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Auditor Report of Udaipur Cement Works Ltd.

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Udaipur Cement Works Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS Financial Statements”).

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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flow 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 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 standalone 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 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 standalone 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 standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone 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 standalone 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 standalone 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 financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, 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 section 143(11) of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 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 Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

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

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

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements-Refer Note 47 to the standalone Ind AS financial statements;

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

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

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings 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. Refer Note 42 to the standalone Ind AS financial statements.

“Annexure - A” to the Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March 2017, we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified at the end of the year, no material discrepancies were noticed between books of accounts and physical verification of fixed assets. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

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

(ii) The Company has conducted the physical verification of the inventory at reasonable intervals. The discrepancies noticed on such physical verification of the inventory were not material and were properly dealt in books of accounts.

(iii) The Company has not granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (“the Act”). Accordingly, the provisions of the clause 3(iii) (a) to (c) of the order are not applicable to the company and hence not commented upon.

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

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the central government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of the Company’s products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employee state insurance, income-tax, entry tax, sales tax, value added tax, duty of customs, excise duty, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable.

According to the information and explanations given to us, the following dues of sales tax, duty of excise and service tax have not been deposited by the Company on account of disputes:

Name of the statute

Nature of the dues

Period

Forum where dispute is pending

Amount (in Rs.)

Central Excise Act

Excise Duty

1995-96

High Court

4,40,017

Excise Duty (Interest)

2000-01

Assistant commissioner Central Excise, Udaipur

2,81,325

Service Tax Act

Service Ta x

1997-98

Assistant Commissioner Excise (S.T.)

66,05,892

Sales Tax Act

Sales Tax

1999-2000

Assistant Commissioner (Comm. Tax)

8,14,000

Sales Tax (Interest)

1996-97, 1997-98, 1998-99

Assistant Commissioner (Comm. Tax)

9,11,000

Sales Tax

1996-97

Assistant Commissioner (Comm. Tax) Circle B Jammu

25,04,900

(viii) On the basis of records made available and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks, governments or debenture holders during the year.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year except for Inter Corporate Loan taken from a fellow subsidiary and the same was utilized for the purpose for which it was raised.

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

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration 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. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS 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 except as stated in Note No. 18 to the Standalone Financial Statements.

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

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

For Om Prakash S. Chaplot & Co

Chartered Accountants

FRN : 000127C

O.P. Chaplot

Udaipur Partner

Date: 10th May 2017 M No. : 010184


Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134 (5) of the Companies Act, 2013 ("the Act") with respect to preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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 er ro r.

Auditor's Responsibility

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

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

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

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

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

c) in the case of 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, 2015 ("the Order"), issued by the 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 appears from our examination of those books.

c) The Balance Shee, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of 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. However all the directors of the company except Mr. S. K. Kinra , Special Director appointed by Hon'ble BIFR & Mr. Ganpat Singh and Miss Kumud Pahuja appointed as Additional Director on March 21, 2015 are disqualified to be appointed / reappointed as directors in any other public company.

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 Auditor's) 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 No. 30 to the financial statements.

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

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

ANNEXURE TO THE AUDITOR'S REPORT

[Referred to in Paragraph (1) under the heading "Report on other Legal and Regulatory Requirements" of the Auditors' Report of even date to the members of Udaipur Cement Works Limited on the accounts of the Company for the year ended 31.03.2015]

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that : i a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification.

ii) a) Physical verification of inventories has been conducted by the management at reasonable intervals.

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

c) The Company is maintaining proper records of inventory. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

(iii) The Company has not granted / taken any loans secured or unsecured to / from Companies, firms or other parties covered in the registered maintained u/s 189 of the Act.

iv) In our opinion, the Company has an adequate internal control system commensurate to the size of the Company and nature of its business for the purchase of inventory and fixed assets and for sale of goods & services and no major weaknesses in internal control system has been noticed.

v) The Company has not accepted any deposits from public within the meaning of the directives issued by the Reserve Bank of India and under the provisions of section 73 to 76 or any other relevant provisions of the Act and the Rules framed thereunder. As informed to us, no order has been passed by the Company Law Board or National Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the central government for maintenance of cost records under section 148 (1) of the Companies Act, 2013 in respect of the Company's products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.

vii a) According to the records of the Company and information and explanations given to us, the Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Entry Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise, VAT, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2015.

b) According to the records and information and explanations given to us there are following dues under various taxes which has not been deposited on account of any dispute and the amounts involved and the forum where dispute is pending are given below: -

Name of the Statute Nature of the Dues Period Forum where dispute is pending Amount (In Rs.)

Central Excise Act Excise Duty 1995-96 High Court 4,40,017

Excise Duty (Interest) 2000-01 Assistant Commissioner Central Excise, Udaipur 2,81,325

Service Tax Act Service Tax 1997-98 Assistant Commissioner of Excise (S.T.) 66,05,892

Sales Tax Act Sales Tax 1999-2000 Assistant Commissioner (Comm. Tax) 8,14,000

Sales Tax (Interest) 1996-97, 1997-98 & 1998-99 Assistant Commissioner (Comm. Tax) 9,11,000

Sales Tax 1996-97 Assistant Commissioner (Comm. Tax) Circle 'B' Jammu 25,04,900

c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

viii) The Company's accumulated losses at the end of the year are not more than fifty percent of its net worth. It hasn't incurred cash losses in the current year and in the immediately preceding period.

ix) On the basis of records made available and information and explanations given to us, the Company has not defaulted in repayment of dues, considering the sanction of BIFR scheme, to financial institutions, banks and 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 or financial institutions.

xi) On the basis of information and explanations given to us, the term loan has been applied for the purpose for which they were obtained.

xii) Based on the audit procedures performed and on the basis of information and explanations provided by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For OM PRAKASH S. CHAPLOT & CO.

Chartered Accountants FRN: 000127C

(O.P.CHAPLOT)

Place of Signature : Udaipur Partner

Date : 12th May 2015 M. No. 010184


Mar 31, 2014

We have audited the accompanying financial statements of M/s Udaipur Cement Works Limited (''the Company'') which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and Cash Flow Statement for the period ended on that date 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'') read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

(ii) in the case of the Statement of Profit and Loss, of the profit / loss for the period ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s

Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub- section (4A) of section 227 of the 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, the 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 the 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 read with the General Circular 15/2013 dated

13th September 2013 of the Ministry of Corporate Affairsin respect of section 133 of the Companies Act, 2013.

e. On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. However, all the directors of the company except Mr. S.K. Kinra, special director appointed by Hon''ble BIFR & Mr. Ganpat Singh, appointed as Additional Director on November 1, 2012 are disqualified to be appointed/ re-appointed as directors in any other public company;

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITOR''S REPORT

[Referred to in Paragraph (1) of the Auditors'' Report of even date to the members of Udaipur Cement Works Limited for the period ended 31st March 2014]

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

b) Physical verification of fixed assets has been carried out by the management according to the program of physical verification in phased manner and no material discrepancies were noticed from such verification.

c) As per information and explanations provided by the management and records made available to us, fixed assets disposed off during the period, were not substantial and as such it has not affected the going concern status of the Company.

ii) a) Physica verification of inventories has been conducted by the management during the period under audit and at the end of the year.

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

c) The Company is maintaining proper records of inventory and material discrepancies noticed on physical verification have been properly dealt with in the books of accounts. Further, a sum of Rs 333.79 lacs has been written-off during the period relating to inventory becoming unusable on account of obsolesce, corrosion, weathering, etc. due to suspension of the plant operations since 2002.

(iii) a) The Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the registered maintained u/s 301 of the Act and accordingly the provisions of paragraph 4(iii)(b) to (d) are not applicable.

b) The Company has not taken any loans secured or unsecured from Companies, firms or other parties covered under the registered maintained u/s 301 of the Act and accordingly the provisions of paragraph 4(iii)(e) to (g) are not applicable.

iv) The Company has an adequate internal control system commensurate to the size of the Company and nature of its business for the purchase of inventory and fixed assets and for sale of goods & services and no major weaknesses in internal control system has been noticed.

v) According to the information and explanations given to us, we are of the opinion that the Company has entered all the transactions required to be entered in the register maintained under section 301 of the Act and transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits from public within the meaning of the directives issued by the Reserve Bank of India and under the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under. As informed to us no order has been passed by the Company Law Board or National Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard.

vii) Internal Audit has been carried out by the own Internal Audit Department formed within the organization and the audit system is commensurate with a size and a nature of business of the Company

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central G o v er nm e nt f or t he 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, the prescribed records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.

ix) d) According to the records of the Company and information and explanations given to us, the Company is regular in depositing undisputed statutory dues, Wealth Tax, Service Tax, Custom Duty, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no material statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014.

e) According to the records and information and explanations given to us there are following dues under various taxes which has not been deposited on account of any dispute and the amounts involved and the forum where dispute is pending are given below: -

Name of the Statute Nature of The Dues Period Forum whe ending ispute Amount (InRs.)

Central Excise Act Excise Duty 1995-96 High Court 4,40,017

Excise Duty (Interest) 2000-01 Assistant Commissioner Central

Service Tax Act Service Tax 1997-98 Assistant Cotmmis sioner 66,05,892

Sales Tax Act Sales Tax 1999- 2000 (Comm.Tax) 8,14,000

Sales Tax (Interest) 1996-97, 1997-98 & 1998-99 (Comm. Tax) 9,11,000

Sales Tax 1996-97 (Comm. Tax) Circle ''B'' Jammu 25,04,900

x) The Company''s accumulated losses at

the end of the period are more than fifty percent of its net worth and it has not incurred cash losses in the current period but Company has incurred cash losses in the immediately preceding period.

xi) On the basis of records made available and information and explanations given to us, the Company has not defaulted in repayment of dues, considering the sanction of BIFR scheme, to financial institutions, banks and debenture holders.

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

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

xiv) According to the information and explanations provided by the management, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi) The Company has obtained a term loan from a Bank. Pending its utilization for the purpose it has been sanctioned, the amount is temporarily held in Current Account of the Company.

xvii) Based on the examination of the documents and records made available and on the basis of information and explanations given to us, we are of the opinion that the Company has not raised any short-term funds. Accordingly, the provisions of clause 4(xvii) are not applicable to the Company.

xviii) According to the information and explanations given to us, the Company has made preferential allotment of equity shares during the period to the Holding Company amounting to Rs. 7800 Lacs in pursuance to BIFR scheme.

xix) According to information & explanations provided by the management, no debentures have been issued during the period.

Accordingly, the provisions of clause 4 (xix) are not applicable to the Company.

xx) The Company has not raised any money through a public issue during the period. Accordingly, the provisions of clause 4(xx) are not applicable to the Company.

xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management which have been relied upon by us, no fraud on or by the Company has been noticed or reported during the course of our audit or have been informed by the management.

For OM PRAKASH S. CHAPLOT & CO.

Chartered Accountants

FRN 000127C

O. P. CHAPLOT

Place : Udaipur Partner

Dated : 15th May 2014 M.No. 010184


Sep 30, 2012

We have audited the attached Balance Sheet of Udaipur Cement Works Limited as at 30th September 2012, Statement of Profit and Loss and also the cash flow statement for the period ended on that date annexed thereto. These financial Statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditor''s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

c) The Balance Sheet, 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 and to the best of our information, Statement of Profit and Loss, Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors, as on 30th September, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th September, 2012 from being re-appointed as a director of the company in terms of the clause (g) of sub- (1) of section 274 of the Companies Act, 1956. However all the directors of the company except Mr. S.K.Kinra, special director appointed by Hon''bie BIFR & Mr. Ganpat Singh, appointed as Additional Director on November 1, 2012 are disqualified to be appointed/re- appointed as directors in any other public company;

f) Attention is invited to:

(i) Note No. 26 of Notes to Accounts regarding non-provision against loans and advances amounting to Rs. 471:84 lacs.

(ii) Note No. 26 of Notes to Accounts regarding pending reconciliation/ confirmation of balances of debtors and loans and advances considered to the extent identified by the management and our inability to comment thereon.

We further report that the loss for the period, balance in profit & loss account, assets and liabilities as stated are without considering the impact of items mentioned in para (f) (i) to (ii) above. Had the observation made in para (f) (i) above been considered, loss for the period would have been Rs. 1,734.16 lacs (as against reported figure of loss for the period of Rs 1262.32 lacs), loans & advances would have been Rs. 128.62 lacs fas against reported figure of Rs. 600.46 lacs).

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance sheet, of the state of affairs of the Company as at 30th September, 2012;

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

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

ANNEXURE TO THE AUDITOR''S

REPORT

[Referred to in Paragraph (1) of the Auditors'' Report of even date to the members of Udaipur Cement Works Limited for the year ended 30.09.2012]

i) a) Records showing full particulars including quantitative details and situation of fixed assets have been maintained by the company.

b) Physical verification of fixed assets has been conducted by the management according to the programme of physical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and nature of Fixed Assets during the period. The discrepancies noticed on such physical verification were not material.

c) As per information and explanations provided by the management and records made available to us, fixed assets disposed off during the period were not substantial.

ii) a) Physical verification of inventories has not been conducted by the Management during the period as stated in note no. 19 of Notes to Accounts.

b) In our opinion and having regard to our comments in Para (ii)(a) above, the procedures of physical verification of inventory needs to be made adequate in relation to the size of the company and nature of its business.

c) On the basis of information and records made available, inventory records are maintained (subject to note no. 19 of Notes to Accounts) but in the absence of physical verification report, it is not possible to ascertain and comment on discrepancy between book records and physical inventory and adjustments, if any and ascertainment of amount thereof read together with note no. 19 of Notes to Accounts.

iii) The company has neither granted nor taken any loans, secured or unsecured '' to and from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (b) to (d), (f) & (g) of the order are not applicable.

iv) Internal control system require to be strengthened to be made commensurate with the size of the company and the nature of its business for the sale of fixed assets and services and read with our comments elsewhere and note no 19 & 26 of Notes to Accounts.

v) According to the information and explanations provided by the management and based upon audit procedure performed, we are of the opinion that there are no particulars of contracts or arrangements referred to in section 301 of the Act to be entered in the register required to be maintained under that section, accordingly, the provisions of clause 4 (v) (b) of the order are not applicable.

vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of the directives issued by Reserve Bank of India and the provision of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vii) No Internal Audit has been carried out during the period as stated in note no. 28 of Notes to Accounts.

viii) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been made and maintained read with Note no. 1.3. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.

ix) a) According to the records of the Company and information and explanations given to us, the company is generally regular in depositing undisputed statutory dues, Wealth Tax, Service Tax, Custom Duty, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no material statutory dues payable for a period of more than six months from the date they became payable as at 30th September, 2012.

b) According to the records and information and explanations given to us,, there are no dues in respect of Wealth Tax, Custom Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Income Tax, Excise Duty, Service Tax and Sales Tax that have not been deposited on account of dispute and the forum where the dispute is pending are given below:-

Name of the Nature of The Dues Period Statute

Central Excise Act Excise Duty 1995-96

Excise Duty (Interest) 2000-01

Service Tax Act Service Tax 1997-98

Sales Tax Act Sales Tax 1999-2000

Sales Tax (Interest) 1996-97,1997-98 & 1998-99

Sales Tax 1996-97

Land Tax Act Land Tax 2006-07 to 2011-12

Above is to be read with note no. 20 of Notes to accounts.

Name of the Statute Forum where dispute Amount (In Rs.) is pending

Central Excise Act High Court 4,40,017

Assistant 2,81,325 Commissioner Central Excise, Udaipur

Service Tax Act Assistant 66,05,892 Commissioner of Excise (ST.)

Sales Tax Act Assistant 8,14,000 Commissioner (Comm, Tax)

Assistant 9,11,000 Commissioner (Comm. Tax)

Assistant 25,04,900 Commissioner (Comm. Tax) Circle ''B'' Jammu

Land Tax Act Sub-Registrar, Mavli 23,88,69,766 & Vallabhnagar

x) The company''s accumulated losses at the end of the period are more than fifty percent of its net worth and it has also incurred cash losses in the current period and also in the immediately preceding financial year.

xi) On the basis of records made available and information and explanations given to us, the company has not defaulted in repayment of dues, considering the sanction of scheme, to financial institutions, banks and debenture holders.

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

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

xiv) According to the information and explanations provided by the management, the company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi) In our opinion and according to the records, information and explanations given to us, the Company has not availed any fresh term loan during the period.

xvii) Based on the examination of the documents and records made available and on the basis of information and explanations given to us and on an overall examination of financial statements, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the period to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to information & explanations provided by the management no debentures have been issued during the period.

xx) The company has not raised any money through a public issue during the period.

xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management which have been relied upon by us, no fraud on or by the company has been noticed or reported during the course of our audit or have been informed by the management.

For OM PRAKASH S CHAPLOT & CO.

Chartered Accountants

FRN: 000127C

(O.P.CHAPLOT)

Place: Udaipur Partner

Date : 28.12.2012 M.No. 10184


Mar 31, 2011

We have audited the attached Balance Sheet of Udaipur Cement Works Limited as at 31st March 2011, the Profit & Loss Account and also the cash flow statement for the year ended on that date annexed thereto. These financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

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

d) In our opinion and to the best of our information, the Profit & Loss Account, Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable except to the extent of non - provision of interest liability etc. and preparation of accounts on going concern basis (AS-1), non- provision for leave encashment. (Note No. 2-AS 15), Non- determination of current net Realisable Value of Inventory and Non- determination / non- provision of obsolete and unusable assets and inventory, non provision of depreciation and for impairment of assets(note no.3- AS-2, AS-6, AS-10 and AS-28);

e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being re-appointed as a director of the company in terms of the clause (g) of sub- (1) of section 274 of the Companies Act, 1956. However all the directors of the company except Mr. S.K.Kinra, special director appoints by Hon'ble BIFR are disqualified to be appointed/ re-appointed as directors in any other public company;

f) Attention is invited to:

(i) Note no. 1 & 11 of Schedule 13 regarding preparation of accounts on "going concern basis" for the reasons stated in the said notes and our inability to comment thereon;

(ii) Note no. 2 of Schedule 13 regarding non-provision of salary , wages , allowances and other benefit etc. as stated in the said note (amount unascertained).

(iii) Note no. 3 of Schedule 13 regarding valuation of respective inventories as valued, considered same as in the previous year and have been taken on the same value as in the previous year and non provision of adjustment of lower of net realisable value over cost of inventories and non provision for obsolete, shortages, damaged and non-moving, inventories and fixed assets and for impairment of assets (amount unascertained) and non provision of depreciation as stated in the said note.

(iv) Note no. 4(a) of Schedule 13 regarding non provision of interest on secured loans, bank borrowings, trade deposits, royalty, dues payable to Ajmer Vidyut Vitaran Nigam Ltd. (AWNL), excise duty demand and penal interest, liquidated damages, etc. thereon as stated in the said note (amount unascertained) and regarding non- accounting of interest earned on certain deposits.

(v) Note No. 4(c) of Schedule 13 regarding non-accounting of interest earned on certain deposits as stated in the said note (amount unascertained).

(vi) Note No. 14 of Schedule 13 regarding non-provision against overdue debtors amounting to Rs. 3,67,79,578 and loans and advances amounting to Rs. 4,71,84,621.

(vii) Note No. 21,14,6 & 11 of Schedule 13 regarding pending reconciliation / confirmation of balances of secured loans, unsecured loans, deferred interest, creditors, other current liabilities, banks, deposits, debtors, loans and advances and contingent liabilities considered to the extent identified by the management and our inability to comment thereon.

(viii)Note No. 13 of Schedule 13 regarding non-provision of interest on overdue liability of Sundry Creditors under Current Liabilities & Provisions as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" (amount unascertained) and identification of such parties and their dues by the management and our inability to comment on the same.

We further report that the loss for the year, balance in profit & loss account, assets and liabilities as stated are without considering the impact of items mentioned in para (f)(i) to (v), (vii) & (viii) above. Had the observation made in para (f) (iii) & (vi) above been considered, loss for the year would have been Rs. 15,97,41 ;701 (as against reported figure of Rs 36,85,490), debit balance in profit & loss account would have been Rs. 3,06,43,97,502 (as against reported figure of Rs. 2,90,83,41,291), debtors would have been Rs. Nil (as against reported figure of Rs. 3,67,79,578) and loans & advances would have been Rs. 10,00,00,000 (as against reported figure of Rs. 14,71,84,621).

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said balance sheet, profit & Loss account and the cash flow statement read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) In the case of the Profit & loss Account, of the loss for the year ended on that date; and

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

ANNEXURE TO THE AUDITOR'S REPORT

[Referred to in Paragraph (1) of the Auditors' Report of even date to the members of Udaipur Cement Works Limited for the year ended 31.03.2011]

i)

a) Records showing full particulars including quantitative details and situation of fixed assets have been maintained by the company. This should be read with our comments in para (b) below.

b) Physical verification of fixed assets has not been conducted by the management during the year due to plant operation being under suspension as stated in note no. 3 of Schedule 13. Discrepancy, if any, in this respect could not be ascertained and commented by us.

c) As per information and explanations provided by the management and records made available to us, fixed assets disposed off during the year were not substantial.

ii)

a) Physical verification of inventories has not been conducted by the Management during the year as stated in note no. 3 of Schedule 13.

b) In our opinion and having regard to our comments in Para (ii)(a) above, the procedures of physical verification of inventory needs to be made adequate in relation to the size of the company and nature of its business.

c) On the basis of information and records' made available, inventory records are maintained (subject to note no.3 of Schedule 13) but in the absence of physical verification report, it is not possible to ascertain and comment on discrepancy between book records and physical inventory and adjustments, if any and ascertainment of amount thereof read together with note no.3 of Schedule 13.

iii) The company has neither granted nor taken any loans, secured or unsecured to and from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (b) to (d), (f) & (g) of the order are not applicable.

iv) Internal control system require to be strengthened to be made commensurate with the size of the company and the nature of its business for the sale of fixed assets and services and read with our comments elsewhere and note no 3,14, & 21 of Schedule 13.

v) According to the information and explanations provided by the management and based upon audit procedure performed, we are of the opinion that there are no particulars of contracts or arrangements referred to in section 301 of the Act to be entered in the register required to be maintained under that section, accordingly, the provisions of clause 4 (v) (b) of the order are not applicable.

vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of the directives issued by Reserve Bank of India and the provision of sections 58 A, 58 AA or any other relevant provisions of the Act and the rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vii) No Internal Audit has been carried out during the year as stated in note no. 17 of Schedule 13.

viii) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been made and maintained read with Note no. 3 of schedule 13. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.

ix) a) According to the legal opinion obtained by the company liability of provident fund contribution arises only when salaries and wages are actually paid, accordingly we are not in a position to express opinion about payable amount in respect of provident fund contribution. As informed to us, Employee State Insurance is not applicable to the company. Further, according to the records of the Company and information and explanations given to us, the company is generally regular (except delay in case of Sales Tax, Excise Duty, Income Tax, Royalty (including as reported below) in depositing undisputed statutory dues including Investor Education and Protection Fund, Wealth Tax, Service Tax, Custom Duty, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no material statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2011 except Sales Tax Rs. 13,44,27,346, Excise Duty Rs. 70,54,778, , Electricity dues Rs. 1,83,17,491, Cess Rs. 55,853 and Royalty Rs. 62,61,385, further this is to be read together with note no. 2,4(a) and 21 of Schedule 13.

b) According to the records and information and explanations given to us, there are no dues in respect of Wealth Tax, Custom Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Income Tax, Excise Duty, Service Tax and Sales Tax that have not been deposited on account of dispute and the forum where the dispute is pending are given below:-

Name of the Nature of Period Forum where Amount Statute The Dues dispute is (In Rs. pending Central Excise Excise Duty 1995-96 High Court 4,40,017 Act Excise Duty 2000-01 Assistant 2,81,325 (Interest) Commissioner Central Excise, Udaipur

Service Tax Service Tax 1997-98 Assistant 66,05,892 Act Commissioner of Excise (S.T.) Sales Tax Sales Tax 1999-2000 Assistant 8,14,000 Act Commissioner (Comm.Tax)

Sales Tax 1996-97, Assistant 9,11,000 (Interest) 1997-98 & Commissioner 1998-99 (Comm. Tax)

Sales Tax 1996-97 Assistant 25,04,900 Commissioner (Comm. Tax) Circle 'B' Jammu

Land Tax Act Land Tax 2006-07 to Sub-Registrar, 18,59,79,044 2010-11 Mavli & Vallabhnagar

Above is to be read with note no. 6,& 21 of Schedule 13

x) The company's accumulated losses at the end of the financial year are more than fifty percent of its net worth and it has also incurred cash losses in the current financial year and also in the immediately preceding financial year.

xi) On the basis of records made available and information and explanations given to us, the company has defaulted in repayment of dues, considering restructuring scheme, to financials institutions, banks and debenture holders, the details of which are given below:

Particulars Amount Over due as on Maximum Balance 31.03.2011 (Including accrued outstanding interest to the extent during the provided for) year Debentures holders Rs.40,42,34,400 (including Rs.40,42,34,400 carried over Rs. 40,42,34,400 from previous year)

Banks Rs 18,92,88,108 (including Rs.18,92,88,108 carried over Rs.18,92,88,108 from previous year)

Financial Rs 60,84,70,500 (including Rs.60,84,70,500 Institutions carried over Rs.60,84,70,500 from previous year)

Deferred Interest Rs. 10,82,29,116 Rs.10,82,29,116

Above is to be read with note no. 4, 5 & 21 of Schedule 13

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

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

xiv) According to the information and explanations provided by the management, the company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi) In our opinion and according to the records, information and explanations given to us, the Company has not availed any fresh term loan during the year.

xvii) Based on the examination of the documents and records made available and on the basis of information and explanations given to us and on an overall examination of financial statements, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to information & explanations provided by the management no debentures have been issued during the year. In respect of debentures outstanding during the year security or charge had been created as stated in note no. B 1 of schedule- 3.

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

xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management which have been relied upon by us, no fraud on or by the company has been noticed or reported during the course of our audit or have been informed by the management.

For OM PRAKASH S. CHAPLOT & CO. Chartered Accountants FRN: 000127C

Place: Udaipur (O.P.CHAPLOT) Date : 05.08.2011 Partner M.No. 10184


Mar 31, 2010

We have audited the attached Balance Sheet of Udaipur Cement Works Limited as at 31st March 2010, the Profit & Loss Account and also the cash flow statement for the year ended on that date annexed thereto. These financial Statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the finahcial statements are free of material misstatement. An audit includes examining, on 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 presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

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

d) In our opinion and to the best of our information, the Profit & Loss Account, Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable except to the extent of non - provision of interest liability etc. and preparation of accounts on going concern basis (AS-1), non- provision for leave encashment. (Note No. 2-AS 15), Non- determination of current net Realisable Value of Inventory and Non- determination/ non- provision of obsolete and unusable assets and inventory, non provision of depreciation and for impairment of assets(note no.3- AS-2, AS-6, AS-10 and AS-28);

e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being re- appointed as a director of the company in terms of the clause (g) of sub- (1) of section 274 of the Companies Act, 1956. However all the directors of the company are disqualified to be appointed/ re-appointed as directors in any other public company;

f) Attention is invited to:

(i) Note no. 1 & 11 of Schedule 13 regarding preparation of accounts on "going concern basis" for the reasons stated in the said notes and our inability to comment thereon;

(ii) Note no. 2 of Schedule 13 regarding non-provision of salary , wages , allowances and other benefit etc. as stated in the said note (amount unascertained).

(iii) Note no. 3 of Schedule 13 regarding valuation of respective inventories as valued, considered same as in the previous year and have been taken on the same value as in the previous year and non provision of adjustment of lower of net realisable value over cost of inventories and non provision for obsolete, shortages, damaged and non-moving, inventories and fixed assets and for impairment of assets (amount unascertained) and non provision of depreciation as stated in the said note.

(iv) Note no. 4(a) of Schedule 13 regarding non provision of interest on secured loans, bank borrowings, trade deposits, royalty, dues payable to Ajmer Vidyut Vitaran Nigam Ltd. (AVVNL), excise duty demand and penal interest, liquidated damages, etc. thereon as stated in the said note (amount unascertained) and regarding non- accounting of interest earned on certain deposits.

(v) Note No. 4(c) of Schedule 13 regarding non-accounting of interest earned on certain deposits as stated in the said note (amount unascertained).

(vi) Note No. 14 of Schedule 13 regarding non-provision against overdue debtors amounting to Rs. 3,67,79,578 and loans and advances amounting to Rs. 4,70,28,145.

(vii)Note No. 21, 14, 6 & 11 of Schedule 13 regarding pending reconciliation/ confirmation of balances of secured loans, unsecured loans, deferred interest, creditors, other current liabilities, banks, deposits, debtors, loans and advances and contingent liabilities considered to the extent identified by the management and our inability to comment thereon.

(viii)Note No. 13 of Schedule 13 regarding non-provision of interest on overdue liability of Sundry Creditors under

Current Liabilities & Provisions as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" (amount unascertained) and identification of such parties and their dues by the management and our inability to comment on the same.

We further report that the loss for the year, balance in profit & loss account, assets and liabilities as stated are without considering the impact of items mentioned in para (f)(i) to (v), (vii) & (viii) above. Had the observation made in para (f) (iii) & (vi) above been considered, loss for the year would have been Rs. 19,23,99,570 (as against reported figure of Rs 1,86,83,316), debit balance in profit & loss account would have been Rs. 3,07,83,72,056 (as against reported figure of Rs. 2,90,46,55,802), debtors would have been Rs. Nil (as against reported figure of Rs. 3,67,79,578) and loans & advances would have been Rs. 10,00,00,000 (as against reported figure of Rs. 14,70,28,145).

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said balance sheet, profit & Loss account and the cash flow statement read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2010;

b) In the case of the Profit & loss Account, of the loss for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT

[Referred to in Paragraph (1) of the Auditors Report of even date to the members of Udaipur Cement Works Limited for the year ended 31.03.2010]

a) Records showing full particulars including quantitative details and situation of fixed assets have been maintained by the company. This should be read with our comments in para (b) below.

b) Physical verification of fixed assets has not been conducted by the management during the year due to plant operation being under suspension as stated in note no. 3 of Schedule 13. Discrepancy, if any, in this respect could not be ascertained and commented by us!

c) As per information and explanations provided by the management and records made available to us, fixed assets disposed off during the year were not substantial.

ii)a) Physical verification of inventories has not been conducted by the Management during the year as stated in note no.3 of Schedule 13.

b) In our opinion and having regard to our comments in Para (ll)(a) above, the procedures of physical verification of Inventory needs to be made adequate In relation to the size of the company and nature of its business.

c) On the basis of information and records made available, Inventory records are maintained (subject to note no.3 of Schedule 13) but In the absence of physical verification report, It is not possible to ascertain and comment on discrepancy between book records and physical Inventory and adjustments, If any and ascertainment of amount thereof read together with note no.3 of Schedule 13.

iii) The company has neither granted nor taken any loans, secured or unsecured to and from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) ( b) to (d), (f) & (g) of the order are not applicable.

iv) Internal control system require to be strengthened to be made commensurate with the size of the company and the nature of its business for the sale of fixed assets and services and read with our comments elsewhere and note no 3, 14, & 21 of Schedule 13.

v) According to the information and explanations provided by the management and based upon audit procedure performed, we are of the opinion that there are no particulars of contracts or arrangements referred to in section 301 of the Act to be entered in the register required to be maintained under that section, accordingly, the provisions of clause 4 (v) (b) of the order are not applicable.

vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of the directives issued by Reserve Bank of India and the provision of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard,

vli) No Internal Audit has been carried out during the year as stated In note no. 17 of Schedule 13.

vlll) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been made and maintained read with Note no. 3 of schedule 13. We have not, however, made a detailed examination of the said records with a view to determine whe ther they are accurate.

ix)a) According to the legal opinion obtained by the company liability of provident fund contribution arises only when salaries and wages are actually paid, accordingly we are not in a position to express opinion about payable amount in respect of provident fund contribution. As informed to us, Employee State Insurance is not applicable to the company. Further, according to the records of the Company and information and explanations given to us, the company is generally regular (except delay in case of Sales Tax, Excise Duty, Income Tax, Royalty ( including as reported below) in depositing undisputed statutory dues including Investor Education and Protection Fund, Wealth Tax, Service Tax, Custom Duty, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no material statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010 except Sales Tax Rs. 13,44,27,346, Excise Duty Rs. 70,54,778, , Electricity dues Rs. 1,83,17,491, Cess Rs. 55,853 and Royalty Rs. 62,61,385, further this is to be read together with note no. 2,4(a) and 21 of Schedule 13.

b) According to the records and information and explanations given to us, there are no dues in respect of Wealth Tax, Custom Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Income Tax, Excise Duty, Service Tax and Sales Tax that have not been deposited on account of dispute and the forum where the dispute is pending are given below:-

Name of the Statute Nature of The Dues Period

Central Excise Act Excise Duty 1995-96

Service Tax Act Service Tax 1997-98

Sales Tax Act Sales Tax 1999-2000

Sales Tax (Interest) 1996-67,1997-98 & 1998-99

Sales Tex 1996-97

Above is to be mad with note no, 6,& 21 of Schedule 13



Name of the Statute Forum where dispute Is Amount (In Rs.) pending

Central Excise Act High Court 4,40,017

Service Tax Act Assistant Commissioner 66,05,892

of Excise (S.T.)

Sales Tax Act Assistant Commissioner 8,14,000

(Comm, Tax)

Assistant Commissioner 9,11,000

(Comm, Tax)

Assistant Commissioner 25,04,900

(Comm. Tax) Circle B Jammu Abovs Is to be mad wlthnote no. 6,& 21 of Schedule 13



x) The companys accumulated losses at the end of the financial year are mora than fifty percent of Its net worth and It has also Incurred cash losses In the current financial year and also In ths Immediately preceding financial year,

xi) On the basis of records made available

and Information and explanations given to us, the company has defaulted In repayment of dues, considering restructuring scheme, to financials institutions, banks and debenture holders, the details of which are given below

Particulars Amount Over due as on 31.03.2010 Maximum Balance

(Including accrued interest to the extent provided for) outstanding during the year

Debentures holders Rs.40,49,59,779 (including carried over Rs.31,50,16,353 Rs. 40,49,59,779

from previous year)

Banks Rs 18,92,88,108 (including carried over Rs. 18,66,44,358 from Rs. 18,92,88,108

previous year)

Financial Institutions Rs 60,84,70,500 (including carried over Rs. 47,31,29,933 from Rs 60,84,70,500

previous year) Deferred Interest Rs. 10,82,29,116 Rs. 10,82,29,116

Above is to be read with note no. 4,5&21 of Schedule 13

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

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

xiv) According to the information and explanations provided by the management, the company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi) In our opinion and according to the records, information and explanations given to us, the Company has not availed any fresh term loan during the year.

xvii) Based on the examination of the documents and records made available and on the basis of information and explanations given to us and on an overall examination of financial statements, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to information & explanations provided by the management no debentures have been issued during the year. In respect of debentures outstanding during the year security or charge had been created as stated in note no. B 1 of schedule-3.

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

xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management which have been relied upon by us, no fraud on or by the company has been noticed or reported during the course of our audit or have been informed by the management.

FOR OM PRAKASH S CHAPLOT & CO.

Chartered Accountants

(O.P.CHAPLOT)

Date : 05.07.2010 Partner

Place : Udaipur M. No. 10184

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