India Cements

1.  We have audited the attached Balance Sheet of The India Cements
 Limited as at March 31, 2009 and also the relative Profit and Loss
 Account and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We have conducted our audit in accordance with Auditing Standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956 of India (the Act) and on the basis of such checks
 as we considered appropriate and according to the information and
 explanations given to us, we set out in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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, the Company has kept proper books of account as
 required by law so far, as appears from our examination of those books.
 
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement read together with the notes thereon dealt with by this
 report have been prepared, in all material respects, in compliance with
 the Accounting Standards referred to in sub-section (3C) of Section 211
 of the Act to the extent applicable.
 
 (e) On the basis of explanations and information given to us and
 written representations received from Directors as on March 31, 2009
 and taken on record by the Board of Directors, we report that none of
 the Directors is disqualified as on March 31, 2009 from being appointed
 as a Director in terms of Clause (g) of Sub Section (1) of Section 274
 of the Companies Act, 1956 having regard to the provisions of the
 scheme approved by CDR cell.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon attached thereto give in the prescribed manner
 the information required by the Act and also 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 March 31, 2009;
 
 (ii) In the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) In the case of the Cash Flow Statement, of the Cash Flows for the
 year ended on that date..
 
 ANNEXURE TO AUDITORS REPORT (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT
 OF EVEN DATE TO THE MEMBERS OF THE INDIA CEMENTS LIMITED)
 
 i) a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) As explained to us, the Fixed Assets are physically verified by the
 Management, except furniture and fixtures and office equipments,
 according to a phased programme designed to cover all the items over a
 period of two years, which in our opinion, is reasonable having regard
 to the size of the Company and thenature of its assets. Pursuant to
 the programme, the management during the year has physically verified a
 portion of fixed assets and no material discrepancies between the book
 records and physical inventory have been noticed. It is explained to us
 that the Company proposes to physically verify furniture and fixtures
 and office equipments as per a phased programme..
 
 c) The fixed assets disposed of during the year, in our opinion, do not
 constitute substantial part of the fixed assets of the company and such
 disposal has, in our opinion, not affected the going concern status of
 the Company.
 
 ii) a) According to information and explanations given to us the
 inventories of the Company at all its locations have been physically
 verified during the year by the management. In our opinion, the
 frequency of verification is reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 c) In our opinion and according to the explanations given to us and on
 the basis of our examination of the inventory records, we are of the
 opinion that the Company is maintaining proper records of inventory.
 The discrepancies noticed on physical verification of inventory as
 compared to book records, have been properly dealt with in the books of
 account.
 
 iii) According to the information and explanations given to us the
 company has not granted or taken any loans from companies, firms or
 other parties covered in the register maintained under Section 301 of
 the Companies Act, 1956. Consequently the requirements of clauses (iii)
 (f) and (iii) (g) of Paragraph 4 of the order are not applicable to the
 Company.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate Internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods and services. Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control procedures of the
 Company.
 
 v) a) To the best of our knowledge and belief and according to the
 information and explanations given to us, there were no transactions
 during the year pursuant to the contracts or arrangements referred to
 in Section 301 of the Act. Accordingly, sub clause (b) is not
 applicable.
 
 vi) The Company has during the year accepted deposits from public. In
 our opinion, the company has complied with the provisions of Sections
 58A, 58AA or any other relevant provisions of the Act and Companies
 (Acceptance of Deposit) Rules, 1975. To the best our, knowledge and
 according to the information and explanations given to us, no order has
 been passed by Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal, in this
 regard.
 
 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 cost records and accounts relating
 to materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 and we are of the opinion that prima 1acie the prescribed
 accounts and records have been made and maintained. We have however not
 made a detailed examination of the said records with a view to
 determine whether they are accurate or complete. To the best of our
 knowledge and according to information and explanations given to us the
 Central Government has not prescribed hiaintenance of cost records
 under Section 209(1 )(d) of the Companies Act, 1956 for any other
 activity of the Company.
 
 ix) a) According to the records of the Company, the Company is
 generally regular in depositing the undisputed statutory dues including
 Provident Fund, Employee State Insurance, Investor Education and
 Protection Fund, Income tax, Wealth tax, Customs duty, Excise duty,
 Cess, Sales tax and Service tax and any other statutory dues applicable
 to it with the appropriate authorities though there has been few delays
 in.depositing Sales tax and Service tax.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income tax, Wealth tax,
 Service tax, Sales tax, Customs duty, Excise duty and Cess were in
 arrears as at the year end for a period of more than six months from
 the date they became payable except for Service tax on transporters
 amounting to Rs.14.51 lakhs which has been since paid.
 
 c) According to the information and explanations given to us, details
 of dues of Sales tax, Income tax, Wealth tax, Service tax, Customs
 duty, Excise duty and Cess, which have not been deposited as on 31 st
 March, 2009 on account of any dispute is as per Annexure.
 
 x) The Company does not have any accumulated-losses at the end of the
 financial year and has not incurred cash losses during financial year
 covered by our audit and the immediately preceding financial year.  ¦
 
 xi) According to the information and explanations given to us the debt
 portfolio of the Company was restructured through Corporate Debt
 Restructuring Scheme (CDR), based on the said scheme the Company has
 not defaulted in repayments of its dues to financial institution, bank
 or debenture holders.
 
 xii) According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 xiii) The company is not a chit fund or a nidhi mutual benefit fund /
 society. Therefore, the provisions of clause 4 (xiii) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the company.
 
 xiv) In our opinion, and according to the information and explanation
 given to us, the company is not dealing in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of clause 4{xiv) of the Companies (Auditors Report) Order,
 2003 are not applicable to the Company.
 
 xv) In our opinion, the terms and conditions on which the company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company taking
 into consideration the overall realisable value of assets and current
 business plans.
 
 xvi) In our opinion and according to the information and explanations
 given to us and on an overall examination, the term loans have been
 applied for the purpose for which they were obtained.
 
 xvii) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet of the
 Company, we report that no funds raised on short-term basis have been
 used for long term investment.
 
 xviii) According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in the register maintained under Section 301 of
 the Act.
 
 xix) According to the information and explanations given to us, the
 Company has created the securities or charges in respect of secured
 debentures issued and outstanding at the year-end as per original terms
 of issue notwithstanding modifications reschedulement and other changes
 in the ter/ns as agreed with CDR cell.
 
 xx) The company has not raised any money through public issue during
 the year.
 
 xxi) During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have not come across any fraud on or by
 the company, noticed or reported during the year, nor have we been
 informed of such case by the management except for an instance where
 the Company has noticed a misappropriation by its employee and the
 entire amount of suspected misappropriation has been recovered from the
 concerned employee.
 
 For P. S. SUBRAMANIA IYER & Co., 
                                                  For BRAHMAYYA & CO,
 Chartered Accountants                         Chartered Accountants
 G.HARIHARAN                                           N.SRI KRISHNA
 Partner                                                     Partner
 Membership No. 15071                           Membership No. 26575
 
 Place: Chennai
 Date : 27th June, 2009