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Auditor Report of Patel Engineering Ltd.

Mar 31, 2016

TO THE MEMBERS OF PATEL ENGINEERING LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Patel Engineering Limited (“the Company"), which comprise the Balance Sheet as at March 31, 2016, 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.

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, 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 the accounting records, relevant to the preparation and presentation of the standalone 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 there under.

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 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 standalone financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. 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 standalone 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 March 31, 2016, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to:

(a) Note no 4.1 to the standalone financial statements, As per Section 71 of Companies Act, 2013 the Company has created adequate Debenture Redemption Reserve for the Secured Redeemable Non-Convertible Debenture issued by the Company. However, in terms of Section 71 read with Rule 18(7)(''C) of Companies Share Capital and Debentures Rules, 2014, the Company has not made the required deposit/ investment to secure the repayment of debentures maturing during 2015-16. 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, 2016'', issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the “Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, 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;

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 March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B"; and

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

i. the Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements to the extent determinable/ascertainable. - Refer

Note 41 to the standalone financial statements;

ii. the Company has made provision as at March,31,2016 as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long term contract.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.

Referred to in paragraph 1 under "Report on Other Legal and Regulatory requirement" section of our report of even date to the members of Patel Engineering Limited on the Standalone Financial Statements for the year ended March 31, 2016.

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

(b) During the year, fixed assets have been physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.

(c ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties recorded as fixed assets in the books of accounts of the Company as on March 31, 2016 are held in the name of the Company, except for the details given below:

In respect of Freehold lands with gross block and net block of Rs. 30.45 million and Building with gross block of Rs. 5.53 million and net block of Rs. 3.96 million.

ii The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

iii According to information and explanation given to us, the Company''s has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013 . Accordingly Paragraph 3 (iii)(a), 3 (iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.

iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.

v The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly Paragraph 3(v) of the Order is not applicable to the Company.

vi We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost record under sub section (1) of section 148 of the Companies Act in respect to company''s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete

vii (a) According to the information and explanations given to us and the records of the Company examine by us, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax, Municipality Tax, Income Tax and Professional Tax amounting to '' 280.17 million outstanding as on the last day of the financial year for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examine by us, the disputed statutory dues aggregating Rs. 3514.50 Million that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Particulars

Financial Year to which amount relates

Amounts in Million (Rs.)

Forum where dispute is pending

The Sales Tax Act

2001-2002 to 2003-2004

14.99

Appellate Tribunal

2005-2006

0.50

Joint Commissioner of Sales tax (A)-II, Mumbai

2005-2006, 2006-2007 and 20092010

32.78

Appellate Tribunal, Kolkata

2007-2008

10.74

Deputy Commissioner Appellate -III, Mumbai

2007-2008, 2008-2009 and 20102011

28.26

Senior Joint Commissioner , Siliguri

Entry Tax

2010-2011

7.57

High Court

The Finance Act, 1994

2007-2008 to 2012-2013

323.20

Custom , Excise and Service Tax Appellate Tribunal

April 2003 to July 2006

2.54

October 2009 to September 2010

108.31

June 2007 to September 2009

631.88

The Income Tax Act,1961

2007-2008 to 2009-2010 and 2011-2012 to 2012-2013

2353.73

Commissioner of Income Tax (Appeals)

3514.50

viii There are no loans or borrowings payable to government. The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were paid on before the balance sheet date.

Debenture Holders (Rs. in Millions)

Days

Principal

Interest

Axis Bank - Non-Convertible

1-30

-

22.90

31-60

-

13.10

61-90

500.00

54.91

GIC- Non-Convertible

90

-

0.03

LIC- Non-Convertible

1-30

-

6.74

61-90

-

44.22

90

-

37.19

Banks (Rs. in Millions)

Days

Principal

Letter of Credit

Interest

DBS Bank

1-30

-

-

48.96

31-60

1545.67

-

61.26

61-90

122.00

-

118.81

HDFC Bank

1-30

-

-

1.50

31-60

4.05

-

2.86

61-90

33.35

-

10.19

Canara Bank

1-30

8.99

-

75.67

31-60

0.25

-

12.92

Bank Of Baroda

1-30

-

882.39

98.46

31-60

-

131.20

26.07

Bank of India

1-30

48.95

398.52

124.92

31-60

7.82

1095.17

110.06

61-90

2.30

-

64.84

IDBI Bank

1-30

75.00

-

92.68

31-60

-

57.67

61-90

-

-

42.93

Bank of Maharashtra

1-30

1.20

278.28

344.35

31-60

-

51.55

176.52

Ratnakar Bank

1-30

-

-

2.74

31-60

-

-

5.51

Axis Bank

1-30

-

211.36

25.18

31-60

-

80.00

44.62

61-90

-

127.60

43.83

Dena Bank

1-30

250.00

149.91

154.44

31-60

-

-

146.52

61-90

569.21

-

190.01

Indusind bank

1-30

-

-

22.02

31-60

-

-

21.79

61-90

-

-

13.70

State Bank of Patiala

1-30

-

-

36.26

ICICI Bank

1-30

-

1402.57

70.18

31-60

-

648.94

24.42

61-90

-

181.54

-

Society General Bank

1-30

-

-

54.83

31-60

-

-

5.03

61-90

-

-

41.60

Standard Chartered Bank

1-30

47.00

-

80.52

31-60

-

-

102.18

61-90

-

-

71.35

Exim Bank

1-30

-

-

83.75

Corporation Bank

1-30

-

-

51.53

31-60

-

-

16.13

Financial Institutions (Rs. in Millions)

Days

Principal

Interest

Sicom India Ltd

1-30

-

18.57

The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were not paid as at the balance sheet date:

Debenture Holders (Rs. in Millions)

Days

Principal

Interest

Total

GIC- Non-Convertible

1-30

100.00

43.66

143.66

Axis Bank

1-30

100.00

39.10

139.10

Banks (Rs. in Millions)

Days

Principal

Letter of Credit

Interest

Total

DBS Bank

1-30

-

-

9.59

9.59

31-60

-

-

0.11

0.11

61-90

-

-

0.11

0.11

HDFC Bank

1-30

4.42

-

1.03

5.45

31-60

4.38

-

1.07

5.45

61-90

4.34

-

1.10

5.44

Canara Bank

1-30

-

-

7.72

7.72

Bank of Baroda

1-30

-

257.52

7.59

265.11

31-60

-

6.21

-

6.21

Bank of India

31-60

-

22.04

30.38

52.42

IDBI Bank

31-60

400.00

-

4.15

404.15

Bank of Maharashtra

1-30

-

-

0.46

0.46

31-60

-

-

11.16

11.16

Ratnakar Bank

31-60

-

-

2.43

2.43

Axis Bank

1-30

-

25.00

2.39

27.39

31-60

-

-

28.32

28.32

Dena Bank

1-30

-

-

0.02

0.02

Society General Bank

31-60

-

-

22.73

22.73

Standard Chartered Bank

31-60

-

-

34.10

34.10

61-90

12.39

-

0.30

12.69

>90

82.62

-

2.82

85.44

ICICI Bank

1-30

22.50

73.39

-

95.89

Corporation

Bank

1-30

-

-

0.26

0.26

ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

x During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to information and explanation given to us, we have neither come across any instance of fraud on or by the Company, its officers or employees, noticed or reported during the period, nor have we been informed of such case by the management.

xi According to the information and explanations given to us, the Company has paid or provided for managerial remuneration in accordance with the requisite approvals mandated by

the provisions of Section 197 read with Schedule V to the Act.

xii In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company.

Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

xiii According to the information and explanation given to us

and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

xv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

xvi The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Referred to in paragraph 2(f) under "Report on Other Legal and Regulatory requirement" section of our report of even date to the members of Patel Engineering Limited on the Standalone Financial Statements for the year ended March 31, 2016. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

1. We have audited the internal financial controls over financial reporting of Patel Engineering Limited (“the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

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

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial

Reporting

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

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance

Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Vatsaraj & Co.

Chartered Accountants

Firm Registration Number: 111327W

CA B. K. Vatsaraj

Partner

Membership Number: 39894

May 30, 2016

Mumbai


Mar 31, 2015

1. We have audited the accompanying financial statements of Patel Engineering Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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

2. 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(as amended). This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

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

4. We have taken into account the provisions of the Act & the Rules made there under including the accounting standards & matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act & other applicable authoritative pronouncements 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 standalone financial statements are free from material misstatement.

6. 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 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 systems over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Director, as well as evaluating the overall presentation of the financial statements.

7. 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

8. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

9. As required by Companies (Auditor's Report) Order, 2015 issued by the Central government of India in terms of sub-section (11) of the section 143 of the act (hereinafter referred to as the "Order"), and on the basis of such checks of the books & records of the company as we considered appropriate & according to the information & explanation given to us, we give in the annexure a statement on the matters specified in paragraph 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

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

d) In our opinion, the aforesaid 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 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.

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

i) The company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position, in its financial statements.

ii) Company has made provision as at March, 31, 2015 as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii) There has been no delay in transferring amounts, required to be transferred, to the investor education & protection fund by the company during the year ended 31st March 2015.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Patel Engineering Limited for the year ended 31st March, 2015.

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

b) We have been informed to that, the fixed assets including assets of the company purchased in the name of Directors and their relatives and employees have been physically verified at reasonable intervals by the management and no material discrepancies were noticed on such verifications.

2 a) The Inventory has been physically verified by the 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) In our opinion and according to the information and explanations given to us, 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 book records.

3 The Company has granted unsecured loans to 33 companies and 2 firms which are covered in the register maintained under section 189 of the Companies Act, of which the net balance of Rs. 419.2 million of a company has been written off during the year.

a) As per information and explanation given to us, the above loans are repayable on demand, there is no time stipulation for repayment of the Principal and interest. We are also informed that the company has not demanded repayment of either principal or interest during the year.

b) There is no overdue amount in excess of Rs. 1 lac on loans granted remaining outstanding as at the year end, as they are repayable on demand.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of the business for purchase of fixed assets and for sale of goods and services. However the internal controls over purchases of inventory continues to be strengthened further.

5 In our opinion and according to the information and explanations given to us the company has not accepted deposits during the year.

6 We have broadly reviewed the cost records maintained by the company as specified by Central Government under sub section (1) of section 148 of the Companies Act, and we are of 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.

7 a) According to information & explanation given to us and the records of the company examined by us, 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 statutory dues have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax, Municipality Tax, and Income Tax amounting to Rs. 180.05 million outstanding as on the last day of the financial year for a period of more than six months from the date they become payable.

7 b) According to information & explanation given to us & the records of the company examined by us, the disputed statutory dues aggregating Rs. 3,359.24 Million that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Particulars Financial Year to which Amounts in amount relates Million (Rs.)

Sales Tax 2001-2002 to 2003-2004, 2005-2006, 49.86 2006-07 and 2009-2010

2007-2008 11.63

2007-2008, 2008-2009 and 2010-2011 9.61

Entry Tax 2010-2011 7.57

Service Tax 2007-2008 to 2012-2013 323.20

2003-2004 to 2006-2007 2.54

2008-2009 to 2009-2010 108.31

2007-2008 to 2008-2009 631.88

Income Tax 2007-2008 to 2009-2010 and 2011-2012 2205.48

Custom Duty 2011-2012 9.16

Total 3359.24

Particulars Forum where dispute is pending

Sales Tax Appellate Tribunal

Dy Commissioner Appellate –III, Mumbai

Senior Joint Commissioner, Siliguri

Entry Tax High Court

Service Tax CESTAT, New Delhi

CESTAT, Mumbai

CESTAT, Bangalore

CESTAT, Bangalore

Income Tax CIT Appellate

Custom Duty Appellate Tribunal

c) The amount required to be transferred to Investor Education & Protection fund has been transferred within the stipulated time in accordance with the relevant provisions of the Companies Act,1956 (1 of 1956) and rules made there under

8 The company does not have any accumulated losses at the end of the financial year and the company has not incurred cash losses in current financial year and in the immediately preceding financial year;

9 According to the information and explanations given to us, the Company has delayed payment of principal and interest dues to banks, financial institutions and debenture holders. During the year, the delay in interest servicing is: less than 60 days Rs. 1892 Million and more than 60 days Rs. 585 Million. Such delay in payment of principal is Rs. 1452 Million and Rs. 959 Million respectively. The dues were subsequently paid during the year.

At the balance sheet date, the delay in interest servicing is less than 60 days Rs. 161.85 Million and more than 60 days Rs. 24.05 Million. The delay in principal payment for less than 60 days is Rs. 360 Million.

10 In our opinion and according to the information and explanations given to us, the Company has given guarantees for loan taken by others from a bank or financial institution. The terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

11 According to the information and explanations given to us the term loans were applied for the purpose.

12 According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vatsaraj & Co.

Chartered Accountants

FRN: 111327W

CA Mayur Kisnadwala

Place : Mumbai Partner

Date : June 15, 2015 M. No.: 33994


Mar 31, 2014

1. We have audited the accompanying financial statements of Patel Engineering 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

2. 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 flow 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 September 13, 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.

Auditors'' Responsibility

3. 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.

4. 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, 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 accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, 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, 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.

Report on other Legal and Regulatory Requirements

7. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Act, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order.

8. 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 accounts 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 of the Company dealt with by this report are in agreement with the books of accounts of the Company;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(e) On the basis of the written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors 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 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) We have been informed that, the fixed assets including assets of the Company purchased in the name of Directors and their relatives and employees have been physically verified at reasonable intervals by the Management and no material discrepancies were noticed on such verifications.

c) Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

(ii) In respect of its Inventories:

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

b) In our opinion and on the basis of 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. We have been informed by the management, that the discrepancies between the physical stock and book records were not material.

(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 under Section 301 of the Companies Act, 1956:

a) The Company has granted unsecured loans, at call, to two companies (including interest free loan to one company) covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of Rs. 963.193 million during the year and Rs. 963.193 million outstanding at the year end.

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

c) The receipt of principal amounts and interest are at call.

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

e) The Company has taken interest free unsecured loans from two LLP Firms covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of Rs. 447.75 million during the year and Rs. 37.75 Million outstanding at the year end.

f) In our opinion, other terms & conditions are prima facie not prejudicial to the interest of the Company.

g) According to the information and explanations given to us, repayments of the principal have been regularly made as stipulated.

(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 work executed. However the internal controls over accounting of purchases of inventory/fixed assets and consumption needs to be strengthened.

(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 explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

b) As explained to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. 5,00,000/- in respect of any party during the year are at a negotiated price, fixed at reasonable levels, having regard to the technical requirements/quality consideration and alternate source of availability. There are no comparable transactions with the Company of similar nature.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public and consequently, the directives issued by the Reserve Bank of India and the provision of section 58(A), 58(AA) or any other relevant provisions of the Companies Act 1956 and the rules framed there under are not applicable.

(vii) The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the management and is commensurate with the size of the Company and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India, regarding the maintenance of cost records under clause (d) of Subsection (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) In respect of Statutory dues:

a) As per information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Wealth tax, Provident fund, investor education and protection fund, Custom duty, excise duty and Cess with the appropriate authorities except for Sales tax, Service tax and Income tax deducted at source, dues aggregating to Rs. 22.390 million outstanding for period exceeding six months as at the year end.

b) According to the information and explanations given to us, details of dues of sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited as on March 31, 2014 on account of disputes are given below:

Particulars Financial year to Forum where dispute Rs. in which amount relates is pending Million Cess 2007-2008 and 2008-2009 High Court 53.70 Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 57.65

Entry Tax 2010-2011 High Court 11.35

Service Tax December 2005 to September 2009 Appellate Tribunal 654.55

Income Tax 2004-2005 to 2010-2011 High Court 935.06

x. The Company does not have any accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the financial year and in 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 any financial institutions or banks or to debenture holder as at the balance-sheet date.

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, debentures and other securities.

xiii. The Company is not chit/nidhi/mutual benefit fund/society. Accordingly, Clause 4(xiii) of the order is not applicable.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investment. Accordingly, Clause 4(xiv) of the order is not applicable.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks or Financial Institutions. The terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us and on an overall examination, the term loans have been applied for the purpose for which they were raised.

xvii. On the basis of our examination of books of accounts and information and explanations given to us, in our opinion, the funds raised on a short term basis have not been used for long term investment.

xviii. During the year, the Company has made preferential allotment of shares to parties covered in the register maintained Under Section 301 of the Act. The price at which the shares have been issued has been determined as per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009, which in our opinion is not prejudicial to the interest of the Company.

xix. The Company has created securities/charges in respect of secured debentures issued.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our audit carried out in accordance with the generally acceptable auditing practices and as informed by the Management, no fraud on or by the Company has been noticed or reported during the year.

For Vatsaraj & Co. Chartered Accountants FRN: 111327W

CA Mayur Kisnadwala Mumbai Partner May 30, 2014 M. No. 33994


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

1. We have audited the accompanying financial statements of Patel Engineering 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 significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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

3. 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.

4. 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.

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

OPINION

6. In our opinion and to the best of our information and according to the explanations given to us, the 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 Profit and Loss Account, 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.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order.

8. Further to our comments in the Annexure referred to 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 purpose of our audit;

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

(d) in our opinion, the Balance Sheet, the Statement of Proft and Loss Account and the Cash Flow Statement dealt with by this report comply 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 form the Directors, as on March 31, 2013 and taken on record by the Board of Directors, we report that none of the Director is disqualifed as on March 31, 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

b) We have been informed that, the fxed assets including assets of the Company purchased in the name of Directors and their relatives and employees have been physically verifed at reasonable intervals by the Management and no material discrepancies were noticed on such verifcations

c) Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a) Physical verifcation of inventories has been conducted at reasonable intervals by the management.

b) In our opinion and on the basis of information and explanations given to us, the procedures of physical verifcation of inventory 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 inventory. We have been informed by the management, that the discrepancies between the physical stock and book records were not material.

iii. a) The Company has granted unsecured loan at call to two companies covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of Rs. 265.08 million during the year and Rs. 164.52 million outstanding at the year end.

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

c) The receipt of principal amounts and interest are at call.

d) There is no overdue amount in respect of the above loan.

e) The Company has taken interest free unsecured loans from a Company and two LLP Firms covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of

Rs. 1,899.09 million during the year and

Rs. 399.09 million outstanding at the year end.

f) In our opinion, other terms & conditions are prima facie not prejudicial to the interest of the Company.

g) The principal amounts have been paid during the year.

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, fxed assets and for work executed and we have not observed any continuing failure to correct major weakness in such internal control system

v. a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956, have been entered in the register required to-be maintained under that section.

b) As explained to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. 5,00,000/- in respect of any party during the year are at a negotiated price, fxed at reasonable levels, having regard to the technical requirements/ quality consideration and alternate source of availability. There are no comparable transactions with the Company of similar nature.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public and consequently, the directives issued by the Reserve Bank of India and the provision of section 58(A), 58(AA) or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

vii. The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the management and is commensurate with the size of the Company and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India, regarding the maintenance of cost records under clause (d) of subsection (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a) As per information and explanation given to us, the Company is generally regular in depositing undisputed statutory dues, in respect of Provident Fund, Investor Education and Protection Fund, Income tax, sales tax, service tax, Wealth Tax, Excise Duty, Cess and other statutory dues with the appropriate authorities. Though there has been delay of Rs. 86.78 million of statutory dues outstanding beyond six months, pending expert opinion. (Refer note # 26).

B) According to the information and explanations given to us, details of dues of sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited as on March 31, 2013 on account of disputes are given below:

Particulars Financial year to which Forum where dispute is Amount in amount relates pending million

Custom Duty 2001-2002 , 2004-2005 and Commissioner of appeal 28.25 2009-10

Cess 2007-2008 and 2008-2009 High Court 53.70

Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 14.98

Entry Tax 2010-2011 High Court 11.35

Income Tax 2004-2005 to 2010-2011 Commissioner of appeal 732.00

x. The Company does not have any accumulated losses as at the end of the year and has not incurred cash losses during the fnancial year and in the immediately preceding fnancial 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 any fnancial institutions or banks or to debenture holder as at the balance-sheet date.

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, debentures and other securities.

xiii. The Company is not chit/nidhi/mutual beneft fund/ society. Accordingly, clause 4(xiii) of the order is not applicable.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investment. Accordingly, clause 4(xiv) of the order is not applicable.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks or Financial Institutions. The terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us and on an overall examination, the term loans have been applied for the purpose for which they were obtained.

xvii. On the basis of our examination of books of accounts and information and explanations given to us, in our opinion, the funds raised on a short term basis have not been used for long term investment.

xviii. During the year, the Company has not made any preferential allotment of shares to parties covered in the register maintained Under Section 301 of the Act.

xix. The Company has created charged on debentures issued during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our audit carried out in accordance with the generally acceptable auditing practices and as informed by the Management, no fraud on or by the Company has been noticed or reported during the year.

For Vatsaraj & co.

Chartered Accountants

FRN No. 111327W

ca mayur Kisnadwala

Mumbai Partner

May 30, 2013 Membership No.: 33994


Mar 31, 2012

We have audited the attached Balance Sheet of Patel Engineering Ltd. as at March 31, 2012, the Statement of Profit and Loss Account and Cash Flow Statement of the Company 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 purpose of our audit;

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

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss Account and Cash Flow Statement dealt with by this report comply 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 form the Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on March 31, 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 the said accounts together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956 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 case of the Statement of Profit and Loss account, of the Profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow statement, of the cash flows for the year ended on that date.

(Referred to in paragraph 1 of the Auditors' Report of the even date to the members of Patel Engineering Ltd. on the accounts for the year ended March 31, 2012), we report that:

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

b) We have been informed that, the fixed assets including assets of the Company purchased in the name of Directors and their relatives and employees have been physically verified at reasonable intervals by the Management and no material discrepancies were noticed on such verifications.

c) Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a) Physical verification of inventories has been conducted at reasonable intervals by the management.

b) In our opinion and on the basis of information and explanations given to us, the procedures of physical verification of inventory 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 inventory. We have been informed by the management, that the discrepancies between the physical stock and book records were not material.

iii. a) The Company has granted unsecured loan at call to two companies covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to a maximum outstanding of Rs. 264.99 million during the year and Rs. 264.99 million outstanding at the year end.

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

c) The receipt of principal amounts and interest are at call.

d) There is no overdue amount in respect of the above loan.

e) The Company has taken interest free unsecured loans from a Company, a Firm and a Director covered in the register maintained under Section 301 of the Companies Act, 1956, aggregating to a maximum outstanding of Rs. 39.40 million during the year and Rs. nil outstanding at the year end.

f) In our opinion, other terms & conditions are prima facie not prejudicial to the interest of the Company.

g) The principal amounts have been paid during the year.

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, fixed assets and for work executed and we have not observed any continuing failure to correct major weakness in such internal control system.

v. a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to-be maintained under that section.

b) As explained to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. 5,00,000 in respect of any party during the year are at a negotiated price, fixed at reasonable levels, having regard to the technical requirements /quality consideration and alternate source of availability. There are no comparable transactions with the Company of similar nature.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public and consequently, the directives issued by the Reserve Bank of India and the provision of Section 58(A), 58(AA) or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

vii. The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the management and is commensurate with the size of the Company and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India, regarding the maintenance of cost records under clause (d) of subsection (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained.

We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a) As explained to us, the Company is generally regular in depositing undisputed statutory dues, in respect of Provident Fund, Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, details of dues of sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited as on March 31, 2011 on account of disputes are given below:

Particulars Financial year to which amount relates Forum where dispute is pending Amount in millions

Custom Duty 2001-2002 , 2004-2005 and 2009-10 Commissioner of appeal 28.25

Cess 2007-2008 and 2008-2009 High Court 53.70

Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 14.98

x. The Company does not have any accumulated losses as at the end of the year and has not incurred cash losses during the financial year and in 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 any financial institutions or banks or to debenture holder as at the balance-sheet date.

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, debentures and other securities.

xiii. The Company is not chit /nidhi /mutual benefit fund / society. Accordingly, clause 4(xiii) of the order is not applicable.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks or Financial Institutions. The terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us and on an overall examination, the term loans have been applied for the purpose for which they were obtained.

xvii. On the basis of our examination of books of accounts and information and explanations given to us, in our opinion, the funds raised on a short term basis have not been used for long term investment.

xviii. During the year, the Company has not made any preferential allotment of shares to parties covered in the register maintained under Section 301 of the Act.

xix. The Company has created charges on debentures issued during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our audit carried out in accordance with the generally acceptable auditing practices and as informed by the Management, no fraud on or by the Company has been noticed or reported during the year.

For VATSARAJ & CO.

Chartered Accountants

FRN: 111327W

CA Nitesh K Dedhia

Partner

M. No. 114893

Mumbai

September 4, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Patel Engineering Ltd as at March 31, 2011, the Profit and Loss Account and Cash Flow Statement of the Company 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 purpose of our audit;

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

d. in our opinion, the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report comply 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 form the Directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on March 31, 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 together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956 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 case of the profit and loss account, of the profit of the Company for the year ended on that date; and

iii. in the case of Cash Flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 1 of the Auditors Report of the even date to the members of Patel Engineering Ltd on the accounts for the year ended March 31, 2011), we report that:

i. a. The Company has maintained proper records

showing full particulars, including quantitative details and situation of fixed assets.

b. We have been informed that, the fixed assets including assets of the Company purchased in the name of Directors and their relatives and employees have been physically verified at reasonable intervals by the Management and no material discrepancies were noticed on such verifications.

c. Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a. Physical verification of inventories has been conducted at reasonable intervals by the management.

b. In our opinion and on the basis of information and explanations given to us, the procedures of physical verification of inventory 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 inventory. We have been informed by the management, that the discrepancies between the physical stock and book records were not material.

iii. a. The Company has granted unsecured loan at call to two companies covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of Rs 169.26 million during the year and Rs 169.26 million outstanding at the year end.

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

c. The receipt of principal amounts and interest are at call.

d. There is no overdue amount in respect of the above loan.

e. The Company has not taken unsecured loans from Companies Firms or Other parties covered in the register under section 301 of the Act during the year Accordingly, clause 4(iii) (f) and (g) of the order is 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, fixed assets and for work executed and we have not observed any continuing failure to correct major weakness in such internal control system.

v. a. In our opinion and according to the

information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956, have been entered in the register required to-be maintained under that section.

b. As explained to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs 5,00,000 in respect of any party during the year are at a negotiated price, fixed at reasonable levels, having regard to the technical requirements/ quality consideration and alternate source of availability. There are no comparable transactions with the Company of similar nature.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public and consequently, the directives issued by the Reserve Bank of India and the provision of section 58(A), 58(AA) or any other relevant provisions of the Companies Act 1956 and the rules framed there under are not applicable.

vii. The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the management and is commensurate with the size of the Company and the nature of its business.

viii. As explained to us the Central Government has not prescribed the maintenance of the cost records under Section 209(l)(d) of the Companies Act, 1956. Accordingly clause 4 (viii) is not applicable.

ix. a. As explained to us, the Company is generally regular in depositing undisputed statutory dues, in respect of Provident Fund, Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities.

b. According to the information and explanations given to us, details of dues of sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited as on 31st March 2011 on account of disputes are given below:

Particulars Financial year to which amount relates Forum where dispute is pending Rs in millions

Custom Duty 2001-2002, 2004-2005 and 2009-10 Commissioner of appea l28.25

Cess 2007-2008 and 2008-2009 High Court 53.70

Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 14.98

x. The Company does not have any accumulated losses as at the end of the year and has not incurred cash losses during the financial year and in 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 any financial institutions or banks or to debenture holder as at the balance-sheet date.

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, debentures and other securities.

xiii. The Company is not chit/nidhi/mutual benefit fund/ society. Accordingly, clause 4(xiii) of the order is not applicable.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investment. Accordingly, clause 4(xiv) of the order is not applicable.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks or Financial Institutions. The terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us and on an overall examination, the term loans have been applied for the purpose for which they were obtained.

xvii. On the basis of our examination of books of accounts and information and explanations given to us, in our opinion, the funds raised on a short term basis have not been used for long term investment.

xviii. During the year, the Company has not made any preferential allotment of shares to parties covered in the register maintained Under Section 301 of the Act.

xix. The Company has created charged on outstanding debentures issued during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our audit carried out in accordance with the generally acceptable auditing practices and as informed by the Management, no fraud on or by the Company has been noticed or reported during the year.

For Vatsaraj & Co. Chartered Accountants

FRN: 111327W

CA Nitesh K Dedhia Partner

M. No.: 114893

Mumbai September 10, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Patel Engineering Ltd. as at March 31, 2010, the Profit and Loss Account and Cash Flow Statement of the Company 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 purpose of our audit;

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

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report comply 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 March 31, 2010 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on March 31, 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 together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956 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, 2010;

(ii) in case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT

(Referred to in paragraph 1 of the Auditors Report of the even date to the members of Patel Engineering Ltd. on the accounts for the year ended March 31, 2010), we report that:

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

b) We have been informed that, the fixed assets including assets of the Company purchased in the name of Directors and their relatives and employees have been physically verified at reasonable intervals by the Management and no material discrepancies were noticed on such verifications.

c) Fixed Assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a) Physical verification of inventories has been conducted at reasonable intervals by the management.

b) In our opinion and on the basis of information and explanations given to us, the procedures of physical verification of inventory 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 inventory. We have been informed by the management, that the discrepancies between the physical stock and book records were not material.

iii. a) The Company has granted unsecured loan at call to thirty two companies covered in the register maintained under section 301 of the Companies Act 1956, aggregating to a maximum outstanding of Rs. 2801.16 million during the year.

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

c) The receipt of principal amounts and interest there on is as stipulated or called.

d) There is no overdue amount in respect of the above loan.

e) The Company has not taken unsecured loans from Companies Firms or Other parties covered in the register under section 301 of the Act during the year Accordingly, clause 4(iii) (f) and (g) of the order is 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, fixed assets and for work executed and we have not observed any continuing failure to correct major weakness in such internal control system

v. a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956, have been entered in the register required to-be maintained under that section.

b) As explained to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. 5,00,000 in respect of any party during the year are at a negotiated price, fixed at reasonable levels, having regard to the technical requirements/quality consideration and alternate source of availability. There are no comparable transactions with the Company of similar nature.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted

deposits from public and consequently, the directives issued by the Reserve Bank of India and the provision of section 58(A), 58(AA) or any other relevant provisions of the Companies Act 1956 and the rules framed there under are not applicable.

vii. The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the

management and is commensurate with the size of the Company and the nature of its business.

viii. As explained to us the Central Government has not prescribed the maintenance of the cost records under Section 209(1 )(d) of the Companies Act, 1956. Accordingly clause 4

(viii) is not applicable.

ix. a) As explained to us, the Company is regular in depositing undisputed statutory dues, in respect of Provident Fund, Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, details of dues of sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited as on 31st March 2010 on account of disputes are given below:

Particulars Financial year to which Forum where Amount

amount relates dispute is pending (Rs. in million)

Custom Duty 2001-2002,2004-2005 Commissioner of appeal 28.25

and 2009-10

Cess 2007-2008 and 2008-2009 High Court 53.70

Sales Tax 2001-2002 to 2004-2005 Appellate Tribunal 9.66

x. The Company does not have any accumulated losses as at the end of the year and has not incurred cash losses during the financial year and in 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 any financial institutions or banks or to debenture holder as at the balance-sheet date.

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, debentures and other securities.

xiii. The Company is not chit/nidhi/mutual benefit fund/society. Accordingly, clause 4(xiii) of the order is not applicable.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investment. Accordingly, clause 4(xiv) of the order is not applicable.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks or Financial Institutions. The terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us and on an overall examination, the term loans have been applied for the purpose for which they were obtained.

xvii. On the basis of our examination of books of accounts and information and explanations given to us, in our opinion, the funds raised on a short term basis have not been used for long term investment.

xviii. During the year, the Company has not made any preferential allotment of shares to parties covered in the register maintained Under Section 301 of the Act.

xix. The Company has created charged on outstanding debentures issued during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our audit carried out in accordance with the generally acceptable auditing practices and as informed by the Management, no fraud on or by the Company has been noticed or reported during the year.

For Vatsaraj & Co.

Chartered Accountants

July 8, 2010 CA Mayur Kisnadwala

Mumbai Partner

M. No.33994

FRN: 111327W

 
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