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Auditor Report of NCC Ltd.

Mar 31, 2015



We have audited the accompanying standalone financial statements of NCC LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company's branches at Oman, Nepal and Sri Lanka ("the branches").

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 that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making 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 the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

Emphasis of Matter

Attention is invited to Note 44 to the Financial Statements regarding managerial remuneration of previous year. The Company is awaiting approval from Central Government in this regard.

Our opinion is not modified in respect of this matter.

Other Matters

We did not audit the financial statements / information of three (3) branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. 2,131.48 million as at 31 March, 2015 and total revenues of Rs. 144 .36 million for the year ended on that date, as considered in the standalone financial statements. The financial statements / information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, 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 account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the branches audited by the branch auditors appointed under Section 143 (8) of the Act have been forwarded to us and have been properly dealt with by us in preparing this report.

(d) 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 and with the returns received from the branches not visited by us.

(e) 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.

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

(g) 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 information and according to the explanations given to us:

i. The Company has disclosed the impact of all pending litigations on its financial position in its financial statements - refer Note 31 (i)(a) and (b) to the financial statements;

ii. The Company did not have any material foreseeable losses relating to long-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(i) Having regard to the nature of the Company's business/ activities/ results during the year, clause (v) of paragraph 3 of the Order is not applicable to the Company.

(ii) 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) A major portion of the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(iii) In respect of its inventories:

(a) According to the information and explanations given to us, the Management has physically verified the inventories during the year. In our opinion, having regard to the nature of business and location of stocks, 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 were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iv) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans having regard to the rollover of the loans,

(a) the receipts of principal amounts and interest have been regular during the year.

(b) there are no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year-end.

(v) 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 inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any major weaknesses in such internal control system.

(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 sub-section (1) of Section 148 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) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Sales Tax, Income-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited as on 31 March, 2015 on account of disputes are given below:

Period to which Amount

Statute Nature of dues

Sales Tax and VAT Sales Tax Laws



Sales Tax

VAT

VAT

VAT

Sales Tax



VAT

VAT

VAT

VAT

Entry tax

VAT

SCR

VAT

ET

Central Excise Laws Excise Duty



Finance Act, 1994 Service Tax



Finance Act, 1994 Service Tax



Statute Forum where dispute is pending

Sales Tax and Hon'ble High Court of Judicature at Hyderabad for the VAT Laws State of Telangana and the State of Andhra Pradesh



Sales Tax Appellate Tribunal, Andhra Pradesh

Appellate Deputy Commissioner, Hyderabad

Appellate Additional Commissioner, Uttar Pradesh

Deputy Commissioner of Sales tax (Appeals), Assam

Hon'ble High Court of Tamil Nadu



Sr.Joint Commissioner (Appeals), West Bengal

Additional Commissioner (CT); West Bengal

Deputy Commissioner, First Appellate Authority, Delhi

Appellate Deputy Commissioner, Kerala

Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh

Appellate Authority, Bhopal

Appellate Authority, Bhopal

Hon'ble High Court of Orissa

Hon'ble High Court of Orissa

Central Excise CESTAT, Bangalore Laws Hon'ble High Court of Judicature at Hyderabad for the

Finance Act, 1994 State of Telangana and the State of Andhra Pradesh

Finance Act, CESTAT, Bangalore 1994



Statute Period to which Amount the amount involved relates ( Rs. in Million)

Sales Tax and 1994 - 1995 & 16.17 VAT Laws 2005 - 2006

1999 - 2004 &

2006 - 2007 57.00

2006 - 2007 17.96

2005 - 2007 32.88

2005 - 2007 184.10

2006 - 2007 4.36

2008 — 2010

2011 - 2012* 382.93

2010- 2011 203.20

2009 - 2010 157.50

2007 - 2009 2.66

2012 - 2013 495

2008 - 2012 22.51

2011 - 2013 6.86

2007 - 2012 51.53

2007 - 2012 22.06

Central Excise 2007 - 2009 4.73 Laws

Finance Act, 2007 - 2008 130.21 1994

Finance Act, 2005 - 2012 1,802.39 1994

Note: There are no disputed dues of Wealth Tax which have not been deposited as on March 31, 2015.

(d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

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

(ix) In our opinion and according to the information and explanations given to us, having regard to the rollover of term loans and debentures, the Company has not defaulted in repayment of dues to banks and debenture holders except in respect of following dues:

(Rs. In Million)

Particulars Principal Interest Period of delay (in days)

15.98 41.14 1 to 30 days

Banks - Loans 439.62 38.27 31 to 60 days

1,117.80 23.60 61 to 120 days

300.00 - 1 to 30 days

Banks - Debentures 450.00 - 31 to 60 days

600.00 15.71 61 to 90 days

There were no overdue amounts as at March 31, 201 5.

(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 and financial institutions are not, prima facie, prejudicial to the interests of the Company.

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

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For M. Bhaskara Rao & Co For Deloitte Haskins & Sells Chartered Accountants Chartered Accountants (Firm's Registration No.000459S) (Firm's Registration No.008072S)

M V Ramana Murthy M. Ramachandran Partner Partner Membership No. 206439 Membership No. 16399

Hyderabad, May 14, 2015 Kochi, May 14, 2015


Mar 31, 2014

We have audited the accompanying financial statements of NCC 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 the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by branch auditoh of the Company''s oveheas branches at Oman,Nepal and Sri Lanka("the Branches")audited by other auditoh.

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") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affaih) 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.

Auditoh'' 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 consideh 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports on the accounts of the Company''s oveheas branches audited by the branch auditoh which have been forwarded to us and have been properly dealt with, 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 affaih of the Company as at March 31,2014;

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

Emphasis of Matter

Attention is invited to Note 45 to the Financial Statements regarding managerial remuneration. The Company is in the process of obtaining requisite approvals from shareholdeh and the Central Government.

Our opinion is not qualified in respect of this matter.

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 in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matteh 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 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 appeah from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the branches audited by the branch auditoh appointed under Section 228 of the Act have been forwarded to us and have been properly dealt with by us in preparing this report.

(d) 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 and with the returns received from the branches not visited by us.

(e) 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 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affaih).

(f) On the basis of the written representations received from the directoh as on March 31, 2014 taken on record by the Board of Directoh, none of the directoh is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO ThE INDEPENDENT AUDITOR'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) having regard to the nature of the Company''s business/activities/results during the year, clauses (vi), (xii), (xiii), (xiv), (xviii) and (xx) of paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fixed assets:

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

(b) A major portion of the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) According to the information and explanations given to us, the Management has physically verified the inventories during the year. In our opinion, having regard to the nature of business and location of stocks, 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 were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating h3,587.87 million to one party during the year. At the year-end, the outstanding balances of such loans granted aggregated h9,842.33 million (six parties) and the maximum amount involved during the year was h9,842.33 million (six parties).

(b) In our opinion, the rate of interest and other terms and conditions of such loans are prima facie not prejudicial to the interest of the Company.

(c) having regard to rollover of loans given, the receipts of principal amounts and interest have been regular during the year.

(d) There is no overdue amount in respect of the aforesaid loans.

(e) The Company has not taken any loans, secured or unsecured from Companies, firms or other parties covered in the Register maintained

under Section 301 of the Companies Act, 1956 accordingly, clauses(iii) (f) and(g) of paragraph 4 of the Order are not applicable.

(v) 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 inventory and fixed assets and for the sale of goods and services and during the couhe of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in puhuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulah of contracts or arrangements referred to in Section 301 that needed to be entered in to the Register maintained under the said Section have been so entered.

(b) In our opinion, the transactions (excluding loans reported under paragraph (iv) above) exceeding the value of h5 lakhs in respect of any 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, where such market prices are available.

(vii) In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants and an external agency appointed by the Management is commensurate with the size of the Company and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company puhuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanation given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales Tax /VAT, Wealth Tax, Customs Duty, Cess and other material statutory dues applicable to it with appropriate authorities, except for certain delays in the payments of Service Tax dues and tax deducted at source in Income Tax Act, 1961.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax,Customs Duty, Excise Duty, Cess and other material statutory dues in arreah as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax / VAT, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31, 2014 on account of disputes are given below:

Note: There are no disputed dues of Wealth Tax which have not been deposited as on March 31, 2014.

Statute Nature of dues Forum where dispute is pending

Sales Tax and Sales Tax Hon''ble High Court of Andhra Pradesh VAT Laws Sales Tax Sales Tax Appellate Tribunal, Andhra Pradesh

VAT Appellate Deputy Commissioner, Hyderabad

VAT Appellate Additional Commissioner, Uttar Pradesh

VAT Deputy Commissioner of Sales tax (Appeals), Assam

Sales Tax Hon''ble High Court of Tamil Nadu.

VAT Sr.Joint Commissioner (Appeals), West Bengal

VAT Appellate Deputy Commissioner, Kerala

Entry tax Hon''ble High Court of Andhra Pradesh

Central Excise Excise Duty CESTAT, Bangalore Laws

Finance Act, Service Tax Hon''ble High Court of Andhra Pradesh 1994

Finance Act, Service Tax CESTAT, Bangalore 1994

Period to which the Amount involved Nature Nature of Dues amount relates ( Rs in Million)

Sales Tax and Sales Tax 1994 - 1995 16.17 VAT Lax & 2005-2006

Sales Tax 1999 - 2004 57.00 & 2006 - 2007

VAT 2006 - 2007 17.96

VAT 2005 - 2007 18.92

VAT 2005 - 2007 184.10

Sales Tax 2006 - 2007 4.36

VAT 2008 - 2010 172.93

VAT 2007 - 2009 23.99

Entry Tax 2012 – 2013 9.86

Central Excise Excise Duty 2007 - 2009 4.73 Laws

Finance Act Service Tax 2007 - 2008 137.31 1944

Finance Act Service Tax 2005 - 2012 3,092.61 1944

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

(xi) In our opinion and according to the information and explanations given to us, having regard to the rollover of term loans and debentures, the Company has not defaulted in repayment of dues to banks and debenture holdeh except in respect of following dues:

(Rs In Million) Particular Principal Interest Period of delay (in days) Banks – Loans 750.00 70.95 1 to 30 days

750.00* 5.34 31 to 60 days

500.00 - 61 to 90 days

Bank – Debentures - 70.66 1 to 30 days

- 47.89 31 to 60 days

*includes principal amount of h500 million is outstanding for repayment to banks as at March 31, 2014 of which h250 million paid subsequently.

(xii) 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 otheh from banks and financial institutions are not prima facie, prejudicial to the interests of the Company.

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

(xiv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xv) According to the information and explanations given to us and records examined by us, securities/charges have been created in respect of debentures issued.

(xvi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For M. Bhaskara Rao & Co. For Deloitte haskins & Sells Chartered Accountants Chartered Accountants (Firm Registration No.000459S) (Firm Registration No.008072S)

M V Ramana Murthy Ganesh Balakrishnan Partner Partner Membehhip No. 206439 Membership No. 201193

Hyderabad, May 15, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of NCC Limited ("the Company")'' which comprise the Balance Sheet as at March 31'' 2013'' 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'' in which are incorporated the returns for the year ended on that date audited by branch auditors of the Company''s overseas branches at Oman and Nepal ("the Branches") audited by other auditors.

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 Section 211(3C) of the Companies Act'' 1956 ("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.

Auditors'' 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 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 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'' but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us'' and based on the consideration of the reports on the accounts of the Company''s overseas branches audited by the branch auditors which have been forwarded to us and have been properly dealt with'' 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 March 31'' 2013;

(b) in the case of the Statement of Profit and Loss'' of the profit of the Company 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

1. As required by the Companies (Auditor''s Report) Order'' 2003 ("the Order") issued by the Central Government in terms of Section 227(4A)oftheAct'' we give in theAnnexure 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 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(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 and with the returns received from the branches not visited by us.

(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 Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on March 31'' 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on March 31'' 2013'' from being appointed as a director in terms of Section 274(1 )(g) of the Act.

(i) Having regard to the nature of the Company''s business/ activities/results during the year'' clauses (vi)'' (x)'' (xii)'' (xiii)'' (xiv)'' (xviii) and (xx) of the paragraph 4 of the Order are not applicable to the Company.

(ii) 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) A major portion of the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification'' which'' in our opinion'' provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us'' the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year'' in our opinion'' do not constitute substantial part of the fixed assets of the Company and such disposal has'' in our opinion'' not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) According to the information and explanations given to us'' the Management has physically verified the inventories during the year. In our opinion'' having regard to the nature of business and location of stocks'' 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) In our opinion and according to the information and explanations given to us'' the Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt in the books of account.

(iv) In respect of loans'' secured or unsecured'' granted / taken by the Company to companies'' firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956'' according to the information and explanations given to us:

(a) The Company has granted loans repayable as per the terms'' aggregating Rs. 1''093.76 million to five parties during the year. The outstanding balances at the end of the year of such loans aggregated Rs. 6''849.24 million (Six parties) the maximum amount involved during the year was Rs. 6''869.04 million (Six parties).

(b) In our opinion'' the rate of interest and other terms and conditions of such loans are prima facie not prejudicial to the interest of the Company.

(c) The receipts of principal amounts and interest have been regular during the year.

(d) There is no overdue amount in respect of the aforesaid loans.

(e) The Company has not taken any loans'' secured or unsecured from Companies'' firms or other parties covered in the Register maintained under Section 301 of the Companies Act'' 1956 accordingly'' clauses (iii) (f) and (g) of paragraph 4 of the Order are not applicable.

(v) In our opinion and according to the information and explanations given to us'' there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit'' we have not observed any major weakness in such internal system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of section 301 of the Companies Act'' 1956'' to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in to the register maintained under the said section have been so entered.

(b) In our opinion'' the transactions (excluding loans reported under paragraph (iii) above) exceeding the value of Rs. 5 lakhs in respect of any 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'' where such market prices are available.

(vii) In our opinion'' the internal audit function carried out during the year by firm of Chartered Accountants and by an external agency appointed by the Management is commensurate with the size of the Company and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules'' 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act'' 1956 and are of the opinion that'' prima facie'' the prescribed cost records have been maintained. We have'' however'' not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanation given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues'' including Provident Fund'' Investor Education and Protection Fund'' Employees'' State Insurance'' Income-tax'' Sales Tax'' Wealth Tax'' Service Tax'' Custom Duty'' Excise Duty'' Cess and any other material statutory dues applicable to it with the appropriate authorities during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund'' Investor Education and Protection Fund'' Employees'' State Insurance'' Income-tax'' Sales Tax'' Wealth Tax'' Service Tax'' Customs Duty'' Excise Duty'' Cess and any other material statutory dues in arrears as at March 31'' 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax'' Sales Tax/VAT'' Service Tax'' Customs Duty'' Excise Duty and Cess which have not been deposited as on March 31'' 2013 on account of disputes are given below:

Statute Nature of Forum where dispute is pending dues

Sales Tax and VAT Laws Sales Tax Hon''ble High Court of Andhra Pradesh

Sales Tax Sales Tax Appellate Tribunal'' Andhra Pradesh

VAT Appellate Additional Commissioner'' Uttar Pradesh

VAT Deputy Commissioner of Sales tax (Appeals)'' Assam

VAT Commissioner of Commercial taxes'' Jharkhand

Sales Tax Hon''ble High Court of Tamil Nadu. VAT Appellate Deputy Commissioner'' Haryana

VAT Sr.Joint Commissioner (Appeals)'' West Bengal

VAT Appellate Deputy Commissioner'' Kerala

Central Excise Laws Excise Duty CESTAT'' Bangalore

Finance Act'' 1994 Service Tax CESTAT'' Bangalore

Customs Act'' 1962 Customs CESTAT'' Mumbai

Income-tax Act'' 1961 Income tax CIT (Appeals)

Statute Period to which the Amount involved amount relates (Rs.in Million)

Sales Tax and VAT Laws 1994 - 1995 1.67

1999-2004 & 2006-2007 57.00

2005-2009 102.37

2005-2007 184.10

2009-2010 14.97

2006-2007 4.36

2007-2010 40.82

2008-2010 684.63

2007-2009 23.99

2007-2009 5.73

2005-2011 1''103.95

2010-2011 10.29

2005-2012 100.20

There are no disputed dues of Wealth Tax which have not been deposited as on March 31'' 2013.

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

(xi) 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 and financial institutions are not prima facie prejudicial to the interests of the Company.

(xii) 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 by the Company during the year for the purposes for which the loans were obtained.

(xiii) In our opinion and according to the information and explanations given to us'' and on an overall examination of the balance sheet of the Company'' we report that funds raised on short-term basis have'' prima facie'' not been used during the year for long-term investment.

(xiv) According to the information and explanations given to us and records examined by us'' securities/charges have been created in respect of debentures issued.

(xv) To the best of our knowledge and according to the information and explanations given to us'' no material fraud on or by the Company was noticed or reported during the year.

For M. Bhaskara Rao & Co. For Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Registration No.000459S) (Registration No. 008072S)

M V Ramana Murthy Ganesh Balakrishnan

Partner Partner

Membership No. 206439 Membership No. 201193

Hyderabad'' May 22'' 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of NCC Limited ("the Company") as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the returns from Oman, and Nepal branches and certain Joint Ventures ("the Branches") audited by other auditors. 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 the 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 the 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 (CARO) 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 account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Branches not visited by us. The Branch Auditors Reports have been forwarded to us and appropriately dealt with;

c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the Branches;

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) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the 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 March 31, 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.

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

(i) In respect of its fixed assets:

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

(b) A major portion of the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(ii) In respect of its inventories:

(a) According to the information and explanations given to us, the Management has physically verified the inventories during the year. In our opinion, having regard to the nature of business and location of stocks, 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has granted secured or unsecured loans repayable as per the terms, aggregating Rs. 134.14 million to three parties during the year covered in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 5,970.81 million (Four parties) and the year end balance of the loans granted to such parties was Rs. 5,970.81 million (Four parties).

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

(c) The receipts of principal amounts and interest have been regular during the year.

(d) There is no overdue amount in respect of the aforesaid loans.

(e) According to the information and explanations given to us, the Company has not taken loans, secured or unsecured from Companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 and accordingly, paragraphs (iii) (e) (f) and (g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of section 301 of the Companies Act, 1956 to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in to the register maintained under the said section have been so entered.

(b) In our opinion, the transactions (excluding loans reported under paragraph (iii) above) exceeding the value ofRs. 5 lakhs in respect of any 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, where such market prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, the provisions of para 4(vi) of CARO are not applicable to the Company.

(vii) In our opinion, the internal audit function carried out during the year by firms of Chartered Accountants appointed by the Ma nagement have been com mensu rate with the size of the Company and the nature of its business.

(viii) In our opinion and according to the information and explanations given to us, the Management is in the process of compiling and maintaining the cost records of the company pursuant to the rules made by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

(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, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate authorities during the year.

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

(c) According to the information and explanations given to us, details of disputed sales tax, income tax, customs duty, service tax, excise duty and cess which have not been deposited as on March 31, 2012 on account of any dispute are given below:

Statute Nature of Forum where dues dispute is pending

Andhra Pradesh General Sales Tax Hon'ble High Court of Andhra Pradesh Sales Tax Act, 1957 Sales Tax Sales Tax Appellate Tribunal

Sales Tax Sales Tax Appellate Tribunal

Sales Tax Sales Tax Appellate Tribunal

Sales Tax Sales Tax Appellate Tribunal

Uttar Pradesh Value Added Sales Tax Appellate Deputy Commissioner Appeal 1 Tax Act, 2008 Sales Tax Additional Commissioner of Sales tax (Appeals)

Assam Value added tax act, Sales Tax Deputy Commissioner of Sales tax 2003 (Appeals)

Sales tax Deputy Commissioner of Sales tax (Appeals)

Jharkand Value Added Sales Tax Commissioner of Commercial taxes Tax Act, 2005 Sales tax Commissioner of Commercial taxes

Tamil Nadu General Sales Sales Tax Hon'ble High Court of Tamil Nadu. Tax Act, 1959

Haryana Value Added Sales Tax Appellate Deputy Commissioner Tax Act, 2003

West Bengal Value Added Sales Tax Sr.Joint Commissioner (Appeals) Tax Act, 2005

Kerala Value Added Tax Sales tax Assessing Officer Act, 2005 Sales tax Appellate Deputy Commissioner

The Central Excise Act, 1944 Excise Duty CESTAT, Bangalore Finance Act, 1994 Service Tax CESTAT, Bangalore

Service Tax CESTAT, Bangalore

Service Tax CESTAT, Bangalore

Customs Act, 1964 Customs CESTAT, Mumbai

Statute Period to which the Amount involved amount relates (Rs.in Million)

Andhra Pradesh General 1994-95 1.67 Sales Tax Act, 1957 1999-00 1.23

2000-01 5.93

2002-03 1.27

2003-04 14.27

Uttar Pradesh Value Added 2007-08 10.78 Tax Act,2008 2008-09 72.07

Assam Value added tax act 2005-06 144.41 2003 2006-07 39.69

Jharkand Value Added 2007-08 30.54 Tax Act,2005 2008-09 57.02

Tamil Nadu General Sales Tax Act,195 2006-07 4.36

Haryana Value Added Tax Act,2003 2007-08 64.35

West Bengal Value Added Tax Act,2005 2008-09 185.13

Kerala Value Added Tax Act,2005 2007-08 7.04

2008-09 16.95

The Central Excise Act, 1944 Finance Act,1994 2008-09 1.17

2005-06 24.05

2005-09 161.03

2007-08 207.90

Customs Act,1964 2010-11 10.29

(x) The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

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

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares and debentures and other securities. Accordingly, the provisions of para 4(xii) of the CARO are not applicable to the Company.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi or Mutual Benefit Fund/Society. Accordingly, the provisions of clause 4(xiii) of CARO are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. Accordingly, the provisions of para 4(xiv) of the CARO are 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 and 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 by the Company during the year for the purposes 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, funds raised on short-term basis have, prima facie, not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us and records examined by us, securities/charges have been created in respect of debentures issued.

(xx) During the year covered by our audit report, the company has not raised any money by public issues.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. Bhaskara Rao & Co. For Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Registration No. 000459S) (Registration No. 008072S)

M V Ramana Murthy Ganesh Balakrishnan

Partner Partner

Membership No. 206439 Membership No. 201193

Hyderabad, May 29, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of NCC Limited (Formerly Nagarjuna Construction Company Limited) as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto, in which are incorporated the returns from Oman and Nepal branches and certain Joint Ventures ("the Branches") audited by other auditors. 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 the 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 the 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 (CARO) issued by the Central Government of India in terms of section 227(4A) 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 account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Branches not visited by us. The Branch Auditors Reports have been forwarded to us and appropriately dealt with;

c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the Branches;

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 Section 211(3C) of the Companies Act, 1956;

e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the 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 March 31, 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 of the Company for the year ended on that date.

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

Annexure to the Auditors Report (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 its fixed assets.

(b) The fixed assets were physically verified during the year by the management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(ii) In respect of its inventories:

(a) According to the information and explanations given to us, the Management has physically verified the inventory during the year. In our opinion, having regard to the nature of business and location of stocks, 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has granted secured or unsecured loans repayable as per the terms, aggregating Rs. 1147.06 million to six parties during the year covered in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 5558.68 million (seven parties) and the year end balance of the loans granted to such parties was Rs. 5476.10 million (seven parties).

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

(c) The receipts of principal amounts and interest have been regular during the year.

(d) Based on the revised contractual terms in respect of inter corporate loans, there are no overdues amounts.

(e) According to the information and explanations given to us, the Company has not taken loans, secured or unsecured from Companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs (iii) (e) (f) and (g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal system.

(v) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that need to be entered in to the register, maintained under the said section have been so entered.

(b) In our opinion, the transactions (excluding loans reported under paragraph (iii) above) exceeding the value of Rs. 5 lakhs in respect of any 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, where such market prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, the provisions of para 4(vi) of CARO are not applicable to the Company.

(vii) In our opinion, the internal audit function carried out during the year by firms of Chartered Accountants appointed by the management have been commensurate with the size of the company and the nature of its business.

(viii) In our opinion and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any of the products or activity of the company.

(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, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate authorities during the year.

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

(c) According to the information and explanations given to us, details of disputed, income tax, wealth tax, sales tax, service tax, customs duty, excise duty and cess which have not been deposited as on March 31, 2011 on account of any dispute are given below:

Statute Nature of Forum where Period to which the Amount involved dues dispute is pending amount relates (Rs.in Million)

Andhra Pradesh General Sales Tax Honble High Court 1994-95 1.67 Sales Tax Act, 1957 of Andhra Pradesh

Sales Tax Sales Tax Appellate Tribunal 1999-00 1.23

Sales Tax Sales Tax Appellate Tribunal 2000-01 5.93

Sales Tax Sales Tax Appellate Tribunal 2002-03 1.27

Sales Tax Sales Tax Appellate Tribunal 2003-04 14.27

Uttar Pradesh Value Added Sales Tax Appellate Deputy 2007-08 10.53 Tax Act, 2008 Commissioner Appeal 1

Sales Tax Additional Commissioner of 2008-09 72.07 Sales Tax (Appeals)

Assam Value Added Sales Tax Deputy Commissioner 2005-06 144.41 Tax act, 2003 of Sales tax (Appeals)

Jharkand Value Added Sales Tax Commissioner of 2005-06 11.58 Tax Act, 2005 Commercial taxes

Sales Tax Commissioner of Commercial taxes 2006-07 8.67

Sales Tax Commissioner of Commercial taxes 2007-08 7.99

Tamil Nadu General Sales Tax Honble High Court of Tamil Nadu. 2006-07 4.36 Sales Tax Act, 1959

The Central Excise Act, 1944 Excise Duty Commissioner of 1997-98 28.23 Central Excise, Tirupathi

Excise Duty CESTAT, Bangalore 2008-09 1.17

Finance Act, 1994 Service Tax CESTAT, Bangalore 2005-06 24.05

Service Tax Honble High Court of Andhra Pradesh 2005-11 83.77

Service Tax CESTAT, Bangalore 2007-09 207.90

(x) The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

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

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares and debentures and other securities. Accordingly, the provisions of para 4(xii) of the CARO are not applicable to the Company.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi or Mutual Benefit Fund/Society. Accordingly, the provisions of clause 4(xiii) of CARO are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. Accordingly, the provisions of para 4(xiv) of the CARO are 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 and 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 by the Company during the year for the purposes 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, funds raised on short-term basis have, prima facie, not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of share during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us and records examined by us, securities have been created in respect of the debentures issued.

(xx) During the year covered by our audit report, the company has not raised any money by public issues.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



for M. Bhaskara Rao & Co. for Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Registration No. 000459S) (Registration No. 008072S)

M V Ramana Murthy Ganesh Balakrishnan

Partner Partner

Membership No. 206439 Membership No. 201193

Hyderabad, May 30, 2011



 
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