Chettinad Cement Corporation Ltd Auditor Reports

TO THE MEMBERS OF CHETTINAD CEMENT CORPORATION LIMITED

Report on the Standalone Financial Statements

1 . We have audited the accompanying standalone financial statements of Chettinad Cement Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Financial Statements

2. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. We conducted our audit in accordance with the standards on auditing specified under Section 143(10) of the Act. 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.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors 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 financial control relevant to the Companys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at March 31,2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

8. We draw attention to Note 37 to the standalone financial statements which describe the uncertainty related to the outcome of the regulatory action in respect of non-usage of Jute bags in packing cement as per Jute Packaging Materials (Compulsory use in Packing Commodities) Act 1987. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditors Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraph 3 of the Order.

10. As required by Section 143(3) of the Act, we report that:

a) We have sought and 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, 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;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) The aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on March 31,2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has, in accordance with the generally accepted accounting practice has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Notes 19 and 37 to the stand alone financial statements).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standards.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except a sum of 2.23 Lakhs, which are held in abeyance due to pending legal cases / prohibitary orders from statutory authorities.

	For Raghavan & Muralidharan
	Chartered Accountants
	Firm No.007110S
Place: Chennai	P Raghavan
Date : 12.08.2015	Partner
	Membership No.200885

Annexure to the Independent Auditors Report

(Referred to in paragraph 9 under Report on Other Legal and Regulatory Requirements section of our Report of even date on the accounts of Chettinad Cement Corporation Limited ("the company") for the year ended March 31,2015)

I. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including the quantitative details and situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management in accordance with a phased programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company, nature and value of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

II. In respect of its inventories:

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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 were 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 information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

III. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 and accordingly, the provisions of clause (iii) of paragraph 3 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 system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for the sale of goods and services, and during the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

V. According to information and explanations given to us, the Company has not accepted any deposits and accordingly, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

VI. We have broadly reviewed the books of account 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 148(1) of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

VII. According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:

a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities during the year. There were no undisputed amounts payable in respect of the aforesaid statutory dues outstanding as at March 31,2015 for a period of more than six months from the date they became payable.

b) There are no dues of Wealth Tax which have not been deposited on account of any dispute with the relevant authorities. Details of dues towards Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Value Added Tax and Cess that have not been deposited as at March 31,2015 on account of disputes are as stated below:

Name of the Statue	Nature of Dues	Period to which the amount relates	Forum where the dispute is pending	Amount [ in Lakhs]
	Tax Amount *	1990-91	High Court	1.27
Sales Tax Act	Tax & Penalty **	2005-06 to 2013-14	Joint/Deputy Commissioner	605.20
Income Tax Act	Tax Amount	2006-07, 2008-09 & 2011-12	Commissioner of Income Tax (Appeals)	5812.46
Customs Act	Duty & Penalty	2012-13	Commissioner of Customs	4346.69
Central Excise	Duty & Penalty	2008-09 to 2013-14	Commissioner of Appeals	259.23
Act	Duty & Penalty	2006-07 to 2011-12	CESTAT	6761.79

*Net of amount paid under protest 0.33 lakhs

**Net of amount paid under protest 346.26 lakhs

c) The amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder, have been transferred to such fund within time except a sum of 2.23 Lakhs, which are held in abeyance due to pending legal cases / prohibitary orders from statutory authorities.

VIII. The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

IX. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

X. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the company for loans taken by the Subsidiary from bank and financial institutions are not, prima facie, prejudicial to the interests of the Company.

XI. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

XII. To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Companys operations, no fraud of material significance on the Company or no fraud by the Company has been noticed or reported during the year.

	For Raghavan & Muralidharan
	Chartered Accountants
	Firm No.007110S
Place: Chennai	P Raghavan
Date : 12.08.2015	Partner
	Membership No.200885