Sagar Cements

We have audited the attached Balance Sheet of Sagar Cements Limited as
 at 31 st March, 2009 and the Profit and Loss Account for the year ended
 on that date annexed thereto and the Cash Flow Statement for the year
 ended on that date.These financial statements are the responsibility of
 the companys management.. Our responsibility is to express an opinion
 on these financial statements based onouraudit.
 
 We conduct 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.
 
 i. As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of Sub- Section.(4A) of
 Section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 2.  Further to our comments in the Annexure referred to in paragraph I
 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 purpose of our
 audit;
 
 b.  in our opinion, proper books of accounts 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 and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of accounts;
 
 d.  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 21 I of the
 CompaniesAct, 1956;
 
 e.  On the basis of written representations received from the Directors
 as on 3 1st March, 2009 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 3 I st
 March, 2009 from being appointed as a director in terms of Clause (g)
 of Sub Section (I) of Section 274 of the CompaniesAct, 1956;
 
 f.  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 CompaniesAct, 1956 in the manner so required and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i.  in case of the Balance Sheet, of the state of affairs of the
 Company as at 31 st March,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 THE AUDITORS REPORT
 
 Annexure referred to in paragraph I of our Report
 
 1.  The company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 2.  Some of the fixed assets were physically verified during the year
 by the management in accordance with the programme of verification,
 which in our opinion provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanations given to us, no material discrepancies were noticedpn such
 physical verification.
 
 3.  As per information and explanations given by the management during
 the year, the company has not disposed off a substantial part of its
 fixed assets and the going concern assumption of the company is not
 affected.
 
 4.  As explained to us, inventories were physically verified during the
 year by the management. In our opinion, the frequency of verification
 is reasonable.
 
 5.  In our opinion and according to the information and explanations
 gis-en to us, the procedures of 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.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has maintained proper records of inventory and
 the discrepancies noticed on physical verification as compared to book
 records were not material and have been appropriately dealt with in the
 books of account.
 
 7.  According to the information and explanations given to us, during
 the year, the company has not granted or taken any loans, secured
 to/from companies, firms or other parties covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 8.  As the company has not granted or taken loans to / from companies,
 firms or other parties listed in the register maintained under Section
 301 of the Companies Act, 1956, the clause relating to rate of interest
 and other terms and conditions of loans given or taken by the company,
 secured or unsecured, which are prima facie prejudicial to the interest
 of the company is not applicable to the company.
 
 9.  As the company has not taken loans from / granted to
 companies,firms or other parties listed in the register maintained
 under Section 301 of the Companies Act, 1956, the clause relating to
 the regular payment of principal amount and interest is not applicable
 to the company.
 
 10.  As the company has not taken loans from or granted to companies,
 firms or other parties listed in the register maintained under Section
 301 of the Companies Act, 1956, the clause relating to steps taken for
 recovery / payment of the principal and interest on overdue amount of
 more than one lakh, is not applicable to the company.
 
 11.  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. During the course of our audit, no major
 weakness has been noticed in the internal control.
 
 12.  Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that the transactions that need to be entered into the register
 maintained under Section 301 of the Companies Act, 1956 have been so
 entered.
 
 13.  In our opinion and according to the information and explanations
 given to us, the company has not entered into contracts or arrangements
 exceeding Rs.5 lakhs in value with companies in which directors are
 interested as listed in the register maintained under Section 301 of
 the CompaniesAct, 1956.
 
 14.  The company has not accepted deposits from the public during the
 year.
 
 15.  In our opinion, the internal audit functions carried out during
 the year by a firm of Chartered Accountants appointed by the management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 16.  In our opinion and according to the information and explanations
 given to us, the company has made and maintained accounts and records
 prescribed by the Central Government under Section 209 (I) (d) of the
 Companies Act, 1956. However, we have not carried out any detailed
 examination of such records.
 
 17.  According to the records of the company, the company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income-tax, sales tax, wealth-tax,customs
 dutyexcie duty, cess and other statutory dues applicable to it.
 
 18.  The company has no accumulated losses and it has not incurred any
 cash losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 19.  In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 20.  The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 21.  The company is not a chit fund or nidhi or mutual benefit fund /
 society and hence the provisions of Clause 4 (xiii) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the company.
 
 22.  The company is not dealing in or trading in shares, securities,
 debentures and other investments and hence the provisions of Clause 4
 (xiv) of the Companies (Auditors Report) Order,2003 are not applicable
 to the company.
 
 23.  As the company has not given any guarantee for loans taken by
 others from banks or financial institutions, the provisions of Clause 4
 (xv) of the Companies (Auditors Report) Order, 2003 are not applicable
 to the company.
 
 24.  In our opinion, the term loans taken by the company have been
 applied for the purpose for which they were raised.
 
 25.  According to the information and explanations given to us and on
 an over all 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. No long term funds have been used for short term assets.  
 
 26.  According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under Section 301 of the
 CompaniesAct, 1956..
 
 27.  According to the information and explanations given to us, during
 the period covered by our audit report, the company has not issued any
 debentures.
 
 28.  During the year the company has not raised monies by public issue.
 
 29.  According to the information and explanations given to us and the
 books and records examined by us, no fraud on or by the company has
 been noticed or reported during the year.
 
                                           For P. Srinivasan & Co., 
                                              Chartered Accountants
 
 
 Hyderabad                                           K. Ranganathan
 16th June, 2009                                            Partner
                                                         M.No.10842