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Explore Madras Cements connections « Mar 10
Auditor's Report (Madras Cements) Year End : Mar '11
1.  We have audited the attached Balance Sheet of Madras Cements Ltd.,
 Rajapalayam as at 31st March, 2011, the Profit and Loss Account and
 Cash Flow Statement for the year ended on that date annexed thereto.
 These financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation.  We believe that our audit provides a reasonable basis
 for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of section 227 of the Companies Act, 1956, we have annexed hereto 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:
 
 i. We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii. In our opinion, proper books of account as required by law have
 been kept by the company so far as appears from our examination of
 those books;
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956;
 
 v. As per representations made by the company and its Directors, no
 Director is disqualified from being appointed as a Director in terms of
 clause (g) of sub-section (1) of section 274 of the Companies Act,
 1956;
 
 vi. In our opinion, and to the best of our information and according to
 the explanations given to us, the said accounts 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 and Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 c.  in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 With reference to paragraph 3 of our report to the shareholders of
 Madras Cements Ltd. of even date, in our opinion and to the best of our
 knowledge and belief and as per the information and explanation given
 to us and on the basis of the books and records examined by us in the
 normal course of audit, we report that:
 
 i (a) The company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The management at reasonable intervals has physically verified the
 fixed assets of the company and no material discrepancies were noticed
 on such verification.
 
 (c) The fixed assets disposed during the year were not substantial and
 therefore the going concern status of the company has not been
 affected.
 
 ii (a) The management has conducted physical verification at reasonable
 intervals in respect of its inventory.
 
 (b) The procedure for physical verification of inventory followed by
 the management is reasonable and is 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 verification between the physical stocks and
 the book records were not material.
 
 iii (a) The company has granted loans aggregating to Rs.112.20 crores
 (maximum outstanding at any time during the year Rs.20.00 crores,
 outstanding as on 31st March, 2011 - Rs.12.00 crores) to 1 party listed
 in the register maintained under section 301 of the Companies Act,
 1956.
 
 (b) The rate of interest and other terms and conditions of loans given
 by the company are not, prima facie, prejudicial to the interest of the
 company.
 
 (c) The payment of the principal amounts and the interest wherever
 applicable are regular.
 
 (d) There is no overdue amount with respect to above loans.
 
 (e) The company has taken loans aggregating to Rs.9.06 crores (maximum
 outstanding at any time during the year Rs.3.73 crores, outstanding as
 on 31st March, 2011 - Rs 1.99 crores) from 1 party listed in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (f) The rate of interest and other terms and conditions of loan taken
 by the company are not, prima facie, prejudicial to the interest of the
 company.
 
 (g) The loans given/taken by the company are repayable on demand and
 have been received/paid on demand.
 
 iv The company has an internal control system which is adequate and is
 commensurate with the size of the Company and nature of its business
 for the purchase of inventory and fixed assets and for the sale of
 goods and services.  There are no major weaknesses in internal control
 system.
 
 v (a) Particulars of contracts or arrangements referred to in Section
 301 of the Companies Act, 1956 have been so entered in the register
 required to be maintained under that section.
 
 (b) These transactions have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 vi The company has accepted deposits from the public and the directives
 issued by the Reserve Bank of India and the provisions of section 58A
 and 58AA or any other relevant provisions of the Act and the rules
 framed there under where applicable have been complied with.
 
 vii The company has an internal audit system commensurate with its size
 and nature of its business.
 
 viii The cost accounts and the records prescribed by the Central
 Government under clause (d) of sub-section (1) of section 209 of the
 Companies Act, 1956 have been made and maintained.
 
 ix (a) The company is regular in depositing undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service
 tax, Customs Duty, Excise Duty, Cess and other statutory dues with the
 appropriate authorities.
 
 (b) The disputed statutory dues aggregating to Rs.148.76 crores that
 have not been deposited on account of matters pending before
 appropriate authorities are as under
 
                                                             Amount
 Sl. Name of the statute   Forum where dispute is pending    (Rs. in 
 No.                                                         crores)
 
 1   Income Tax Act        High Court                        13.21
 
                           Assessing Authority                0.04
 
 2   Sales Tax Act         Assistant Commissioner, Appeals    4.35
 
                           Appellate Tribunal                 2.38
 
                           High Court                         0.87
 
                           Assessing Authority                0.50
 
 3   CST Act               Assistant Commissioner, Appeals    0.03
 
                           Appellate Tribunal                 0.10
                        
                           High Court                         0.02
 
 4   VAT Act               High Court                         5.36
 
                           Assistant / Additional 
                           Commissioner                      57.51
 
 5   Central Excise Act &  
     Cenvat Credit Rules   Commissioner, Appeals             14.48
 
                           Appellate Tribunal                42.51
 
                           High Court                         0.19
 
                           Supreme Court                      7.21
 
                                                   Total    148.76
 
 
 x The company has no accumulated losses and has not incurred any cash
 losses during the financial year covered by our audit or in the
 immediately preceding financial year.
 
 xi The company has not defaulted in repayment of dues to financial
 institutions, banks or debentures holders.
 
 xii The company has not granted any loans or 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 The company is not dealing in or trading in shares, securities,
 debentures and other investments. Therefore, the provisions of clause
 4(xiv) of the Companies (Auditors Report) Order, 2003 are not
 applicable to the company.
 
 xv The terms and conditions of the guarantee given by the Company for
 loans taken by others from banks or financial institutions are not
 prima facie prejudicial to the interests of the company.
 
 xvi The Company has raised new term loans during the year and these
 have been applied for the purposes for which they were raised.
 
 xvii The funds raised on short-term basis have not been used for
 long-term investment.
 
 xviii The company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 xix The company has no outstanding amount under Debentures that require
 creation of security/charge.
 
 xx The company has not raised any money by way of public issues during
 the year.
 
 xxi No fraud on or by the company has been noticed or reported during
 the year.
 
 
 For M.S.JAGANNATHAN & N. KRISHNASWAMI           For CNGSN & ASSOCIATES
 Chartered Accountants                            Chartered Accountants
 
 
 
 K. SRINIVASAN                                          C.N. GANGADARAN
 Partner                                                        Partner
 Membership No. : 21510                            Membership No. 11205
 Firm Registration Number:001208S      Firm Registration Number:004915S
 
 
 
 Chennai 
 25-5-2011
 
Source : Dion Global Solutions Limited
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