P R Cements Ltd.की ऑडीटर रिपोर्ट

Jun 30, 2011

We have audited the attached Balance Sheet of P.R.CEMENTS LIMITED, VIJAYAWADA, as at 30th June, 2011 and the Profit and Loss Account for the year ended on that date annexed thereto which we signed in reference to this report. 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 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.

1. 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 give 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 1 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 purpose of our audit.

ii) 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.

iii) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except Accounting standard (AS-lS)relating to employee benefits.

v) In our opinion and based on written representation received from directors, and taken on record by the Board of Directors, none of the Directors is disqualified on 30thJune, 2011 from being appointed as a Director in terms of Clause (g) of sub-section (1) to 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, they said accounts read with significant accounting policies and other 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 so far as it relates to balance Sheet, of the state of affairs of the Company as at 30th June 2011 And

b) In so far as it relates to Profit and Loss Account, of the loss of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT :

Referred to as in paragraph 1 of our report of even date.

1. In respect of its Fixed assets;

(a) The company has maintained proper records showing full particulars including details and situation of fixed assets.

(b) As explained to us, all the fixed assets have not been physically verified by the management during the year but there is a program of verification in phased periodical manner at regular intervals, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed of substantial part of the Assets during the year. According to the information and explanations given to us, we are of the opinion that no transactions are affected involving disposal of assets so as to affect going concern status of the company.

2. In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at regular intervals. 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 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.

(c) The company has maintained proper records of inventories. In our opinion and according to the information and explanations given to us, the discrepancies noticed on verification between the physical stocks and the book records were not material, have been properly dealt with in the books of account.

3. In respect of loans secured or unsecured, granted or taken by the company from/to companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956.

a) During the year the company has not taken any loans from companies and other parties listed in the register maintained under section 301 of the Companies Act, 1956. However, the closing balance as at 30th June, 2011 for the loans taken in earlier years is Rs.401.34 lakhs.

b) According to the information and explanations given to us, we are of the opinion, the terms and conditions on which loan taken by the company from such parties listed in the register maintained under section 301 of the companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

c) In respect of loan taken, the principal amount is being repayable on demand and the question of overdue does not arise.

d) There is no overdue amount in respect of loan taken from parties listed in the register maintained under section 301 of the companies Act, 1956, the question of statement on the steps taken for repayment of the principal, and overdue amount of more than one lakh does not arise.

a) During the year the Company has not granted any loans to Companies, firms or other parties covered in the registered maintained under section 301 of the Companies Act, 1956.

1. 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, for the purchase of inventory, fixed assets and for the safe of goods. During the course of audit, based on audit procedures applied, we have not observed any continuing failure to correct major weaknesses in internal controls.

2. In respect of transactions covered under section 301of the Companies act,1956:

(a) In our opinion and according to the information and explanations given to us the transactions, contracts or arrangements that are need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, that the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lakhs with parties covered above during the year have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

3. In our opinion and according to the information and explanations given to us, the company has not accepted any Deposits from public to which the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 framed there under apply.

7. in our opinion, the Company has an independent internal audit system commensurate with the size and nature of its business.

8. We are informed and according to the information and explanations given to us, that the Central government has not prescribed maintenance of cost records under section 209{1) (d) of the Companies Act, 1956.

9. In respect of statutory dues:

(a) According to the records of the company and as per the information and explanations given to us, the company is generally, regular in depositing with appropriate authorities undisputed current Statutory dues including Provident fund, Investor education & protection fund, Employee's state insurance, Income tax, Sales tax, Wealth tax, Custom duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed Amounts payable in respect of Income tax, Wealth tax, Sales tax, Customs duty, Excise duty and Cess that were outstanding, as at 30th June, 2011 for a period of more than six Months from the date they became payable except Sales tax 178.69 lakhs.

(c) According to the information and explanation given to us, there are no dues of Sale tax, Income tax, Custom duty, Wealth tax, Excise duty and Cess, which have not been deposited on account of any dispute except the following-

(Rs.in lakhs) S.no Name of the Statute Nature of the dues Amount Not Deposited Rs. Due to Dispute Rs

1 APGST Act-1957 Sales Tax 26.52 26.52

2 APGST Act-1957 Interest 234.77 234.77

3 Mines Department Interest 85.89 39.54

Total 347.18 300.83 10. In our opinion, the company has accumulated losses at the end of the year exceeding fifty percent of its net worth but not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the records of the Company and according to the information and explanations given to us, there are no dues to the financial institutions and banks. Hence, the question of default does not arise.

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

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Accordingly the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, and debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company,

15. In our opinion, according to the information and explanations given to us, the company has not given guarantees for loans taken by the others from banks or financial institutions.

16. In our opinion, during the year the company has not raised fresh terms loans.

17. In our opinion, according to the information and explanations given to us and on an overall examination of statements and records of the company, that the funds raised on short-term basis have, prima facie, not been used during the year for long-term investment and vice versa.

18. In our opinion, according to the information and explanations given to us, the company has not issued debentures during the period covered by our report.

19. In our opinion, the company has not raised money by way of public issue for any specific purpose during the year.

20. In our opinion, the Company has not made any preferential allotment of shares/securities during the year to parties and companies covered in the register maintained under section 301 of the companies act, 1956.

21. In our opinion, the Company is not required to create/register/modify any security (Charge) as company is not holding/issued any debentures.

22. According to the information and explanations given to us and based on audit procedures performed, no fraud on or by the Company has been noticed during the year.

Place : Uluru for RAMBABU & Co.,

Date : 14/11/2011 Chartered Accountants

Reg.No.002976S

C.SATYAPRAKASH

Partner.

M.No.027183