Auditor Report of Mangalam Cement Ltd.

Mar 31, 2018

Report on the Ind AS Financial Statements

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

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

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

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

Opinion

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

Emphasis of Matters

We draw attention to Note No 32.5 regarding coal valuing Rs. 1512.64 Lacs included in inventory of Stores and Spares sent for processing and is lying with a vendor for long time. Due to financial difficulty, vendor could not supply the material but the Company is hopeful of recovery.

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

Other Matter

The financial statements of the Company for the year ended 31 st March 2017 has been audited by previous auditor who expressed and unmodified opinion on May 13,2017.

Our Opinion is not modified in respect of this matter.

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

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

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

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

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

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

(e) The matters about coal sent for processing as described under the emphasis of matters paragraph above, in our opinion, shall have no adverse effect on the functioning of the Company.

(0 On the basis of written representations received from the directors as on 31st March''2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

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

(h) With respect to the other matters to be included in the Auditors'' 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:

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 32.3 of the Financial Statements.

b. The Company has made provision, wherever required under the applicable law or accounting standards, for material foreseeable losses, on long term contracts including derivative contracts.

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

Annexure-A to the Auditor''s Report

Annexure referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements (Re:Mangalam Cement Limited)

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in case of certain assets where the same is in process of updating.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, fixed assets were verified during the year. The discrepancies noticed on such physical verification were not material.

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

ii. The management has conducted physical verification of inventories except stock lying with third parties during the year at reasonable interval and no material discrepancies were noticed on such physical verification.

iii. The Company has granted unsecured loans to a company covered in register maintained under section 189 of the Companies Act,2013. The terms and conditions on which the loans were granted to above company were not, prima facie, prejudicial to the interest of the Company. The Company has stipulated schedule of repayment of principal including interest thereon. Accordingly, payment of principal and interest is not overdue. The Company has not granted loan to firms, Limited Liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with provisions of section 186 of the Companies Act, 2013 with

respect of loan granted and investment made. According to information and explains given by the management, no loan or guarantee or security under section 185 and no guarantee and security under section 186 of the Companies Act, 2013 have been given or outstanding during the year.

(v) The Company has not accepted any deposits covered under section 76 of the Companies Act, 2013 during the year. Therefore, 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 section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

vii. (a) According to the records of the Company, the Company is regular in depositing amounts deducted/ accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employee’s State Insurance, Income-tax, Sales-tax, Service Tax, Duty of customs, Duty of excise, Value Added Tax, Cess and other material statutory dues with the appropriate authorities. There was no undisputed outstanding statutory dues as at the yearend for a period of more than six months from the date they became payable.

(b) According to the records of the Company there are no dues outstanding on account of Income-tax, Sales-tax, Value Added Tax, Service Tax, Duty of customs, Duty of excise and Cess on account of any dispute except the followings:

Name of Statute	Nature of Dues	Amount (Rs, in Lacs)*	Period to which the amount related	Forum where matter is pending
Central Excise Act	Cenvat	1722.42	2006 to 2013	High Court
1944		80.90	2005 to 2016	Commissioner (Appeals)
		106.06	2013 to 2016	Deputy Commissioner
		7.69	2016-17	Superintendent
	Excise Duty	26.22	2007-08	CESTAT
		4780.18	2008 to 2017	Commissioner
		125.94	2008 to 2016	Asst. Commissioner
Income Tax Act, 1961	Income Tax	69.00	AY 2010-11 to 2012-13	CIT(Appeals)
Sales Tax (Rajasthan)	Sales-tax Incentive and interest thereon	4161.84	2003-08	High Court
	RVAT	2.00	2007-08	Rajasthan Tax Board
Finance act, 1994	Service Tax	206.01	2005 to 2011	Supreme Court
		38.35	2008-09	High Court
		520.64	2013 to 2017	Commissioner
		403.97	2013 to 2016	Commissioner (Appeals)
		112.31	2010 to 2015	Addl. Commissioner
		31.85	2011 to 2017	Asst. Commissioner
		0.39	2013-14	Superintendent

viii. The Company has not defaulted in repayment of dues to banks. The Company did not have any borrowing from any financial Institution or Government and dues to debenture holders.

(Ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). Further in our opinion and explanations given to us, term loans were applied for the purpose for which loans were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given to us, no fraud by the Company or no fraud on the Company by its officers and employees has been noticed or reported during the year.

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

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable.

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

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

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

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

Annexure - B to the Auditor''s Report

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

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

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind-AS financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India however same need to be further strengthened.

For SINGHI & CO.

Chartered Accountants,

Firm Registration No. 302049E

B. K. SIPANI

Place: New Delhi Partner

Date: May 15, 2018 M. No.088926

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Mar 31, 2017

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial Statement of Mangalam Cement Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2017 and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS of the state of affairs (financial position) of the Company as at 31st March, 2017, its Profit (financial performance including other comprehensive Income) and its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

(f) With respect to the adequacy of the internal financial control over financial reporting of the company and the operating effectiveness of such control, refer to our separate report in “Annexure B”.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been no delay in transferring amount, required to be transferred to the investor education and protection fund by the company.

iv. The company had provided requisite disclosures in its financial statements as to holdings as well as dealing in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016 and these are in accordance with the books of accounts maintained by the company.

Annexure ‘A'' to Independent Auditors'' Report of Mangalam Cement Ltd.

(Referred to in Paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date)

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

(b) Fixed assets have been physically verified by the management according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

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

ii. The inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals and the discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) Terms and conditions in respect of unsecured loan granted to a Company covered in the Register maintained under section 189 of the Companies Act, 2013 are not prejudicial to the Company’s interest.

(b) In respect of such loan, the schedule of repayment of principal and payment of interest has been stipulated and repayments are regular.

(c) There is no overdue amount in respect of such loan.

iv. In our opinion and according to the information and explanations given to us, the company has complied with provisions of section 185 and 186 of the Companies Act, 2013 with respect of loans, investments, guarantees and securities.

v. The Company has not accepted any deposit from public.

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 Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima-facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

vii. (a) According to the information and explanations and records of the Company, the company is regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income tax, Sales tax, Service tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues for a period of more than six months from the date they became payable as on 31st March, 2017;

(b) According to the records and information and explanations given to us, there are no dues in respect of custom duty that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of income tax or sales tax or service tax or excise duty or value added tax that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name of Statute	Nature of Dues	Amount (Rs. in Lacs)	Period to which the amount related	Forum where matter is pending
Central Excise Act	Cenvat	13.01	2006-2007	Rajasthan High Court
		98.93	Various matters, from 2006 to 2013	CESTAT. New Delhi
		29.78	Various matters, from 2005 to 2010	Commissioner (Appeals)
		55.95	2014-15	Commissioner
		106.06	2013 to 2016	Joint Commissioner
		0.52	2013-14	Superintendent, Kota
	Excise Duty	58.75	Various matters, from 2007 to 2009	CESTAT. New Delhi
		3272.04	Various matters, from 2008 to 2016	Commissioner
		167.83	Various matters, from 2008 to 2016	Asst. Commissioner
Sales Tax (M.P.)	Disallowance of credit notes	0.24	2002-03	Tax Board, M.P.
	Disallowance of credit notes	3.84	2012-13	Tax Board, M.P,
Sales Tax (Rajasthan)	Rajasthan incentive	4161.84	2003-08	Rajasthan High Court
	RVAT	2.00	2007-08	RTB, Ajmer
	RVAT	11.28	2012-13	Appellate Authority, Jaipur
Service Tax	Service Tax	837.71	Various matters, from 2005 to 2015	CESTAT. New Delhi
		104.42	2013-14	Commissioner, Udaipur
		453.64	Various matters, from 2012 to 2016	Commissioner (Appeals)
		112.31	2010 to 2015	Addl. Commissioner
		20.78	2012-2015	Asst. Commissioner
		0.39	2013-14	Superintendent, Kota

viii. The Company has not defaulted in repayment of loans or borrowings to a financial institution, banks or government.

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

x. Based upon the audit procedure performed and information and explanation given to us, we report that no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the course of our audit.

xi. Managerial Remuneration has been paid or provided in accordance with the requisite approvals mandated by the provision of Section 197 read with schedule V of the Companies Act, 2013.

xii. Provision of Nidhi Company is not applicable to the Company.

xiii. According to the information and explanation given to us and based on our examination of the records of the company, all transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the financial statements as required by the applicable accounting standard.

xiv. The company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures during the year under review.

xv. The company has not entered into any non-cash transaction with Directors or persons connected with him.

xvi. The company is not required to be registered under section 45-1A of the Reserve Bank of India Act 1934.

For JAIN PRAMOD JAIN & CO.

Chartered Accountants

(FRN 016746 N)

(P.K.JAIN)

Place: New Delhi ^Partner

Date: May 13, 2017 ^M. ^{Na 010479}

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Mar 31, 2015

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

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

AUDITORS' RESPONSIBILITY

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

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

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

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

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

OPINION

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section 11 of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements (Refer Note 29 (B3) to the financial statements).

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

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

Annexure to Independent Auditors' Report

(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

1. (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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) As informed to us, the Company has granted unsecured loan to a Company covered in the Register maintained under section 189 of the Companies Act, 2013 and there is no overdue amount in respect of principal, but interest thereon is in arrear.

(b) As informed to us, there is no overdue amount in respect of such loans granted by the Company and the Company has taken reasonable steps for recovery of interest.

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

v. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public.

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 Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima-facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete.

vii. (a) According to the information and explanations and records of the Company, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues for a period of more than six months from the date they became payable as on 31st March, 2015;

(b) According to the records and information and explanations given to us, there are no dues in respect of custom duty and wealth tax that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of income tax, sales tax, service tax, excise duty, value added tax or cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Amount Period to which the Name of Statute Nature of Dues in Lacs) amount related

Central Excise Act Cenvat 1.40 Various matters, from 1995 to 1997

229.98 Various matters, from 1997 to 2009

28.18 Various matters, from 2006 to 2011

856.08 Various matters, 2012-13

37.11 2013-14

9.52 Nov 2013

0.52 2013-14

Excise Duty 6.31 Various matters, from 1999 to 2009

196.83 2013-14

68.16 Various matters, from 2010

1800.91 Various matters, from 2008 to 2013

17.72 2013-2014

33.07 2011-12

6.42 Various matters, from 2008 to 2010

Income Tax Act Income Tax 1.06 AY 2009-10

516.54 AY 2012-13

Name of Statute Forum where matter is pending

Central Excise Act Rajasthan High Court

CESTAT. New Delhi

Commissioner (Appeals)

Commissioner

Joint Commissioner

Deputy Commissioner

Superintendent, Kota

CESTAT. New Delhi

Commissioner (A)

Chief Commissioner

Commissioner

Joint Commissioner

Addl. Commissioner

Asst. Commissioner

Income Tax Act CIT (Appeals)

CIT (Appeals)

Amount Period to which the Name of Statute Nature of Dues in Lacs) amount related

Sales Tax (M.P.) Disallowance of credit 0.24 2002-03 notes

Disallowance of credit 4.80 2012-13 notes

Sales Tax

(Rajasthan) Rajasthan incentive 4161.84 2003-08

RVAT 2.00 2006-08

RVAT 11.28 2012-13

Sales Tax (U.P) U.P. VAT/CST 0.88 2010-11

Service Tax Service Tax 48.79 1997-98

341.82 Various matters from 2005 to 2013

1065.02 2012-13

10.05 Various matters from 2007 to 2012

14.61 2013

4.39 2011-12

0.39 2012-13

Entry Tax (U.P.) Entry Tax 157.83 Various matters from 2007 to 2010

137.29 Various matters from 2007 to 2009

Land Tax (Rajas Land tax 1255.31 Various matters from than) 2006 to 2013

Government of Environment and Health 756.22 2008 to 2015 Rajasthan Cess Government of Entry Tax 503.83 2010 to 2015 Rajasthan 85.67 2012-13

Name of Statute Forum where matter is pending

Sales Tax (M.P) Tax Board, M.P.

Tax Board, M.P.

Sales Tax

(Rajasthan) RTB, Ajmer

RTB, Ajmer

Appellate Authority, Jaipur

Sales Tax (U.P) Appellate Authority, GZB.

Rajasthan High Court CESTAT. New Delhi

Commissioner, Udaipur

Commissioner (Appeals)

Addl. Commissioner

Asst. Commissioner

Superintendent, Kota

Entry Tax U.P. Supreme Court

Appellate Authority, GZB

Land Tax Rajasthan Supreme Court (appeal filed by Federation of mining association of Rajasthan)

Government of Rajasthan Rajasthan High Court

Government of Rajasthan Supreme Court

Appellate Authority, Jaipur

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

viii. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year.

ix. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders.

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

xi. In our opinion, the term loans have been applied for the purpose for which the loans were obtained.

xii. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.



For Jain Pramod Jain & Co. Chartered Accountants (Firm's Registration Number 016746 N)

(P.K. Jain) Place: New Delhi Partner Date : May 04, 2015 Membership No. 010479

---

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fairview of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified underthe Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 issued by the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Companies Act, 1956

("The Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e. on the basis of written representations received from the directors as on 31st Inarch, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st Inarch, 2014, from being appointed as a director in terms of clause (g) of sub- section (l) of section 274 of the Companies Act, 1956.

Annexure to Independent Auditors7 Report

(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

(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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

(c) The Company has not disposed off any substantial part of its fixed assets;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) As informed to us, the Company has given unsecured loan to a Company covered in the Register maintained under section 301 of the Companies Act, 1956. The year end balance of such loan isRs. 360 lacs (maximum balance outstanding during the yearRs. 360 lacs).

(b) Rate of interest and other terms and conditions of the loan given by the Company are not prima facie prejudicial to the interest of the Company.

(c) The parties have repaid the principal amount and have also been regular in the payment of interest to the Company.

(d) No amount of such loan is overdue for recovery.

(e) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act, hence our comments on para iii(a) to iii(d) of the order are not applicable.

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

v. (a) On the basis of the audit procedures performed by us, and according to the information and explanations and representations given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of Rs. 5 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 that relevant time;

vi. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public as referred in section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder;

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 in respect of the Company''s products to which the said rules are made applicable, and are of the opinion that, prima- facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

ix. (a) According to the information and explanations and records of the Company, the Company is regular in depositing 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 with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date it became payable as on 31st Inarch, 2014;

(b) According the records and information and explanations given to us, there are no dues in respect of custom duty and wealth tax that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of sales tax, service tax, cess, excise duty and income tax that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name of Statute Nature of Dues Amount (Rs in lacs) Central Excise Act Cenvat 1.40

234.24

28.18

226.40

Excise Duty 7.20

216.16

68.15

21.74

6.42

2472.69

IncomeTaxAct Income Tax 1.14

798.68

Sales Tax (M.P.) Disallowance of 0.24 credit notes

Sales Tax (Rajasthan) Sales Tax 4852.98

Central Sales Tax Act Central Sales Tax 1021.91

Service Tax Service Tax 48.79

678.98

805.55

10.46

14.61

0,23

Entry Tax (U.P.) Entry Tax 157.83

Land Tax (Rajasthan) Land tax 1495.41 Government of Environment and 507.78 Rajasthan Health Cess

Government of Entry Tax 564.47 Rajasthan

Period to which the amount related Forum where matter is pending

Various matters, from 1995 to 1997 Rajasthan High Court

Various matters, from 1997 to 2009 CESTAT.New Delhi

Various matters, from 2006 to 2010 Commissioner (Appeals)

Various matters, from 2013 Commissioner

Various matters, from 1997 to 2001 Rajasthan High Court

Various matters, from 1999 to 2009 CESTAT.New Delhi

Various matters, from 2010 to 2013 Chief Commissioner

October 2011 to March 2012 Addl. Commissioner

Various matters, from 2008 to 2010 Asst.Commissioner

Various matters, from 2008 to 2013 Commissioner

A.Y. 1992-93 High Court, Jaipur (appeal filed by Department)

Various matters, from A.Y. 2008-2009 CIT (Appeals) to 2011-2012

Various matters, from 2001 to 2003 Tax Board, M.P.

Various matters, from 2003 to 2008 Assessing Authority

2003-2008 Assessing Authority

November 1997 to June 1998 Rajasthan High Court

Various matters, from 2005 to 2012 CESTAT.New Delhi

2012-2013 Commissioner

Various matters, from 2007 to 2012 Commissioner (Appeals)

2013 Addl. Commissioner

2012-2013 Superintendent

Various matters, from 2007 to 2010 Supreme Court

Various matters, from 2006 to 2013 Supreme Court (appeal filed by Federation of mining association of Rajasthan

2008 to 2014 Rajasthan High Court

2010 to 2014 Rajasthan High Court

x. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year;

xi. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders;

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

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

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

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

xvii. According to the information and explanations given to us and on 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 and companies covered in the register maintained under section 301 of the Act;

xix. On the basis of the records made available to us, the Company has not issued any debentures during the period;

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

xxi. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.

For Jain Pramod Jain & Co. Chartered Accountants Firm''s Registration Number: 016746 N

(P.K. Jain) Place: Kolkata Partner Date : 13th May, 2014 Membership No. 010479

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Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

(c) The Company has not disposed off any substantial part of its fixed assets;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) The company has not granted any loans, secured or unsecured to Companies, firm or other parties covered in the register maintained under section 301 of the Companies Act except unsecured loan to Mangalam Timber Products Ltd. and maximum amount involved during the year was Rs. 30 crores and yearend balance is Nil.

(b) Rate of interest and other terms and conditions of the loan given by the company are not prima facie prejudicial to the interest of the Company.

(c) The parties have repaid the principal amount and have also been regular in the payment of interest to the company.

(d) No amount of such loan is overdue for recovery.

(e) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act, hence our comments on para iii(e) to iii(g) of the order are not applicable.

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

v. (a) On the basis of the audit procedures performed by us, and according to the information and explanations and representations given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs. 5 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 that relevant time;

vi. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public as referred in Section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder;

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of the Company''s products to which the said rules are made applicable, and are of the opinion that, prima-facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

ix. (a) According to the information and explanations and records of the Company, the company is regular in depositing 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 with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date it became payable as on 31st March, 2013;

x. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year;

xi. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders;

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

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

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

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

xvii. According to the information and explanations given to us and on 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 and companies covered in the register maintained under Section 301 of the Act;

xix. On the basis of the records made available to us, the Company has not issued any debentures during the period;

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

xxi. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.

For Jain Pramod Jain & Co.

Chartered Accountants

Firm''s Registration Number: 016746 N

(P.K. Jain)

Place: New Delhi Partner

Date: 2nd May, 2013 Membership No. 010479

---

Mar 31, 2012

We have audited the attached Balance Sheet of MANGALAM CEMENT LIMITED, as at 31st March, 2012, the annexed Statement of Profit and Loss for the year ended on that date, and also the Cash Flow Statement for the year ended on that date. 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.

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 any 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

1. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

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

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

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

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with other notes thereon give the information required by the Companies Act 1956, in the manner so required 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 31st March, 2012;

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

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

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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

(c) The Company has not disposed off any substantial part of its fixed assets;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) The company has not granted any loans, secured or unsecured to Companies, firm or other parties covered in the register maintained under section 301 of the Companies Act except unsecured loan to Mangalam Timber Products Ltd. and maximum amount involved during the year was Rs. 30 Crores.

(b) Rate of interest and other terms and conditions of the loan given by the company are not prima facie prejudicial to the interest of the Company.

(c) Such loan is repayable on demand and interest aggregating to Rs. 299.76 lacs has been debited to their account.

(d) No amount of such loan is overdue for recovery.

(e) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act, hence our comments on para iii(e) to iii(g) of the order are not applicable.

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

v. (a) On the basis of the audit procedures performed by us, and according to the information and explanations and representations given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs 5 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 that relevant time;

vi. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public as referred in Section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder;

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)

(d) of the Companies Act, 1956 in respect of the Company's products to which the said rules are made applicable, and are of the opinion that, prima-facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

ix. (a) According to the information and explanations and records of the Company, the company is regular in depositing 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 with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date it became payable as on 31st March, 2012;

(b) According the records and information and explanations given to us, there are no dues in respect of custom duty, wealth tax and cess that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of sales tax, service tax, excise duty and income tax that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name of Statute Nature of Dues Amount in Lacs

Central Excise Act Cenvat 8.70

245.94

32.14

6.23

Excise Duty 7.20

216.16

31.90

6.42

Income Tax Act Income Tax 1.14

3.34

49.80

Sales Tax (M.P.) Disallowance of 2.68 credit notes

Central Sales Tax Central Sales Tax 686.28 Act

Service Tax Service Tax 48.79

364.90

57.49

49.12

113.58

11.94

Entry Tax (U.P.) Entry Tax 88.34 Land Tax Land tax 1300.85 (Rajasthan)

Government of Environment and 235.36 Rajasthan Health Cess

Name of Statute Period to which the amount Forum where matter is related pending

Central Excise Act Various matters, from 1995 to 1997 High Court, Jaipur

Various matters, from 1997 to 2010 CESTAT, New Delhi

Various matters, from 1995 to 2009 Commissioner (Appeals)

Various matters, from 2009 to 2011 Asst. Commissioner

Various matters, from 1997 to 2001 High Court, Jaipur

Various matters, from 1999 to 2009 CESTAT, New Delhi

Various matters, from 2010 to 2011 Chief Commissioner

Various matters, from 2008 to 2010 Asst. Commissioner

Income Tax Act AY 1992-93 High Court, Jaipur (appeal filed by Department)

AY 08-09 and AY 11-12 TDS Ward

AY 2009-2010 CIT ( Appeals)

Sales Tax (M.P) Various matters, from 2001 to 2003 Tax Board, M.P.

Central Sales Tax 2005-2006 Asst. Commissioner Act

Service Tax 11/97-06/98 High Court, Jaipur

Various matters, from 2005 to 2010 CESTAT, New Delhi

06/10 - 12/10 Commissioner

02/09 - 05/10 Commissioner (Appeals)

Various matters, from 2010 to 2011 Addl. Commissioner

Various matters, from 2007 to 2011 Asst. Commissioner

Entry Tax (U.P) Various matters, Land Tax from 2007 to 2010 Supreme Court (Rajasthan)

Various matters, from 2006 to 2012 Supreme Court (appeal filed by Federation of mining association of Rajasthan)

Government of 2008 - 2012 High Court, Jaipur Rajasthan

x. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year;

xi. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders;

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

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

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

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

xvii. According to the information and explanations given to us and on 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 and companies covered in the register maintained under Section 301 of the Act;

xix. On the basis of the records made available to us, the Company has not issued any debentures during the period;

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

xxi. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.

For Jain Pramod Jain & Co.

Chartered Accountants

(Firm Registration No. 016746N)

P.K. Jain

New Delhi Partner

5th May, 2012 Membership No.10479

---

Mar 31, 2011

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

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

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

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

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

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with other notes thereon give the information required by the Companies Act 1956, in the manner so required 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 31st March, 2011;

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred To In Paragraph 1 Of Our Report Of Even Date) For The Year Ended 31St March, 2011 Of Mangalam Cement Limited

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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

(c) The Company has not disposed off any substantial part of its fixed assets;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. (a) The Company has not granted any loans, secured or unsecured to Companies, firm or other parties covered in the register maintained under section 301 of the Companies Act except interest free unsecured loan of Rs.3 crores to Mangalam Timber Products Ltd. as referred in note no. 4.

(b) Rate of interest and other terms and conditions of the loan given by the Company are not prima facie prejudicial to the interest of the Company.

(c) Such loan has been received back by the Company before the close of the year.

(d) No amount of such loan is overdue for recovery.

(e) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act, hence our comments on para iii(e) to iii(g) of the order are not applicable.

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

v. (a) On the basis of the audit procedures performed by us, and according to the information and explanations and representations given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs 5 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 that relevant time;

vi. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public as referred in Section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder;

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

viii. We have broadly viewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable, and are of the opinion that, prima- facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

ix. (a) According to the information and explanations and records of the Company, the company is regular in depositing 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 with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date it became payable as on 31st March, 2011;

(b) According the records and information and explanations given to us, there are no dues in respect of custom duty, wealth tax and cess that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of sales tax, service tax, excise duty and income tax that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name of Statute Nature of Dues Amount in Lakhs

Central Excise Act Cenvat 8.70

260.72

39.13

4.27

Income Tax Act Income Tax 1.14

50.80

Sales Tax (M.P.) Disallowance of 2.68 credit notes

Central Sales Tax Act Central Sales Tax 639.22

Service Tax Act Service Tax 48.79

218.33

67.63

24.97

111.84

1.81

38.37

39.96

Entry Tax (U.P.) Entry Tax 28.34

59.36 1169.37

Land Tax (Rajasthan) Land tax 1177.05

Government of Environment and 146.53 Rajasthan Health Cess

Name of Statute Period to which the amount Forum where matter is related pending

Central Excise Act Various matters, from 1995 to 1997 High Court, Jaipur

Various matters, from 1996 to 2009 CESTAT.New Delhi

Various matters, from 1995 to 2009 Commissioner (Appeals)

Various matters, from 2005 to 2006 Addl. Commissioner

Income Tax Act AY 1992-93 High Court, Jaipur (appeal filed by Department)

AY 2009-10 CIT (Appeals)

Sales Tax (M.P.) Various matters, from 2001 to 2003 Tax Board, M.P.

Central Sales Tax Act 2005-06 Asst. Commissioner

Service Tax Act 11/97-06/98 High Court, Jaipur

Various matters, from 2005 to 2006 CESTAT.New Delhi

04/09-06/09 Commissioner

Various matters, from 2005 to 2010 Commissioner (Appeals)

Various matters, from 2006 to 2008 Addl. Commissioner

Various matters, from 2006 to 2009 Asst. Commissioner

10/08 - 3/09 Commissioner

10/6 – 9/08 Addl. Commissioner

Entry Tax (U.P.) 2005-06 Assessing Authority

2006-07 Addl. Commissioner

Various matters, from 2007 to 2010 High Court, Allahabad

Land Tax (Rajasthan) Various matters, from 2006 to 2009 Supreme Court (appeal filed by Federation of mining association of Rajasthan)

Government of 2008 - 2010 High Court, Jaipur Rajasthan

x. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year;

xi. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders;

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

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

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

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

xvii. According to the information and explanations given to us and on 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 and companies covered in the register maintained under Section 301 of the Act;

xix. On the basis of the records made available to us, the Company has not issued any debentures during the period;

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

xxi. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.



For Jain Pramod Jain & Co.

Chartered Accountants

(Firm Registration No. 016746N)

P.K. Jain

Partner

Membership No.10479

New Delhi

The 27th day of April, 2011

---

Mar 31, 2010

We have audited the attached Balance Sheet of MANGALAM CEMENT LIMITED, as at 31st March, 2010, the annexed Profit and Loss Account for the year ended on that date, and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex a statement on the matters specified in paragraphs k and 5 of the said order.

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

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

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

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

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

(v) On the basis of written representation received from the Directors and taken on record by the Board of Directors of the Company we report that none of the Directors of the Company is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 21k of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with other notes thereon give the information required by the Companies Act 1956, in the manner so required 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 31st March, 2010;

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

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

Annexure to the Auditors Report (Referred To In Paragraph 1 Of Our Report Of Even Date) For The Year Ended 31st March, 2010 Of Mangalam Cement Limited

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 according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the company and the nature of its fixed assets. No material discrepancies were noticed on such verification;

(c) The Company has not disposed off any substantial part of its fixed assets;

ii. (a) As explained to us, the inventories of the Company at all its locations (except stocks lying with third parties and in transit) have been physically verified by the management at reasonable intervals;

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

(c) On the basis of our examination, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies which were noticed on physical verification of inventory as compared to book records were not material;

iii. The company has not given or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under section 301 of the Act, hence our comments on para (iii) (a) to para (iii) (g) of the order are not applicable.

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

v. (a) On the basis of the audit procedures performed by us, and according to the information and explanations and representations given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs 5 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 that relevant time;

vi. In our opinion and according to the information and explanations given to us, the Company has not taken any deposit from public as referred in Section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder;

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

viii. We have broadly viewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable, and are of the opinion that, prima- facie, prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate and complete;

ix. (a) According to the information and explanations and records of the Company, the company is regular in depositing 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 with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date it became payable as on 31st March, 2010;

(b) According the records and information and explanations given to us, there are no dues in respect of custom duty, wealth tax and cess that have not been deposited on account of any dispute. In our opinion and according to the information and explanations given to us, the dues in respect of sales tax, service tax, excise duty and income tax that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name of Statue Nature of Dues Amount Period to which the amount pending In Lacs relates

Central Excise Act CENVAT 8.70 Various matters, from 1995 to 1997 398.28 Various matters, from 1996 to 2009

132.72 Various matters, from 1995 to 2009

427 Various matters, from 2005 to 2006

21.42 Various matters, from 2008 to 2010

52.43 2007 - 2010 Income Tax Act Income Tax 1.14 AY 1992-93

Sales Tax (M.P) Disallowance of 2.68 Various matters from 2001 to 2003 credit notes

Central SalesTax Act Central Sales Tax 592.16 2005-06

Service Tax Service Tax 48.79 11/97-06/98

114.63 Various matters, from 2005 to 2006

146.19 Various matters, from 2007 to 2009

122.90 Various matters, from 2006 to 2008

6.48 Various matters, from 2006 to 2009

Entry Tax (U.P) Entry Tax 28.34 2005-06

59.36 2006-07 1169.37 Various matters form 2007-2010

Land Tax (Rajasthan) Land Tax 877.15 Various matters from 2006 to 2009

Government of Rajasthan Environment and 61.62 2008-2010 Health Cess



Name of Statue Forum where matter is pending

Central Excise Act High Court, Jaipur

CESTAT, New Delhi

Commissioner (Appeals)

Addl. Commissioner

Asst. Commissioner

Commissioner

Income Tax Act High court, Jaipur (appeal filed by Department)

Sales Tax (M.P) Tax Board, M.P

Central Sales Tax Act Asst Commissioner

Service Tax High Court, Jaipur

CESTAT, New Delhi Joint Commissioner

Addl. Commissioner

Asst. Comnnissioner

Entry Tax (U.P) Assessing Authority Addl.Commissioner High Court Allahabad

Land Tax (Rajasthan) Supreme Court (Appeal filed by Federation of Mining Association Rajasthan) Government of Rajasthan High Court, Jaipur

x. There was no accumulated loss at the end of year. The Company has not incurred cash losses during current financial year and immediately preceding financial year;

xi. The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders;

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

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

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

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

xvii. According to the information and explanations given to us and on 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 and companies covered in the register maintained under Section 301 of the Act;

xix. On the basis of the records made available to us, the Company has not issued any debentures during the period;

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

xxi. Based upon the audit procedure performed and the information and explanations given to us, we report that no fraud on or by the Company, has been noticed or reported during the course of our audit.

For Jain Pramod Jain & Co. Chartered Accountants (Firm Registration No. 016746N)

P.K. Jain

Kolkata Partner

The 1 st day of May,2010 Membership No.10479