Vardhman Concrete Ltd Directors Report.

To the Members of

Vardhman Concrete Limited

Report on the audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the Standalone Ind AS financial statements of Vardhman Concrete Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2019 and the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information for the year ended on that date.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Companies Act, 2013 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, 2019, and its loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provision of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern:

Without qualifying, we draw attention to note no. 25 of the attached financial statement regarding the financial statements of the Company having been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has been continuously incurring losses since last several years and its networth stands substantially eroded. These conditions indicate the existence of uncertainty that may cast doubt about the Companys ability to continue as a going concern. However, as explained by the Management, the Company has large order in hand hence its ability to continue, inter-alia, is dependent on the generation of cash flow, profits from their execution and on the Companys ability to infuse requisite funds for meeting its obligations.

Emphasis of Matter : a. Overdue Trade Receivables of Rs. 362.80 Lakhs and Advances & deposits (included in other current assets) of Rs. 222.96 lakhs are in our opinion is doubtful of recovery and should be provided for. However, as explained by the Management that the Company is making concerted efforts to recover the same and confident of recovery in due course. Hence no provision is considered necessary at present.

Further aforesaid balances are subject to confirmation/reconciliations and consequent adjustments, if any. As explained by the Management that there would not be any impact on loss for the quarter and year ended March 31, 2019 after such reconciliation. (Refer note no. 27 & 28) b. There are certain legal disputes and claims which are under arbitration proceedings before judiciary authorities. The outcome of these proceedings against the Company may have significant impact on the loss for the quarter and net-worth of the Company as on March 31 2019, the amount whereof is not presently ascertainable. However contingent liability for the same is given under Note No 23.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon. There are no other key audit matters and we do not provide a separate opinion on these matters.

Responsibility of Management and Those Charged with Governance for the Standalone Ind AS Financial Statements

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 Ind AS financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Standalone Ind AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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) In our opinion, 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 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) 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 does not have any pending litigations which would impact its financial position except as stated otherwise.

ii. The Company does not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

For AMAR BAFNA& ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No: 114854W

Sd/-

Amar Bafna

Partner

Membership No: 048639

Place: Mumbai

Date: 30-05-2019

Annexure "A" to the Auditors Report

The Annexure referred to in Independent Auditors Report to the members of the company on the standalone financial statements for the year ended 31st March 2019, we report that:

i. (a) The Company is in the process of updating records showing full particulars, including quantities details and situation of Fixed Assets.

(b) As explained to us by the management, the some of the assets have been physically verified at the end of the period at various sites by the site-in charge and no major discrepancies were noticed to the extent available records. The frequency of verification needs to be strengthened considering the size and the nature of the business of the Company.

(c) According to the information and explanations given to us and on the basis of examination of the records of the company, the title deed of immovable properties are held in the name of the Company.

ii. The company does not have any inventories hence this clause is not applicable.

iii. In our opinion and according to the information and explanations given to us, the Company has not given loan to any party covered in the register maintained under section 189 of the Companies Act.

iv. In our opinion, and according to the information and explanations given to us, the company has not given any loans, guarantees and made any investments to which provision of Section 185 and 186 of the Companies Act applies.

v. According to the information and explanations given to us, the Company has not accepted deposits as referred to in the directives issued by the Reserve Bank of India and the provisions of the section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

vi. As per the information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under section 148 of the Companies Act in respect of any products of the Company.

vii. (a) In our opinion and according to the explanation and information given to us the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Tax Deducted at Source, Service Tax, GST and other statutory dues wherever applicable. The details of undisputed statutory dues (excluding interest) outstanding for a period of more than six months from the date they became payable are as under:

Name of the statute

Period to which the Amount Relates

Amount (in Rs)

a) Maharashtra Value Added Tax

FY 2010-11

1,11,734

b) Service Tax

FY 2010-11

34,18,521

c) Service Tax

FY 2011-12

1,21,720

TOTAL

36,51,975

In addition to above, there are demands raised from Central Processing Centre (CPC) TDS aggregating to Rs. 61,720/- for various financial years. As informed to us the company is in the process of identifying the nature of such demands and whether any rectification/disputes are required to be taken before jurisdictional authorities.

(b) According to the information and explanation given to us, there are no amount of disputed statutory dues which has not been deposited with the concern authority except the following:-

Name of the statute Period to which the Amount Relates Name of Forum where case is pending

Amount (in Rs)

a) Maharashtra Value Added Tax FY 2010-11 Sales Tax (Ass. Dues), Mumbai

17,61,392

viii. In our opinion and according to the information and explanations given to us, the company has neither obtained any loan from financial institution and bank nor issued any debenture. Accordingly, paragraph 3(viii) of the order is not applicable.

ix. In our opinion and according to the information and explanations given to us, the company has not raised any money by the way of public issue/ follow-on offer (including debt instrument) and term loan. . Accordingly, paragraph 3(ix) of the order is not applicable.

x. In our opinion and according to information and explanations given to us, we have not found any fraud by the company or any fraud on the company by its officer/ employees.

xi. In our opinion and according to the information and explanations given to us, the company has not paid/provided any managerial remuneration during the year.

xii. Company is not the Nidhi Company so provision requiring to maintain ratio of net own fund to liability does not apply. Accordingly, paragraph 3(xii) of the order is not applicable.

xiii. In our opinion and according to the information and explanations given to us, all the transaction with related party are in compliance with Section 188 and 177 of Companies Act, 2013. Relevant details have been disclosed in note no 22 to accounts as per disclosure requirements of accounting standards and Companies Act, 2013.

xiv. In our opinion and according to the information and explanations given to us, the company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review.

xv. In our opinion and according to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or any person connected with him. . Accordingly, paragraph 3(xv) of the order is not applicable.

xvi. The company is not NBFC according to section 45-IA of the RBI Act, 1934 so it does not need to obtain registration under the said Act.

For AMAR BAFNA& ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No: 114854W
Sd/-
Amar Bafna
Date : 30th May 2019 Partner
Place: : Mumbai Membership No: 048639

Annexure - B to the Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VARDHMAN CONCRETE LIMITED ("the Company") as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For AMAR BAFNA& ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No: 114854W
Sd/-
Amar Bafna
Date : 30th May 2019 Partner
Place: : Mumbai Membership No: 048639