Management's Responsibility for the Financial Statements

The 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 fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

Basis for Qualified Opinion

The Company had not used jute bags in packing cement in accordance with Jute Packing Materials (Compulsory Use in the Packing Commodities) Act, 1987 as referred to in Note No.42 of the Financial Statements. Accordingly, no provision has been made for any liability that may arise for such non- compliance, the impact of which is not quantifiable by the management.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the Companies Act, 1956, 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) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

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 Independent Auditors' Report

Referred to in Paragraph 1 under `Report on Other Legal and Regulatory Requirements' section of our Report of even date

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

b) These Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets of the company have been disposed of during the year.

ii. a) Inventories have been physically verified at reasonable intervals by the management.

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

c) The company is maintaining proper records of inventory and discrepancies on physical verification as compared to book records were not material and have been dealt properly in the books of account.

iii. a) The Company has not given any loans, secured or unsecured to parties referred to Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured inter corporate deposits from Companies appearing in the register maintained by the Company under Section 301 of the Companies Act, 1956. The total number of parties involved was 1 (one), the maximum amounts outstanding at any point of time during the year was Rs.140 Crores and the closing balance at the end of the year is Rs. 50 Crores.

c) In our opinion, the rate of interest and other terms and conditions of the Deposit are not, prima facie, prejudicial to the interest of the company.

d) The Company is regular in payment of interest and the repayment of the principal during the year ended 31st March, 2014.

iv. In our opinion, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not come across any continuing failure to correct major weaknesses in the Internal Control System.

v According to the information and explanations furnished by the company there are no contracts or arrangements referred to in Section 301 of the Companies Act, 1956, entered into by the company except the inter corporate deposit referred in item (iii) above which has been entered into the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the Company has not accepted any deposit from the public.

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 relating to manufacture of cement 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 we are of the opinion that prima facie the prescribed accounts and records have been maintained. We, however, have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax/ Value Added Taxes, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Entry Tax and other statutory dues with the appropriate authorities in India.

There are no arrears of outstanding statutory dues as on 31.3.2014 for a period of more than six months from the date they became payable.

At the end of the financial year there were no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not been deposited on account of any dispute except as follows:

Name of the Statute      Nature of Dues         Amount (Rs In Lakhs)

Sales Tax Act            Tax Amount *           1.27
                         Tax and Penalty **     427.52
                         Tax Amount             53.16

Income Tax Act           Tax Amount             2420.61

Customs Act              Duty & Penalty         4865.13

Central Excise Act       Duty & Penalty         342.39
                         Duty & Penalty         6761.79

Total                                           14871.87

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

Sales Tax Act            1990-91                High Court
                         2005-06 to 2013-14     Joint/Deputy
                                                Commissioner
                         2010-11                Appeal yet to
                                                be filed

Income Tax Act           2010-11                Commissioner
                                                of Income Tax (Appeals)
                         
Customs Act              2012-13                Commissioner of Customs

Central Excise Act       2008-09 to 2013-14     Commissioner Appeals
                         2006-07 to 2011-12     CESTAT
 

* Net of Amount paid under protest Rs 0.33 lakhs

** Net of Amount paid under protest Rs 224.14 lakhs

x. The company did not have any accumulated losses at the end of the financial year, nor had it incurred any cash loss during the financial year or in the immediately preceding financial year.

xi. According to the records produced, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders during the year.

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

xiii. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

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

xvi. On the basis of review of utilization of funds on an overall basis, in our opinion, the term loan taken by the company were applied for the purposes for which the loans were obtained.

xvii. On the basis of review of utilization of funds on an overall basis, in our opinion, the funds raised on short term basis have not been used for the long term investment or vice versa during the year.

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

xix. The Company has not issued any debentures.

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

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company nor have we been informed by the management of any such instance being noticed or reported during the year.

For P.B.Vijayaraghavan & Co.,         For V.Soundararajan & Co.,
Chartered Accountants                 Chartered Accountants
Firm Regn.No.004721S                  Firm Regn.No.003943S
P.B.Srinivasan                        V.S.Ravikumar
Partner                               Partner
(Membership No. 203774)               (Membership No. 018030)

For Krishaan & Co., Chartered Accountants Firm Regn.No.001453S K.Sundar Rajan Partner (Membership No. 208431)

Place : Chennai Date : 30.07.2014