

Income Tax Act, 1961 Income Tax 53,030,830 YE.2004-05

Income Tax Act, 1961 Income Tax 7,737,391 YE.2007-08, 2008-09 & 2009-10

Name of the Statute Forum where dispute is pending

Sales Tax Act/ Works Contract Tax Act Revision Board (Tribunal), Kolkata

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Sales Tax

Sales Tax Act/ Works Contract Tax Act Deputy Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner , Rajasthan

Sales Tax Act/ Works Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Excise and Taxation Commissioner, Punjab

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Bihar

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes, West Bengal

Sales Tax Act/ Works Contract Tax Act Commercial Tax Of cer , Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes, Bihar

Sales Tax Act/ Works Contract Tax Act Appellate Deputy Commissioner,Andhra Pradesh

Sales Tax Act/ Works Contract Tax Act Joint Commissioner of Commercial Taxes,Bihar

Sales Tax Act/ Works Contract Tax Act Assistant Commissioner of Commercial Taxes, Uttar Pradesh

Sales Tax Act/ Works Contract Tax Act Appellate And Taxation Tribunal

Sales Tax Act/ Works Contract Tax Act High Court, Tamil Nadu

Sales Tax Act/ Works Contract Tax Act Appellate Deputy Commissioner of Commercial Taxes

Sales Tax Act/ Works Contract Tax Act Additional Commissioner, Uttar Pradesh

Sales Tax Act/ Works Contract Tax Act Additional Commissioner, Uttar Pradesh

Central Excise Duty Commissioner of Central Excise

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

(x) In our opinion, the Company has no accumulated losses at the end of the f nancial year and it has not incurred cash losses in the current and the immediately preceding f nancial year.

(xi) In our opinion, the Company has not defaulted in repayment of dues to a f nancial institution or a bank or debenture-holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

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

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) Except as referred in Note 47 to the f nancial statements, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co

Chartered Accountants

Firm Registration No.: 001076N

per Amyn Jassani

Partner

Membership No.: F-46447

Place : Mumbai

Date : 28 February 2013

---

Dec 31, 2011

1. We have audited the attached balance sheet of ITD Cementation India Limited ('the Company') as at December 31, 2011 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Without qualifying our report, we draw attention to :

i. Schedule 20 (x)(a) and (b) of the financial statements which states that sundry debtors at December 31, 2011 include Rs. 1,449 lakhs (previous year Rs. 2,964 lakhs) relating to price escalation and variation claims which are disputed by the customer. These claims are in various stages of litigation and the reliability of these amounts is dependent upon these matters being finally resolved in favor of the Company.

ii. Schedule 20(xi) of the financial statements which states that work-in-progress at December 31, 2011 includes Rs 2,757 lakhs (previous year Rs 2,757 lakhs) in respect of a contract which has been rescinded by the Company and Rs 5,929 lakhs (previous year Rs 5,929 lakhs) in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs (previous year Rs 616 lakhs) and Rs. 2,227 lakhs (previous year Rs. 2,227 lakhs) for these contracts respectively. The Company has made claims against the customer to recover these amounts and intends to pursue these matters, if necessary, through legal action. Based upon legal advice received, management is reasonably conf dent of recovery of these amounts of work in progress and consequently no changes have been made to the values and classification of these amounts in the financial statements. The recovery of these amounts is dependent upon these matters ultimately being resolved in favor of the Company.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

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

v. On the basis of the written representations received from the directors, as on December 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December

31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. a. As described in Schedule 20(xii)to the financial statements, sundry debtors at December 31, 2011 include variation claims of Rs. 3,455 lakhs (previous year Rs. 3,910 lakhs) which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (previous year Rs. 2,346 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,109 lakhs (previous year Rs. 1,564 lakhs) which have since been challenged by the customer (previous year Rs 1,109 lakhs challenged by the customer). Our audit report on the financial statements for the year ended December 31, 2010 was also qualified in respect of this matter;

b. As described in Schedule 20(xiii) to the f nancial statements, sundry debtors at December 31, 2011 include Rs. 3,384 lakhs (previous year Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31, 2010 was also qualified in respect of this matter;

c. In our view there is an uncertainty in respect of reliability of the claims and receivables described in paragraphs vi (a) and (b) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable to comment on the adjustments, if any, that may be necessary to revenue, sundry debtors, the profit before tax, reserves and earnings per share reported in the financial statements for the years ended December 31, 2011 and December 31, 2010;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and, subject to our comments in paragraph 5 (vi) above, the impact of which on the financial statements cannot be ascertained, 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 af airs of the Company as at December 31, 2011;

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

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

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

Re: ITD Cementation India Limited ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verify action.

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

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verify action is reasonable.

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

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

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

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

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

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

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

(c) According to the records of the Company, there are no dues of wealth-tax, service tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues Amount Period to which the amount Forum where dispute is pending (Rs) relates

Sales Tax Act / Works Tax 1,659,990 Year ended Revision Board (Tribunal) Kolkata Contract Tax Act March 31, 1995

Sales Tax Act / Works Tax 33,914 Year ended Assistant Co -mmissioner of Sales Contract Tax Act March 31, 2004 Tax

Sales Tax Act / Works Tax and Penalty 2,255,469 Year ended Assistant Commissioner of Contract Tax Act March 31, 2005 Commercial Taxes

Sales Tax Act / Works Tax 408,950 Year ended Deputy Commi -ssioner of Contract Tax Act March 31, 1998 Commercial Taxes

Sales Tax Act / Works Tax 18,500 Year ended Assistant C -ommissioner, Rajasthan

Contract Tax Act March 31, 2006

Sales Tax Act / Works Penalty 15,450 Year ended Assistant Co mmissioner of Contrac Tax Act March 31, 2000 Commercial Taxes

Sales Tax Act / Works Tax 4,236,447 Year ended March 31, 2007 Excise and Taxation Offi cer, Punjab Contract Tax Act

Sales Tax Act / Works Tax 3,196,927 Year ended Assistant Co -mmissioner of Contract Tax Act March 31, 2005 Commercial T -axes, Bihar

Sales Tax Act / Works Tax 5,667,105 Year ended Deputy Commi -ssioner of Contract Tax Act March 31, 2007 Commercial T -axes, West Bengal

Sales Tax Act / Works Tax 1,112,354 Year ended Commercial T -ax Offi cer, Contract T ax Act March 31, 2004 Tamil Nadu

Sales Tax Act / Works Tax 295,916 Period from April 1, 2007 to Commercial -Tax Offi cer, Contract Tax Act March 31, 2009 Tamil Nadu

Sales Tax Act / Works Tax 2,254,954 Year ended Asst Commis -sioner of Commercial Contract Tax Act March 31, 2004 Taxes,Bihar

Sales Tax Act / Works Tax 26,325,047 Year ended Commercial T -ax Offi cer, West

Contract Tax Act March 31, 2008 Bengal Central Sales Tax Tax 49,788 Year ended Commercial T -ax Offi cer, West March 31, 2008 Bengal

Sales Tax Act / Works Tax 152,480,520 Period from March 2007 to Deputy Commissioner of Contract Tax Act September 2010 Commercial T -axes, Andhra Pradesh

Sales Tax Act / Works Penalty 75,438,787 Period from March 2007 to Assistant Co -mmissioner of Contract Tax Act September 2010 Commercial T -axes, Andhra

Pradesh Sales Tax Act / Works Tax 3,252,481 Year ended Assistant Commissioner of

Contract Tax Act March 2009 Commercial T -axes, Bihar_

Sales Tax Act / Works Tax 20,076 Period from April 2007 to Assistant Commissioner of

Contract Tax Act December 2007 Commercial T -axes, Uttar Pradesh

Sales Tax Act / W orks Tax 136,241,989 Year ended Excise and T -axation Of cer,

Contract Tax Act March 2008 Haryana

Sales Tax Act / Works Tax 4,528,910 Year ended Joint Commis -sioner of

Contract Tax Act March 2006 Commercial Taxes, Bihar

Sales Tax Act / Works Tax 2,890,752 Year ended Deputy Commi -ssioner of

Contract Tax Act March 2009 Commercial T -axes, West Bengal

Central Excise Duty Duty 5169,538 Period from May 1998 to Commissioner Offi central Excise January 1999

Income Tax Act, 1961 Tax dema -nded 53,030,830 Year ended Commissioner of Income Tax - on assess -ment March 31, 2004 (Appeals) u/s 144

Income Tax Act, 1961 Tax dema -nded 151,511,711 Year ended ITAT on asses -sment March 31, 2005 u/s 143(3)

Income Tax Act, 1961 Tax dema -nded 21,746,692 Year ended ITAT on asses -sment March 31, 2006 u/s 144_

Income Tax Act, 1961 TDS tax 7,737,391 Year ended Commissioner of Income Tax - deman -ded on March 31, 2007 to March 31, (Appeals) assess -ment 2009

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

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

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by an unincorporated joint ventures of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

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

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

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

(xix) The Company did not have any outstanding debentures during the year.

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

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

For S.R. Batliboi & Associates

Firm Registration No. 101049W

Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai

February 29, 2012

---

Dec 31, 2010

1. We have audited the attached balance sheet of ITD Cementation India Limited (the Company) as at December 31,2010 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Without qualifying our report, we draw attention to :

i. Schedule 20 (x) of the financial statements which states that sundry debtors at December 31, 2010 include Rs. 2,964 lakhs (previous year Rs. 2,655 lakhs) relating to price escalation and variation claims which are disputed by the customer. These claims are in various stages of litigation and the realisability of these amounts is dependent upon these matters being finally resolved in favour of the Company. Of this an amount of Rs. 309 lakhs was a subject matter of qualification in the previous year.

ii. Schedule 20 (xi) of the financial statements which states that work-in-progress at December 31, 2010 includes Rs. 1,812 lakhs, in respect of a contract which has been rescinded by the Company and Rs. 2,174 lakhs in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs and Rs. 2,227 lakhs. The Company intends to pursue these matters, if necessary, through litigation. The realisability of these amounts is dependent upon these matters ultimately being resolved in favour of the Company. Based upon legal/expert advice received, management is reasonably confident of recovery of these amounts of work in progress.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

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

v. On the basis of the written representations received from the directors, as on December 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. a. As described in Schedule 20 (xii)to the financial statements, sundry debtors at December 31,2010 include variation claims ofRs. 3,910 lakhs (previous year Rs. 5,042 lakhs) which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (previous year Rs. 2,801 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,564 lakhs (previous year Rs. 2,241 lakhs) of which, an amount ofRs. 1,109lakhs (previousyearRs. 2,241 lakhs) havesince been challengedby the customer.Our audit report on the financial statements for the year ended December 31,2009 was also qualified in respect of this matter,

b. As described in Schedule 20 (xiii) to the financial statements, sundry debtors at December 31,2010 include Rs.3,384 lakhs (previous year Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31,2009 was also qualified in respectofthis matter;

c. In our view there is an uncertainty in respect of readability of the claims and receivables described in paragraphs vi (a) and (b) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable tocomment on the adjustments,ifany,that may be necessary to revenue, sundry debtors,the profit before tax,reserves and earnings per share reported in the financial statements for the years ended December 31,2010 and December 31,2009;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and, subject to our comments in paragraph 5 (vi) above, theimpactofwhich on the financial statements cannot be ascertained, 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 December 31, 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: ITD Cementation India Limited (the Company)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification. -

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

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

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

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

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

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

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

(c) According to the records of the Company, there are no dues of wealth-tax, service tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues [Amount (Rs.)

Sales Tax Act / Works Tax 3,175,428 Contract Tax Act

Sales Tax Act / Works Tax 67,914 Contract Tax Act

Sales Tax Act / Works Tax and Penalty 2,255,469 Contract Tax Act

Sales Tax Act / Works Tax 408,950 Contract Tax Act

Sales Tax Act / Works Tax 18,500 Contract Tax Act

Sales Tax Act / Works Penalty 15,450 Contract Tax Act

Sales Tax Act / Works Tax 5,648,597 Contract Tax Act

Sales Tax Act / Works Tax 3,196,927 Contract Tax Act

Sales Tax Act / Works Tax 5,667,105 Contract Tax Act

Sales Tax Act / Works Tax 1,125,354 Contract Tax Act

Sales Tax Act / Works Tax 295,916 Contract Tax Act

Sales Tax Act / Works Tax 2,254,954 Contract Tax Act

Sales Tax Act / Works Tax 26,325,047 Contract Tax Act

Central Sales Tax Tax 49,788

Central Excise Duty Duty 5,169,538

Income Tax Act, 1961 Tax demanded on 53,030,830 assessment u/s 144

Income Tax Act, 1961 Tax demanded on 151,511,711 assessment u/s 143(3)

Income Tax Act, 1961 Tax demanded on 21,746,692 assessment u/s 144



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

Sales Tax Act / Works Contract Tax Act Year ended Revision Board (Tribunal) March 31, 1995 Kolkatta

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner March 31, 2004 of Sales Tax

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2005 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Deputy Commissioner of March 31,1998 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner, March 31,2006 Rajasthan

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2000 Commercial Taxes

Sales Tax Act / Works Contract Tax Act Year ended Excise and Taxation Officer, March 31, 2007 Punjab

Sales Tax Act / Works Contract Tax Act Year ended Assistant Commissioner of March 31,2005 Commercial Taxes, Bihar

Sales Tax Act / Works Contract Tax Act Year ended Deputy Commissioner of March 31,2007 Commercial Taxes, West Bengal

Sales Tax Act / Works Contract Tax Act Year ended Commercial Tax Officer, March 31,2004 Tamil Nadu

Sales Tax Act / Works Contract Tax Act Period from April 1, 2007 Commercial Tax Officer, to March 31, 2009 Tamil Nadu

Sales Tax Act / Works Contract Tax Act Year ended Asst Commissioner of March 31,2004 Commercial Taxes, Bihar

Sales Tax Act / Works Contract Tax Act Year ended Commercial Tax Officer, March 31,2008 West Bengal

Central Sales Tax Year ended Commercial Tax Officer, March 31,2008 West Betngal

Central Excise Duty Period from May 1998 Commissioner of Central to January 1999 Excise

Income Tax Act, 1961 Year ended Commissioner of Income March 31,2004 Tax - (Appeals)

Income Tax Act, 1961 Year ended ITAT March 31,2005

Income Tax Act, 1961 Year ended ITAT March 31, 2006

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

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

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by an unincorporated joint venture of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

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

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

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

(xix) The Company did not have any outstanding debentures during the year.

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

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

For S. R. Batliboi & Associates

Firm registration number: 101049W

Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai February 24, 2011

---

Dec 31, 2009

1. We have audited the attached balance sheet of ITD Cementation India Limited (the Company) as at December 31, 2009 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 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we draw attention to:

i. Note 29 to the financial statements. According to this, the Company has in prior years recognized price escalation claims on two road contracts which were disputed by the customer. For the period from inception of the contract to December 31, 2009 the aggregate claims recognised as revenue amount to Rs. 2,028 lakhs (previous year Rs. 2,028 lakhs). Sundry debtors at December 31, 2009 include Rs. 1,140 lakhs (previous year Rs. 1,140 lakhs) in respect of these escalation claims. The Company has received favourable verdicts in the Dispute Redressal Board and thereafter in Arbitration in respect of these amounts. The Company has till date not recovered these amounts. The Customer has appealed against the Arbitration award and the realisability of this amount is dependent on this matter being finally resolved in favour of the Company.

ii. Note 33 to the financial statements. According to this, sundry debtors as at December 31, 2009 include variation claims of Rs. 1,515 lakhs (including Rs. 554 lakhs recognized as revenue and Rs. 525 lakhs recognized as interest income during year ended December 31, 2009) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court. The customer has further challenged this court order and realisability of this amount would be dependent on this matter being finally resolved in favour of the Company. This matter was qualified in our audit report for the year ended December 31, 2008.

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

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

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

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

v. On the basis of the written representations received from the directors, as on December 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. a. As described in Note 30 to the financial statements, sundry debtors at December 31, 2009 include variation claims of Rs. 5,042 lakhs (previous year Rs. 4,182 lakhs) recognized upto December 31, 2009, which are disputed by the customer. Outofthis, claims amounting to Rs. 2,801 lakhs (previous year Rs. 3,817lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 2,241 lakhs which have since been challenged by the customer. Our audit report on the financial statements for the year ended December 31, 2008 was also qualified in respect of this matter;

b. As described in Note 31 to the financial statements, debtors include Rs. 3,384 lakhs (previous year Rs. 3,384lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. Our audit report on the financial statements for the year ended December 31, 2008 was also qualified in respect of this matter;

c. As described in Note 32 to the financial statements, sundry debtors at December 31, 2009 include an amount of Rs. 1,225 lakhs (previous year Rs. 1,225 lakhs) recognized as income in the earlier years. Based on the payment schedule originally agreed with the customer, the above mentioned claim was expected to be received by the Company over a period of time commencing from financial year 2008/2009. No amounts have been received by the Company till date and further rescheduling of the payment which was in progress at December 31, 2008 has not yet been finalised. The realisability of this amount of Rs. 1,225 lakhs is dependent upon finalization of the rescheduled payment plan and the customer adhering to the same. Our audit report on the financial statements for the year ended December 31, 2008 was also modified in respect of this matter;

d. In our view there is an uncertainty in respect of realisability of these claims and receivables described in paragraphs vi(a) to (c) above. Accordingly, pending the ultimate outcome of these disputes, arbitration and related matters and certification, we are unable to comment on the adjustments, if any, that may be necessary to turnover, sundry debtors, the profit before tax, reserves and earnings per share reported in the financial statements for the years ended December 31, 2009 and December 31, 2008;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and subject to our comments in paragraph 5(vi) above, the impact of which on the financial statements cannot be ascertained, 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 December 31, 2009;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: ITD Cementation India Limited (the Compay)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

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

(ii) (a) The inventory comprising of construction material, tools and equipments and machinery spares has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory of construction material, tools and equipments and machinery spares. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(a) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

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

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

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

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

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

(c) According to the records of the Company, there are no dues of wealth-tax, service-tax, customs duty and cess which have not been deposited with the appropriate authorities on account of any dispute. According to information and explanations given to us, the following are the outstanding dues of sales tax, excise duty, service tax and income tax that have not been deposited by the Company on account of a dispute:

Name of the statute Nature of dues Amount (Rs) Period to which the Forum where amount relates dispute is pending

Sales Tax Act/Works Tax 3,175,428 Year ended Revision Board (Tribunal) Contract Tax Act March 31, 1995 Kolkatta

Sales Tax Act/Works Tax 67,914 Year ended Assistant Commissioner of Contract Tax Act March 31, 2004 Sales Tax

Sales Tax Act/Works Tax and Penalty 2,255,469 Year ended Assistant Commissioner of Contract Tax Act March 31, 2005 Commercial Taxes

Sales Tax Act/Works Tax 408,950 Year ended Deputy Commis -sioner of Contract Tax Act March 31, 1998 Commercial Taxes

Sales Tax Act/Works Tax 18,500 Year ended Assistant Comm -issioner, Contract Tax Act March 31, 2006 Rajasthan

Sales Tax Act/Works Penalty 15,450 Year ended Assistant Commi -ssioner of Contract Tax Act March 31, 2000 Commercial Taxes

Sales Tax Act/Works Penalty 3,094,104 Year ended Deputy Commiss -ioner of Contract Tax Act March 31, 2006 Commercial Taxes

Sales Tax Act/Works Tax 5,566,213 Year ended Deputy Commiss -ioner of Contract Tax Act March 31,2005 Commercial Taxes, Kakinada

Sales Tax Act/Works Tax 599,703 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2006 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works Tax 1,360,373 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2007 Commercial Taxes, Uttar Pradesh

Sales Tax Act/Works Tax 5,648,597 Year ended Excise and Taxa -tion Officer, Contract Tax Act March 31, 2007 Punjab

Sales Tax Act/Works Tax 3,196,927 Year ended Assistant Commis -sioner of Contract Tax Act March 31, 2005 Commercial Taxes, Bihar

Sales Tax Act/Works Tax 5,667,105 Year ended Deputy Commiss -ioner of Contract Tax Act March 31, 2007 Commercial Taxes, West Bengal

Central Excise Duty Duty 5,169,538 Period from May 1998 Commissioner of to January 1999 Central Excise

Income Tax Act, 1961 Tax demanded on 363,612 Year ended Deputy Commiss -ioner of assessment u/s 143(3) March 31, 2002 Income Tax

Income Tax Act, 1961 Penalty u/s 271(1 )(c) 216,513 Year ended Deputy Commiss -ioner of March 31, 2002 Income Tax

Income Tax Act, 1961 Penalty u/s 271(1 )(c) 511,780 Year ended Assistant Commis -sioner of March 31, 2003 Income Tax

Income Tax Act, 1961 Tax demanded on 53,030,830 Year ended Commissioner of assessment u/s 144 March 31, 2004 Income Tax - (Appeals)

Income Tax Act, 1961 Tax demanded on 151,511,711 Yearended ITAT assessment u/s 143(3) March 31, 2005

Income Tax Act, 1961 Tax demanded on 21,746,692 Yearended ITAT assessment u/s 144 March 31, 2006

Income Tax Act, 1961 Penalty u/s 271 (1 )(c) 266,963 Year ended CIT(A) March 31,2001

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding debentures during the year.

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

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by an unincorporated joint venture of which the Company is a member, from bank, the terms and conditions whereof, in our opinion, are not prejudicial to the interest of the Company.

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

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

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

(xix) The Company did not have any outstanding debentures during the year.

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

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

For S.R.Batliboi & Associates Chartered Accountants

per Amit Majmudar

Partner

Membership No.: 36656

Mumbai March 4, 2010