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Auditor Report of Gayatri Projects Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

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

Management's Responsibility for the Standalone Financial Statements

The Company's 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 to give a true and fair view of the financial position and 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments 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 accounting records, relevant to the preparation and presentation of these financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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 and the Rules made there under including the accounting standards and auditing standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

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 auditor's 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 Company's 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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 31st March 2015, and its profit and cash flows for the year ended on that date.

Emphasis of Matters

(Note Nos. referred hereunder are with reference to respective Notes forming part of the standalone financial statement)

We draw member's attention to the following matters:

i) Note No.31.12 regarding excess managerial remuneration paid by the company.

ii) Note No.31.21 & 31.23 regarding recovery of loans & Advances and work advances given to some of the sub- contractors.

iii) Note No.31.22 regarding conversion of long pending Trade Receivables of Rs.218.51 crores for which necessary statutory formalities / compliances are pending.

iv) Note No.31.26 regarding pending confirmation of balances in respect of certain items and balances reported in the financial statements.

Our Opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 accounts 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, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

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

i. As stated in Note No. 19 & 31.2(a) & (d), the company has disclosed the impact of pending litigations on its standalone financial position.

ii. As per the information and explanations given by the company, the Company did not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.

iii. As per the information and explanations given by the company, the amounts which are required to be transferred to Investor Education & Protection Fund have been transferred.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

i) In respect of Fixed Assets:

a. In our opinion and as per the information and explanations given to us, the Company has maintained proper records showing particulars, including quantitative details and situation of fixed assets;

b. The management of the company has verified the fixed assets at reasonable intervals during the year. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

ii) In respect of Inventory:

a. According to the information and explanations given to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of such 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. As explained to us, the material discrepancies noticed on physical verification of inventories as compared to the book records has been properly dealt with.

iii) According to information and explanations given to us, the Company has granted unsecured Loans of Rs.11,196.73 lakhs to parties covered in the Register maintained under section 189 of the Companies Act, 2013. In respect of such loans,

a. The principal amount is repayable on demand

b. There is no repayment schedule and therefore there is no overdue amount.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventories, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system. However, the internal controls over accounting of consumption and procurement of materials, wastages, material reconciliation need further strengthening.

v) According to the information and explanations given to us, the Company has not accepted any deposits from public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under section 148(1) of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) In respect of statutory dues:

a. According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities during the year. We further state that the undisputed amounts payable in respect thereof outstanding as on 31.03.2015 for a period of more than six months from the date they became payable are as follows:

S.No Name of the Statutory Due Amount in Rs. Delay period

1 Service tax 38.22 lakhs > 6 months

b. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on 31st March, 2015 on account of any dispute, except the following:

Sl. Name of the Statute Name of the Tax Forum where Dispute Amount Rs. No. Due is pending in Lakhs

1 Mines and Minerals (Development Department of Supreme Court and Regulation) Act, 1957 Mines and 1,043.51 Geology

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeals pending before High 3,436.55 Sales Tax Acts of Various States Courts of respective states and Appellate Tribunals and other appropriate authorities.

3 Central Excise Act, 1944 Service Tax Appeals pending before 1,168.69 various Authorities

4 Income Tax Act, 1961 Income Tax Appeal pending before 8,968.58 CIT(Appeals)

c. As per the information and explanations given by the company, the amounts which are required to be transferred to Investor Education & Protection Fund as on 31.03.2015 have been transferred.

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

ix) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has been regular in repayment of dues to banks and financial institutions except in some cases as stated below. The period and amount of continuing default as on the Balance Sheet date is as follows:

Long Term Loans:

Nature of the Loan Period of Default Default amount (Rs. in lakhs) Principal Interest

Term Loans from Banks Up to 30 days 213.33 21.15

Term Loans from Banks 31 to 60 days 679.57 282.56

Short Term Loans:

Nature of the Loan Period of Default Default amount (Rs. in lakhs) Principal Interest

Working Capital from Banks Up to 30 days - 620.51

Working Capital from Banks 31 to 60 days - 1317.85

Letter of Credit Facilities from Banks Up to 30days 19.72 -

Letter of Credit Facilities from Banks 31 to 60 days 1781.25 -

x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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.

xi) Based on our audit procedures and according to the information and explanations given to us, in our opinion, the Term loans availed by the Company were, prima facie, applied for the purpose for which they were obtained.

xii) In our opinion and according to the information and explanations given to us and on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For M O S & Associates LLP

(Formerly M O S & Associates)

Chartered Accountants

Firm Registration No.: 001975S/S200020

S. V. C. Reddy

Place: Hyderabad Partner

Date: 30th May 2015 Membership Number: 224028


Mar 31, 2014

We have audited the accompanying financial statements of Gayatri Projects Limited ("the Company"), which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these 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 Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion:

We invite the attention of members to the following material matters: (Note Nos. referred hereunder are with reference to respective Notes forming part of the financial statements)

i) With regard to non-provision of Joint Venture losses:

As stated in Note no.30.5, regarding non provision for its share of joint venture losses by the Company amounting to Rs.46.30 Crores (Previous Year Rs.46.30 Crores). Had the provision been made for the losses, the reserves and surplus and the short term loans and advances of the Company would have been lower by Rs.46.30 Crores (Previous Year Rs.46.30 Crores). This was also a subject matter of qualification in the auditors'' report for the year ended 31st March, 2013 which was audited by the previous auditors of the Company

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements subject to matters specified in qualified opinion paragraph and emphasis of matter paragraph 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention of the members to Note no. 30.21 regarding pending confirmation of balances in respect of certain items and balances reported in the financial statements. Our opinion is not qualified in respect of this matter.

Other Matter

The financial statements of the Company as at and for the year ended 31st March 2013 have been audited by the Company''s previous auditor; whose report dated 28th May 2013 expressed qualified opinion in respect of joint venture losses. The balances as at 31st March 2013 as per the audited financial statements, regrouped and / or reclassified wherever necessary, have been considered as opening balances for the purpose of these financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of

India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 account as required by law have been kept by the Company so far as 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of the Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e) on the basis of written representations received from the directors as on March 31, 2014 and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

i. In respect of its Fixed Assets:

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

b. The fixed assets have been physically verified during the year by the management and according to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. In our opinion, the Company has not disposed off substantial part of its fixed assets during the year under report and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. According to the information and explanations given to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of such 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. As explained to us, the material discrepancies noticed on physical verification of inventories as compared to the book records has been properly dealt with.

iii. In respect of the Loans secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

a. The Company has granted unsecured loans to four parties covered in the register maintained under section 301 of the Companies Act, 1956. At the year end the balance of loans granted to such parties was '' 13897.17 lakhs and the maximum balance outstanding during the year was Rs. 13897.17 Lakhs.

b. In our opinion and according to information and explanations given to us, the terms and conditions of such loans given by the Company are not prima facie prejudicial to the interest of the company.

c. The principal amount is repayable on demand and there is no repayment schedule and therefore there is no overdue amount.

d. The Company has not taken any loans secured or unsecured, from companies, firms, other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of sub- clauses (f) and (g) of clause 4(iii) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventories, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system. However, the internal controls over accounting of consumption and procurement of materials, wastages, material reconciliation need further strengthening.

v. In respect of the contracts or arrangements referred to in section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in 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 explanation given to us, 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 in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Act and rules framed there under. Hence the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. In our opinion, the internal audit system of the Company though broadly commensurate with the size of the Company and nature of its business, the same needs to be further strengthened for better effectiveness and control.

viii. According to the information and explanations given to us, the Company is in the process of updating cost records in respect of its construction activities for which the maintenance of cost records have been prescribed u/s 209(1)(d) of the Companies Act, 1956 pursuant to the Companies (Cost Accounting Rules) Rules, 2011 notified by the Central Government of India.

ix. In respect of statutory dues:

a. According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Investor education and protection fund, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2014 pending for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on 31st March, 2014 on account of any dispute, except the following:

Sl. Name of the Statute Name of the Tax Forum where Dispute Amount Rs. No. Due is pending in Lakhs

1 Mines and Minerals (Development Department of Supreme Court has directed 1,043.51 and Regulation) Act, 1957 Mines and Department of Mines and Geology Geology to re-assess the seginorage

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeals pending before 3,436.55 Sales Tax Acts of Various States various states

3 Central Excise Act, 1944 Service Tax Appeals pending before 1,168.69 various states

4 Income Tax Act, 1961 Income Tax Appeal pending before 4,955.00 CIT(Appeals)

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

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has been regular in repayment of dues to any banks and financial institutions except in some cases as stated below.The period and amount of continuing default as on the Balance Sheet date is as follows:

Long Term Loans:

Nature of the Loan Period of Default Default amount (Rs.in lakhs) Principal Interest

Term Loans from Banks Upto 30 days 5,261.25 1,263.34

Term Loans from Banks 31 to 60 days 1,261.25 481.84

Short Term Loans :

Nature of the Loan Period of Default Default amount (Rs.in lakhs) Principal Interest

Term Loans and Working Capital from Banks Upto 30 days 10,000.00 234.09

Term Loans and Working Capital from Banks 31 to 60 days — 231.50

xii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause (xii) of paragraph 4 of the Order is not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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. Based on our audit procedures and according to the information and explanations given to us, in our opinion, Term loans availed by the Company was, prima facie, applied for the purpose for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that an amount of Rs.22,622.11 lakhs raised on short term basis have been used for long term investment.

xviii. According to the information and explanation given to us, during theyearunder audit, 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. In our opinion and according to the information and explanations given to us, during the year under audit, the Company has not issued any secured debentures requiring creation of charge to the debenture holders.

xx. The Company has not raised any money by way of public issue during the year. Hence, clause (xx) of paragraph 4 of the Order is not applicable.

xxi. In our opinion and according to the information and explanations given to us and on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For M O S & ASSOCIATES

Chartered Accountants

Firm Registration No: 001975S

S.V.C.Reddy

Place: Hyderabad Partner

Date: 29th May 2014 Membership No: 224028


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gayatri Projects Limited ("the Company"), which comprise the Balance Sheet as at 3Ist March, 20I3 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 2II of the Companies Act, I956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

We invite attention of members to the matters detailed in Note No: 33 regarding non- provision of share of joint venture losses amounting to Rs.46.30 Crores (Previous Year Rs.53.78 Crores). Had the provision been made for these losses, the reserves and surplus and short term loans and advances of the Company would have been lower by Rs.46.30 Crores (Previous Year Rs.53.78 Crores). This was a subject matter of qualification in the auditors'' report for the year ended 31st March, 2012 also.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 3Ist March, 20I3;

b) in the case of the Statement of Profit and Loss, of the profit 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.

Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 2II of the Act and

e) On the basis of written representations received from the directors as on 3Ist March, 20I3 taken on record by the Board of Directors, none of the directors is disqualified as on 3Ist March, 20I3 from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph I under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

i. In respect of its Fixed Assets:

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

b. According to the information and explanations given to us, physical verification of the fixed assets was carried out by the management in a phased periodical manner during the year under report, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No major material discrepancies were noticed on such verification.

c. In our opinion, the Company has not disposed off substantial part of its fixed assets during the year under report and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. According to the information and explanations given to us, the inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such 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 its inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of the Loans secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained u/s 30I of the Companies Act, I956.

a. The Company has given unsecured loans to three parties covered in the register maintained under section 30I of the Companies Act, I956. At the year end the balance of loan granted to such parties was Rs. 460I.55Lakhs and the maximum balance outstanding during the year was Rs. 460I.55 Lakhs.

b. In our opinion and according to the information and explanations given to us, the terms and conditions of such loans given by the Company are not prima facie prejudicial to the interests of the Company.

c. The principal amount is repayable on demand and there is no repayment schedule and therefore there is no overdue amount.

d. The Company has not taken any loans secured or unsecured, from companies, firms, other parties listed in the register maintained under section 30I of the Companies Act, I956. Therefore the provisions of sub- clauses (f) and (g) of clause 4(iii) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system. However, the internal controls over accounting of consumption, wastages, material reconciliation need further strengthening.

v. In respect of the Contracts or arrangements referred to in sec 30I of the Companies Act, I956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 30I of the Companies Act, I956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 30I of the Companies Act, I956 and exceeding the value of Rs. 5 lakhs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. Therefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. According to the information and explanation given to us, the Company is in the process of updating cost records in respect of its construction activities for which the maintenance of cost records have been prescribed u/s 209(I)(d) of the Companies Act, I956 pursuant to the Companies ( Cost Accounting Rules) Rules, 20II notified by the Central Government of India.

ix. In respect of Statutory dues:

a. According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Investor education and protection fund, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 3Ist March, 20I3 pending for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on 3Ist March, 20I3 on account of any dispute, except the following:

Sl. Name of the Statute Name of the Tax Forum where Dispute Amount Rs. No. Due is pending in Lakhs

1 Mines and Minerals (Development Department of Appeal Pending before 1,043.51 and Regulation) Act, 1957 Mines and Geology Supreme Court

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeals pending before 2,313.90 Sales Tax Acts of Various States various states

3 Central Excise Act, 1944 Service Tax Appeals pending before 1,726.78 various states

4 Income Tax Act, 1961 Income Tax Appeal pending before 3,667.87 CIT(Appeals)

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

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institutions and banks as at the Balance Sheet date.

xii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause (xii) of paragraph 4 of the Order is not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were, prima facie, applied during the year for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 3Ist March, 20I3, we report that no funds raised on short term basis have 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 30I of the Companies Act, I956 during the year.

xix. The Company has not issued any debentures during the year and hence clause (xix) of paragraph 4 of the Order is not applicable.

xx. The Company has not raised any money by way of Public Issue during the year and hence clause (xx) of paragraph 4 of the Order is not applicable.

xxi. In our opinion and according to the information and explanations given to us and on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For C.B.MOULI & ASSOCIATES

Chartered Accountants

(Registration No: 002I40S)

MANI OOMMEN

Place : Hyderabad Partner

Date : 28th May, 20I3 Membership No: 24046


Mar 31, 2012

1. We have audited the attached Balance Sheet of GAYATRI PROJECTS LIMITED, as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. 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.

2. 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.

3. As required by the Companies (Auditor's 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.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit ;

b) in our opinion, proper books of accounts, 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) in our opinion and to the best of our information and according to the explanations given to us, they said accounts read together with significant accounting policies and notes to financial statements Subject to Note No. 33 forming part of financial statements regarding non provision for the loss incurred by a Joint Venture 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

ii) in the case of the Statement of Profit and Loss, 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.



(Referred to in paragraph 3 of our report of even date)

i. In respect of its Fixed Assets :

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

b. According to the information and explanations given to us, physical verification of the fixed assets was carried out by the management in a phased periodical manner during the year under report, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No major material discrepancies were noticed on such verification.

c. In our opinion, the Company has not disposed off substantial part of its fixed assets during the year under report and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. According to the information and explanations given to us, the inventories have been physically verified during the year by the management. 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 its inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of the Loans secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

a. The Company has given unsecured loan to a party covered in the register maintained under section 301 of the Companies Act, 1956. At the year end the balance of loan granted to such party was Rs.5773.10 Lakhs and the maximum balance outstanding during the year was Rs. 5773.10 Lakhs.

b. In our opinion and according to the information and explanations given to us, the terms and conditions of such loan given by the Company are not prima facie prejudicial to the interests of the Company.

c. The principal amount is repayable on demand and there is no repayment schedule and therefore there is no overdue amount.

d. The Company has not taken any loans secured or unsecured, from companies, firms, other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of sub-clauses (f) and (g) of clause 4(iii) of the Order are not applicable to the Company

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v. In respect of the Contracts or arrangements referred to in sec 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in 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, 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 in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. Therefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the Company. Hence clause (viii) of paragraph 4 of the Order is not applicable.

ix. In respect of Statutory dues:

a. According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Investor education and protection fund, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2012 pending for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on March 31, 2012 on account of any dispute, except the following :

Sl. Name of the Statute Name of the Due Forum where Dispute Amount Rs. in No. is pending Lakhs

1 Mines and Minerals (Development Department of Mines Appeal Pending from 1043.51 and Regulation) Act, 1957 and Geology Supreme Court

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeal pending from 27.47 Sales Tax Acts of Various States various states

3 Central Excise Act, 1944 Service Tax Appeal pending from 476.14 various states

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

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institutions and banks as at the Balance sheet date.

xii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause (xii) of paragraph 4 of the Order is not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were, prima facie, applied during the year for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at March 31, 2012, we report that no funds raised on short term basis have 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 during the year.

xix. The Company has not issued any debentures during the year and hence clause (xix) of paragraph 4 of the Order is not applicable.

xx. We have verified the end use of money raised by public issue from the draft prospectus filed with SEBI, the offer document and as disclosed in the notes to the financial statements.

xxi. In our opinion and according to the information and explanations given to us and on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For C.B.MOULI & ASSOCIATES

Chartered Accountants

Firm Registration No: 002140S

Place: Hyderabad MANI OOMMEN

Date : 30th May, 2012 Partner

Membership No: 24046


Mar 31, 2011

1. We have audited the attached Balance Sheet of GAYATRI PROJECTS LIMITED, as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. 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.

2. 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.

3. As required by the Companies (Auditor's 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.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit ;

b) in our opinion, proper books of accounts 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 Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the Directors as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes to accounts Subject to Note No.8(a) of II of Schedule 19 regarding non provision for the losses incurred by Joint Venture 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 :

i) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2011;

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 OF M/s GAYATRI PROJECTS LIMITED FOR THE YEAR ENDED 31st MARCH, 2011.

(Referred to in paragraph 3 of our report of even date)

i. In respect of its Fixed Assets:

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

b. According to the information and explanations given to us, physical verification of the fixed assets was carried out by the management in a phased periodical manner during the year under report, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No major material discrepancies were noticed on such verification.

c. In our opinion, the Company has not disposed off substantial part of its fixed assets during the year under report and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. According to the information and explanations given to us, the inventories have been physically verified during the year by the management. 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 its inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of the Loans Secured or Unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

a. The Company has given unsecured loan to a party covered in the register maintained under section 301 of the Companies Act, 1956. At the year end the balance of loan granted to such party was Rs. 5773.10 Lacs and the maximum balance outstanding during the year was Rs. 5773.10 Lacs.

b. In our opinion and according to the information and explanations given to us, the terms and conditions of such loans given by the Company, are not prima facie prejudicial to the interests of the Company.

c. The principal amounts are repayable on demand and there is no repayment schedule and therefore there are no overdue amounts.

d. The Company has not taken any loans secured or unsecured, from companies, firms, other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of sub- clauses (f) and (g) of clause 4(iii) of the Order are not applicable to the Company

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v. In respect of the Contracts or arrangements referred to in sec 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in 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, 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 lacs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. Therefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the Company. Hence clause (viii) of paragraph 4 of the Order is not applicable.

ix. In respect of Statutory dues:

a. According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Investor education and protection fund, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2011 pending for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on March 31, 2011 on account of any dispute, except the following:

Sl. Name of the Statute Name of the Due Forum where Dispute Amount No. is pending Rs. In Lacs

1 Mines and Minerals Department of Appeal Pending from 1043.51 (Development and Regulation) Mines and Geology Supreme Court Act, 1957

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeal pending from Sales Tax Acts of Various States various states 27.47

3 Central Excise Act, 1944 Service Tax Appeal pending from 476.14 various states

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

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institutions and banks as at the Balance sheet date.

xii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause (xii) of paragraph 4 of the Order is not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were, prima facie, applied during the year for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company as at March 31, 2011, we are of the opinion that short term funds have not been used for long term investment.

xviii. The Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. According to information and explanations given to us, we are of the opinion that the price at which shares have been issued is not prejudicial to the interests of the Company.

xix. According to the information and explanations given to us and examined by us, security has been created in respect of debentures issued during the year.

xx. The Company has not raised any money by way of public issue during the year and hence clause (xx) of paragraph 4 of the Order is not applicable.

xxi. In our opinion and according to the information and explanations given to us and on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For C.B.MOULI & ASSOCIATES

Chartered Accountants

Firm Registration No: 002140S

Place: Hyderabad MANI OOMMEN

Date : 22nd August, 2011 Partner

Membership No: 24046










Mar 31, 2010

1. We have audited the attached Balance Sheet of GAYATRI PROJECTS LIMITED, as at 31st March, 2010, the Profit and Loss Account and the 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 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 issued by the Central Government 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.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit ;

b) In our opinion, proper books of accounts 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 Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes to accounts in Schedule 18 Subject to Note No.8(a) and 8(b) of II of Schedule 18 regarding non provisions for the losses incurred by Joint Ventures 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 :

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; 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 OF M/S GAYATRI PROJECTS LIMITED FOR THE YEAR ENDED 31st MARCH, 2010. (Referred to in paragraph 3 of our report of even date)

i.In respect of its Fixed Assets:

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

b. According to the information and explanations given to us, physical verification of the fixed assets was carried out by the management in a phased periodical manner during the year under report, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No major material discrepancies were noticed on such verification.

c. In our opinion, the Company has not disposed off substantial part of its fixed assets during the year under report and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. The inventories have been physically verified during the year by the management. 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. As explained to us, there was no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of the Loans secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

a. The Company has given unsecured interest - free loan aggregating to Rs.5773.10 Lacs to its Joint Venture. At the year end the loan granted to JV aggregates to Rs.5773.10 Lacs. The maximum balance outstanding during the year is Rs.5773.10 Lacs

b. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loan given by the Company, are not prima facie prejudicial to the interests of the Company.

c. The Principal amounts are repayable on demand and there is no repayment Schedule.

d. In respect of the said loan the same is repayable on demand and therefore the question of overdue amount does not arise.

e. The Company has not taken any loans secured or unsecured, from companies, firms, other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of sub- clauses (f) and (g) of clause 4(iii) of CARO are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v. In respect of the Contracts or arrangements referred to in sec 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in 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, 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 Lacs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. Hence clause (vi) of paragraph 4 of the Order is not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the company, hence clause (viii) of paragraph 4 of the Order is not applicable.

ix. In respect of Statutory dues:

a. According to the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess with the appropriate authorities.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2010 pending for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Customs Duty and Cess which have not been deposited on account of any dispute, except the following:

Sl. Name of the Statute Name of the Due Forum where Dispute Amount

No. is pending Rs. In Lacs

1 Mines and Minerals (Development Department of Mines Appeal Pending from 1043.51 and Regulation) Act, 1957 and Geology Supreme Court

2 Central Sales Tax Act, 1956 and Sales Tax/Vat Appeal pending from 258.99 Sales Tax Acts of Various States various states

3 Central Excise Act, 1944 Service Tax Appeal pending from 227.92

various states

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

xi. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institutions and banks as at the Balance sheet date.

xii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause (xii) of paragraph 4 of the Order is not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

xiv. As the Company is not dealing or trading in shares, securities, debentures and other investments, the clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees 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. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, Term loans availed by the company were, prima facie, applied during the year for the purpose for which the loans were obtained other than temporary deployment pending application.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that there are no funds raised on short-term basis have been used for long-term investment.

xviii. According to the information and explanation given to us, 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 not issued any debentures during the year and hence clause (xix) of paragraph 4 of the Order is not applicable.

xx. The Company has not raised any money by way of public issue during the year and hence clause (xx) of paragraph 4 of the Order is not applicable.

xxi. In our opinion and according to the information and explanations given to us and, on our examination of books and records, no fraud on or by the Company has been noticed or reported during the year.

For C.B.MOULI & ASSOCIATES

Chartered Accountants

(Registration No: 002140S)

MANI OOMMEN Partner Membership No: 24046 Place : Hyderabad

Date : 28th May 2010.

 
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