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Auditor Report of Punj Lloyd Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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

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

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

5. 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.

6. 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 controls 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone 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 aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015, its loss and cash flows for the year ended on that date.

Emphasis of Matters

9. We draw attention to the following matters in the Notes to the standalone financial statements:

a. note 35 (b), regarding recoverability of unbilled revenue (work-in-progress) on account of claims aggregating to Rs. 735.80 crores which are subject matter of arbitration;

b. note 35 (c), regarding recoverability of unbilled revenue (work-in-progress) on account of claims aggregating to Rs. 391.09 crores and enforcement of the performance security amounting to Rs. 171.08 crores by the customer at a project of the Thailand branch, as reported by the independent auditors of the said branch; and

c. note 35 (a), in respect of deductions made/ amount withheld by some customers aggregating to Rs. 49.35 crores which are being carried as trade receivables. These amounts are outstanding due to disputes with the customers.

Pending ultimate outcome of the above matters which is presently unascertainable, no adjustments have been made in the accompanying financial statements. Our opinion is not modified in respect of these matters.

Other Matter

10. We did not audit the financial statements of certain branches and an unincorporated joint venture whose financial statements reflect total assets (net of elimination) of Rs. 4,314.20 crores as at 31 March 2015, total revenues (net of eliminations) of Rs. 1,973.98 crores and net cash flows aggregating to Rs. 50.89 crores for the year ended on that date, as considered in the aforesaid standalone financial statements. The financial statements of these branches and an unincorporated joint venture have been audited by other auditors whose reports and additional information thereon have been furnished to us by management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and an unincorporated joint venture, is based solely on the reports of the such auditors. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

12. 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 purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

c. the reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

d. the Balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

e. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

f. on the basis of the written representations received from the directors as on 31 March 2015 and 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; 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 information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its standalone financial position, as detailed in Note 31 to the standalone financial statements;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts, as detailed in Note 39 to the standalone financial statements ; and

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

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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 is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company's products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:

Amount Period to which Name of the statute Nature of dues outstanding the amount (Rs. crores) relates

Andhra Pradesh General Sales tax 0.30 1998-99 to Sales Tax Act, 1956 on the material 2000-01 components of the works contract

Andhra Pradesh General Sales tax on 0.90 2004-05 the material Sales Tax Act, 1956 components of the works contract andsuppression cement jumowei

Andhra Pradesh General Misuse of Form 1.87 2001-02 to G against purchase 2004-05 SalesTaxAct,1956 olcemnt

Andhra Pradesh General Purchase against 0.27 2003-04 SaJtesTax Act J956 Form G not disclosed

Andhra Pradesh General Misuse of Form G 5.89 2002-03 to against purchase of 2004-05 SalesTaxAct,1956 cemsT and LDO

Name of the statute Forum where dispute is pending

Andhra Pradesh General Sales Tax Appellate Tribunal, Vizag Sales Tax Act, 1956

Andhra Pradesh General Sales Tax Appellate Tribunal, Vizag Sales Tax Act, 1956

Andhra Pradesh General Sales Tax Appellate Tribunal, Vizag Sales Tax Act,1956

Andhra Pradesh General Sales Tax Appellate Tribunal, Vizag Sales Tax Act,1956

Andhra Pradesh General Sales Tax Appellate Tribunal, Vizag Sales Tax Act, 1956

Amount Period to Which Name of Nature of dues outstanding the amount the statute (Rs. crores) relates

Bihar Entry Tax Act,1993 Demand raised for 0.21 2009-10 entry tax for VAT paid items

Bihar Value Added Tax Act, Disallowance of labour 25.51 2009-10 and other 2005 charges

Bihar Value Added Tax Act, Disallowance of ITC, 20.84 2010-11 classification 2005 and purchase

Bihar Value Added Tax Act, Disallowance of labour 4.20 2011-12 2005 and other charges

Bihar VAT and CST Act, Disallowance of sales- 0.15 2011-12 1956 in-the course of import

Chhattisgarh Entry Tax Act, Entry tax on materials and 0.26 2005-06 and 1976 equipment 2006-07

Gujarat Sales Tax Act, 1969 CST against sales in transit 0.07 2002-03

Gujarat Central Sales Tax Refund assessment not 4.43 2008-09 Act, 1956 appreciated by the department hence raised addrtional_demand

Karnataka Sales Tax Act, Interest on entry tax 0.12 2002-03 to 1957 2004-05

Kerala Value Added Tax Act, Disallowance of deduction 0.18 2006-07 2003

Kerala Value Added Tax Act, Tax on stock transfer 1.59 2012-13 2003 and central purchase

Madhya Pradesh Sales tax on the material 0.05 2003-04 Commercial Tax components of the works Act, 1994 contract Madhya Pradesh Entry Tax Entry tax on materials and 0.01 2003-04 Act, 1976 equipment

Madhya Pradesh Value Disallowance of sales 0.80 2009-10 and in course of Added Tax Act, import and assessment 2010-11 2002 under higher taxrate

Madhya Pradesh Entry Tax Entry tax on materials and 0.35 2009-10 and Act, 1976 equipments 2010-11

Punjab Value Added Tax Disallowance of labour 0.14 2008-09 Act, 2005

Punjab Value Added Tax Disallowance of sales- 24.33 2011-12 Act, 2005 in-transit

Punjab Value Added Tax Disallowance of sales- 37.33 2012-13 Act, 2005 in-transit

Uttar Pradesh Central Sales Misuse of Form C against 0.74 1998-99 purchase TaxAct,1956 of equipments

Rajasthan Tax on the Entry Entry tax on materials and 1.00 2005-06 of Goods in to equipments the Local Area Act, 1957

Uttar Pradesh Trade Tax Entry tax demand and 0.05 1999-00, Act, 1948 penalty 2000-01 and 2004-05

Name of the statute Forum where dispute is pending

Bihar Entry Tax Act,1993 Commissioner of Commercial Tax, Patna

Bihar Value Added Tax Act,2005 Commercial Tax Tribunal, Patna

Bihar Value Added Tax Act, 2005 Joint Commissioner Appeals, Patna

Bihar Value Added Tax Act, 2005 Joint Commissioner Appeals, Patna

Bihar VAT and CST Act,1956 Joint Commissioner Appeals, Patna

Chhattisgarh Entry Tax Act, 1976 Supreme Court, New Delhi

Gujarat Sales Tax Act, 1969 Deputy Commissioner (Appeals), Vadodara

Gujarat Central Sales Tax Act, 1956 Commercial Tax Tribunal,Ahmadabad

Karnataka Sales Tax jt.Commercial Appeal Banglore Act,1957

Kerala Value Added Deputy Commissioner of Commercial Tax, Tax Act, 2003 Ernakulum and Commercial Tax Tribunal, Kochi

Kerala Value Added Deputy Commissioner of Tax Act,2003 Commercial Tax, Ernakulum

Madhya Pradesh Commercial High Court, Bhopal Tax Act, 1994

Madhya Pradesh Entry High Court, Bhopal Tax Act, 1976

Madhya Pradesh Value Added Tax Act, 2002 Commercial Tax Tribunal, Bhopal

Madhya Pradesh Entry Tax Act, 1976 Commercial Tax Tribunal, Bhopal

Punjab Value Added Tax Act, 2005 Deputy Commissioner,Patiala

Punjab Value Added Tax Act, 2005 Commercial Tax Tribunal, Chandigarh

Punjab Value Added Tax Act, 2005 Deputy Commissioner, Patiala

Uttar Pradesh Central Sales Tax Act, 1956 Commercial Tax Tribunal, Agra

Rajasthan Tax on the Entry of Goods in to the Local Area Act, 1957 High Court, Jodhpur

Uttar Pradesh Trade Tax Act, 1948 Commercial Tax Tribunal, Agra

Amount Period to which Name of the statute Nature of dues outstanding the amount (Rs. crores) relates

Uttar Pradesh Trade Tax Penalty imposed 0.11 2010-11 for non-submission Act, 1948 of Behti

West Bengal Value Added Non-submission 23.60 2009-10 Tax Act, 2003 of E-I forms and addition in turnover

Haryana Local Area Entry tax on 0.40 2003-04 Development capital goods Tax Act, 2000

The Finance Act,2004 the Service and Penalty for 18.87 2003-04 Tax Rules late payment of service 2005-06 and tax 2006-07

Central Excise Act, 1944 Non-payment of 0.73 2006-07 excise duty

Name of the statute Forum where dispute is pending

Uttar Pradesh Trade Tax Commercial Tax Tribunal,Agra Act, 1948

West Bengal Value Added Joint Commissioner (Appeal), Midnapur Tax Act, 2003

Haryana Local Area Development Supreme Court, New Delhi Tax Act, 2000

The Finance Act, 2004 and CESTAT, Delhi the Service Tax Rules

Central Excise Act, 1944 Commissioner of Custom and Central Excise, Mumbai

(c) The Company has transferred the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder within the specified time.

(viii) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the immediately preceding financial year; however, in the current financial year, the Company has incurred cash losses.

(ix) During the year, the Company has delayed in repayment of principal and interest to banks, financial institutions and debenture- holders. The delays with respect to principal and interest upto 90 days amounted to Rs. 168.86 crores and Rs. 87.19 crores, respectively; the delays between 91 to 180 days amounted to Rs. 64.90 crores and Rs. 44.06 crores, respectively and the delays between 181 to 382 days amounted to Rs. 12.05 crores and Rs. 1.45 crores, respectively, to banks, financial institutions and debenture-holders.

As at the year end, the Company has defaulted in repayment of loan and interest aggregating to Rs. 71.28 crores and Rs. 21.27 crores respectively to banks, financial institutions and debenture-holders. As at the balance sheet date, the periods of delays in these cases were up to 382 days and 168 days respectively.

(x) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker Chandiok & Co LLP (Formerly Walker, Chandiok & Co) Chartered Accountants Firm's Registration No.: 001076N/N500013

per Anupam Kumar Partner Membership No.: 501531

Place: Gurgaon Date: 22 May 2015


Mar 31, 2014

Report on the Financial Statements

1. We have audited the accompanying financial statements of Punj Lloyd Limited, ( ACI-the Company ACI-), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and 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. Management is responsible for the preparation of these financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 ( ACI-the Act ACI-) 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. 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 auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 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 and based on the considerations of the reports of the other auditors on the financial statements of the branches and an unincorporated joint venture as noted below, 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014 ADs-

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

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

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to:

a. note 41 to the financial statements, regarding recoverability of claims aggregating to Rs. 733.98 crores which are subject matter of conciliation. Pending ultimate outcome of the matter which is presently unascertainable, no adjustments have been made in the accompanying financial statements.

b. As reported by the Independent Auditors of the financial statements of the Company''s branch in Thailand, we draw attention to note 42 to the financial statement, regarding recoverability of claims aggregating to Rs. 389.86 crores. Pending ultimate outcome of the matter which is presently unascertainable, no adjustments have been made in the accompanying financial statements.

c. note 36 to the financial statements in respect of deductions made / amount withheld by some customers aggregating to Rs. 53.91 crores which are being carried as trade receivables. These amounts are outstanding due to disputes with the customers and presently the ultimate outcome of these disputes is unascertainable, however since the Company is of the view that these amounts are recoverable, no provision is required against the same.

Report on Other Legal and Regulatory Requirements

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

9. 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 ADs-

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 and proper returns adequate for the purposes of our audit have been received from branches and an unincorporated joint venture not visited by us. ADs-

c. we have received the reports on the financial statements of the branches and an unincorporated joint venture audited under section 228 by other auditors and have appropriately dealt with these while forming our audit opinion.

d. the financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches and an unincorporated joint venture not visited by us ADs-

e. in our opinion, the financial statements comply with the Accounting Standards notified under the Companies Act, 1956 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 ADs- and

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

Other Matter

10. We did not audit the financial statements of certain branches, and an unincorporated joint venture, included in the financial statement, whose financial statements reflect total assets (net of elimination) of Rs. 4,417.00 crores as at March 31, 2014, total revenues (net of eliminations) of Rs. 3,455.27 crores and net cash flows aggregating to Rs. 22.31 crores for the year then ended. These financial statements have been audited by other auditors whose audit reports have been furnished to us by the management, and our audit opinion on the financial statements of the Company for the year then ended to the extent they relate to the financial statements not audited by us as stated in this paragraph is based solely on the audit reports of the other auditors. Our opinion is not qualified in respect of this matter.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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 is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4 (iii) (b) to 4 (iii) (d) of the Order are not applicable.

(e) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In respect of transactions made in pursuance of such contracts or agreements exceeding the value of Rupee five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved, no comparison of prices paid can be made with prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size 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 for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) 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 other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess on account of any dispute, are as follows:

Name of the Statue Nature of dues Amount Outstanding in crores (RS.)

Andhra Pradesh General Sales Sales tax on the material components of the 0.26 Tax Act 1956 works contract

Andhra Pradesh General Sales Sales tax on the material components of the 2.23 Tax Act 1956 works contract.

Andhra Pradesh General Sales Mis-use of concessional Form G against 2.19 Tax Act 1956 purchase of Cement

Andhra Pradesh General Sales Mis-use of concessional Form G against purchase 5.89 Tax Act 1956 of Cement and LDO

Andhra Pradesh General Sales Purchase of Cement escape turnover 0.44 Tax Act 1956

Bihar Value Added Tax Act 2005 Disallowance of labour and other charges 25.49

Bihar Value Added Tax Act 2005 Disallowance of labour and other charges 0.31

Entry tax on materials and equipment Chhatisgarh Entry Tax Act 1976 0.23 brought in to the state

Gujarat Central Sales Tax Act Refund assessment not appreciated by the 2.55 1956 department and raised additional demand

Gujarat Sales Tax Act 1969 CST against Sales in Transit 0.07

Haryana Value Added Tax Act Disallowance of deduction 5.81 2003

Interest on Entry Tax imposed by DCCT, Karnataka Sales Tax Act,1957 0.23 Bangalore

Kerala Value Added Tax Act Disallowance of deduction 3.91 2003

Sales tax on the material components of the MP Commercial Tax Act, 1994 0.05 works contract

Entry tax on materials and equipment MP Entry Tax Act 1976 0.01 brought into the state

VAT on sales in course of import and interest MP Value Added Tax Act 2002 3.18 and penalty

Entry tax on materials and equipment MP Entry Tax Act 1976 0.43 brought into the state

Maharashtra Value Added Tax VAT on transportation, travelling charges and 1 09 Act 2002 penalty

Punjab Value Added Tax 2005 Disallowance of sales in transit 18.62

Rajasthan Tax on the entry of Goods Entry Tax demand on materials equipment 0.91 in to the Local Area Act 1999

Uttar Pradesh, Central Sales Tax Misuse of Form C against purchase of 0.74 Act 1956 equipment

Uttar Pradesh Trade Tax Act 1948 Entry Tax demand and penalty 0.03

Uttar Pradesh Trade Tax Act 1948 Entry Tax demand 0.02

Uttar Pradesh Trade Tax Act 1948 Penalty imposed for non- submission of Behti 0.11

West Bengal Value Added Tax, Non-submission of E-I forms and addition in 26.87 2003 turnover

The Income Tax Act, 1961 Demand by Income tax department -

Name of Statute Period to which Forum where dispute is the amount Pending Relates

Andhra Pradesh General Sales 1998-99 and Sales Tax Appellate Tribunal Tax Act 1956 2000-01 Hyderabad, Andhra Pradesh

Andhra Pradesh General Sales 2001-02 and Assessing Officer, Hyderabad, Tax Act 1956 2002-03 Andhra Pradesh

Andhra Pradesh General Sales 2001-02 to Sales Tax Appellate Tribunal, Tax Act 1956 2004-05 Vizag, Andhra Pradesh

Andhra Pradesh General Sales 2002-03 to Deputy Commissioner Sales Tax Tax Act 1956 2004-05 Appeal, Vizag, Andhra Pradesh.

Andhra Pradesh General Sales Sales Tax Appellate Tribunal, Tax Act 1956 2004-05 Vizag, Andhra Pradesh

Bihar Value Added Tax Act 2005 2009-10 Commercial Tax Tribunal

Bihar Value Added Tax Act 2005 2011-12 Joint Commissioner Appeal

Chhatisgarh Entry Tax Act 1976 2005-06 Bilaspur High Court, Chhatisgarh

Gujarat Central Sales Tax Act Deputy Commissioner (Appeals)- 1956 2008-09 Vadodara

Gujarat Sales Tax Act 1969 Deputy Commissioner (Appeals)- 2002-03 Vadodara

Haryana Value Added Tax Act 2003-04 to Sales tax Appellate Tribunal 2003 2005-06 Chandigarh, Haryana

Karnataka Sales Tax Act,1957 Joint Commissioner (Appeal), 2003-04 Bangalore

Kerala Value Added Tax Act 2005-06 and Deputy Commissioner (Appeals)- 2003 2006-07 Ernakulam, Kerala

MP Commercial Tax Act, 1994 2003-04 High Court, Bhopal, MP

MP Entry Tax Act 1976 2003-04 High Court, Bhopal, MP

MP Value Added Tax Act 2002 2009-10 and Additional Commissioner 2010-11 Commercial Tax, Gwalior

MP Entry Tax Act 1976 2009-10 and Additional Commissioner 2010-11 Commercial Tax, Gwalior

Maharashtra Value Added Tax 2006-07 and Joint Commissioner (Appeal) Act 2002 2008-09 Nasik, Maharashtra

Punjab Value Added Tax 2005 2011-12 Commercial Tax Tribunal

Rajasthan Tax on the entry of Goods High Court of Jodhpur, in to the Local Area Act 1999 2005-06 Rajasthan

Uttar Pradesh, Central Sales Tax 1998-99 Assessing Officer, Mathura Act 1956

Uttar Pradesh Trade Tax Act 1948 2000-01 and Commercial Tax Tribunal, Agra 2004-05

Uttar Pradesh Trade Tax Act 1948 1999-00 Joint Commissioner Appeal, Mathura

Uttar Pradesh Trade Tax Act 1948 2010-11 Tribunal, Uttar Pradesh Trade Tax

West Bengal Value Added Tax, Joint Commissioner (Appeal), 2003 2009-2010 Midnapur (WB)

The Income Tax Act, 1961 2004-05 to CIT Appeals 2006-07

Name of the Statue Nature of dues Amount Outstanding in crores (RS.)

Central Excise Act, 1944 Non-payment of excise duty 0.73

The Finance Act 2004 and the Penalty for late payment of service tax 18.87 Service Tax Rules

Name of Statute Period to which Forum where dispute is the amount Pending Relates

Central Excise Act, 1944 Commissioner of Custom and 2006-07 Central Excise, Mumbai

The Finance Act 2004 and the 2003-04, 2005-06 CESTAT, Delhi Service Tax Rules and 2006-07

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial year.

(xi) In our opinion, the Company has not defaulted in repayment of dues to debenture-holders during the year ADs- the Company has defaulted in repayment of principal and interest amounting to Rs. 56.81 crores to banks and financial institutions for maximum period upto 74 days. As at year end, the Company has defaulted in repayment of below mentioned dues to the Banks which have been paid subsequent to the balance sheet date:

Particulars Amount in crores (Rs.) Period of delays

Repayment of Loan to Banks 9.58 Upto 80 days

Payment of Interest to Banks 0.53 Upto 74 days

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

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

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has created security in respect of the outstanding debentures issued during previous years. No debentures have been issued during the year.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker Chandiok ACY- Co LLP

(Formerly Walker, Chandiok ACY- Co)

Chartered Accountants

Firm Registration No. 001076N

per David Jones

Partner

Membership No. 098113

Place: Gurgaon

Date: May 20, 2014


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying Financial Statements of Punj Lloyd Limited, ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and 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. Management is responsible for the preparation of these Financial Statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including 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 auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 and based on the considerations of the reports of the other auditors on the financial statements of the branches and an unincorporated joint venture as noted below, 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to:

a) note 36 to the Financial Statements in respect of deductions made/ amount withheld by some customers aggregating to Rs 58.02 crores which are being carried as trade receivables. These amounts are outstanding due to dispute with the customers and presently the ultimate outcome of these disputes cannot be determined, however since the Company is of the view that these amounts are recoverable, no provision is required against the same.

b) note 41 to the Financial Statements, regarding recoverability of claims aggregating to Rs. 243.03 crores and liquidated damages of Rs. 7.30 crores pertaining to earlier years and due as at March 31, 2013. These dues being subject matter of a conciliation, the Company has assessed recoverability of these amounts based on the terms and conditions implicit in the contract, and legal opinions from independent counsel. on the basis of such assessment, management is of the opinion that the claims are tenable and liquidated damages would be waived by the customer, accordingly no adjustments have been made in the accompanying Financial Statements.

Report on Other Legal and Regulatory Requirements

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

9. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches and an unincorporated joint venture not visited by us;

c. we have received the reports on the financial statements of the branches audited under section 228 by other auditors, an un-incorporated joint venture and have appropriately dealt with these while forming our audit opinion;

d. the Financial Statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

e. in our opinion, the Financial Statements comply with the accounting Standards referred to in sub-section (3C) of Section 211 of the Act and

f. on the basis of written representations received from the directors, as on March 31, 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the AcL

Other Matter

10. We did not audit the financial statements of certain branches and an un-incorporated joint ventures included in the Financial Statements, whose financial statements reflect total assets (net of eliminations) of Rs. 4,482.54 crores as at March 31, 2013; total revenues (net of eliminations) of Rs. 2,805.00 crores and net cash flows aggregating to Rs. 40.95 crores for the year then ended. These financial statements have been audited by other auditors whose audit reports have been furnished to us by the management/other auditors, and our audit opinion on the Financial Statements of the Company for the year then ended to the extent they relate to the financial statements not audited by us as stated in this paragraph is based solely on the audit reports of the other auditors. our opinion is not qualified in respect of this matter.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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 is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii) (b) to 4(iii) (d) of the order are not applicable.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Ac! accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the act have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved, no comparison of prices paid can be made with prevailing market prices at the relevant time.

(vi) the Company has not accepted any deposits from the public within the meaning of Sections 58a and 58AA of the act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the order are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with its size 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 for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of Company''s products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) 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 other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a delay in a few cases. Further, no material undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) The dues outstanding in respect of sales-tax, income-tax, custom duty, wealth-tax, excise duty, cess on account of any dispute, are as follows:

Name of the statute Nature of dues Amount outstanding (in Rs crores)*

Andhra Pradesh General Sales Tax Sales tax on the material 0.70 Act, 1956 components of the works contract

Andhra Pradesh General Sales tax Sales tax on the material 2.22 Act, 1956 components of the works contract

Andhra Pradesh General Sales tax Penalty for mis-use of 4.52 Act, 1956 concessional Form G against purchase of LDO

Andhra Pradesh General Sales tax Penalty for mis-use of 2.19 Act, 1956 concessional Form G against purchase of Cement

Uttar Pradesh, Central Sales tax Penalty against Form C usage 0.49 Act, 1956 for purchase of machinery

Uttar Pradesh, Central Sales tax Entry tax demand 0.05 Act, 1956

Name of the Statute Period to which the Forum where the dispute amount relates is pending

Andhra Pradesh General Sales Tax Act 1956 1998-99, Sales tax appellate tribunal 2000-01 and Hyderabad, andhra Pradesh 2004-05

Andhra Pradesh General Sales Tax Act 1956 2001-02 to Assessing Officer, 2003-04 Hyderabad, andhra Pradesh

Andhra Pradesh General Sales Tax Act 1956 2002-03 Sales tax appellate to tribunal, Vizag, andhra 2004-05 Pradesh

Andhra Pradesh General Sales Tax Act 1956 2001-02 Sales tax appellate tribunal to Vizag, andhra Pradesh. 2004-05

Uttar Pradesh Central Sales Tax Act 1956 1998-1999 Additional Commissioner (appeal), Mathura

Uttar Pradesh Central Sales Tax Act 1956 1999-00 and Sales tax appellate 2000-01 tribunal, agra

*(Net of amounts paid under protest)

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial year.

(xi) In our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture-holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

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

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has created security in respect of the outstanding debentures issued during the previous years. No debentures have been issued during the year.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co

Chartered Accountants

Firm Registration No.: 001076N

per David Jones

Partner

Membership No.: 098113

Place of signature: New York

Date: May 29, 2013


Mar 31, 2012

1. We have audited the attached balance sheet of Punj Lloyd Limited ('the Company') as at March 31, 2012 and also the statement of profit and loss and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. We did not audit the financial statements of certain branches of the Company, whose financial statements (net of eliminations) reflect total assets of Rs. 3,570.32 crores as at March 31, 2012, total revenue of Rs. 1,224.28 crores and negative cash flows amounting to Rs. 139.91crores for the year then ended. We also did not audit the financial statements of certain unincorporated joint ventures of the Company, whose financial statements (net of eliminations) reflect, to the extent of the proportionate share of the Company, total assets of Rs. 107.44 crores as at March 31, 2012, total revenue of Rs. 177.89 crores and negative cash flows amounting to Rs. 37.11 crores for the year then ended. These financial statements and other financial information of branches and unincorporated joint ventures not audited by us have been audited by other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts included for such branches and unincorporated joint ventures, is based solely on the report of other auditors.

5. (a) Attention is invited to note 45 to the financial statements. The Company had during an earlier year taken credit for a claim of Rs. 243.03 crores on a contract, based upon management's assessment of cost overrun arising due to design changes and had also not accounted for liquidated damages amounting to Rs. 7.30 crores deducted by the customer since it is of the view that the delay is attributable to the customer. Due to the uncertainty over ultimate collection and recoverability of the said amounts, we are unable to comment on the same and also the appropriateness of non accounting of liquidated damages.

(b) Attention is invited to note 46 to the financial statements. The Company during the previous year has taken credit for a claim of Rs. 89.73 crores on two contracts, which are pending acceptance by the customers. Due to the uncertainty over ultimate collection and recoverability of the said amounts, we are unable to comment on the same.

Our audit report on the financial statements for the year ended March 31, 2011 was also qualified in respect of the above matters.

6. Without qualifying our opinion, we draw attention to note 36 to the financial statements regarding deductions made/ amounts withheld by some customers and pending billing against certain old work in progress aggregating to Rs. 308.57 crores on various accounts which are being carried as trade receivables and inventories. Due to dispute / pending acceptance of unbilled work in progress and other pending matters with the customers, the ultimate outcome of the above matters cannot presently be determined although the Company is of the view that such amounts are recoverable and hence no provision is required there against.

7. Without qualifying our opinion, we draw attention to note 41 to the financial statements regarding the aggregate assets of Rs. 593.05 crores as at March 31, 2012 as appearing in the projects in Libya Branch, where during the year, as represented to us, the overall political and economic environment appears to be getting stabilized after a period of civil and political disturbance and unrest. The accounts of Libya Branch have been reviewed by another auditor in Libya. The management, after considering the present environment and economic conditions in Libya, is confident of realization of above amounts and accordingly, no adjustments have been considered necessary in these accounts

8. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. 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 and proper returns adequate for the purposes of our audit have been received from branches and unincorporated joint ventures not visited by us. The branches and unincorporated joint ventures Auditor's Reports have been forwarded to us and have been appropriately dealt with;

iii. The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches and unincorporated joint ventures;

iv. Except for the possible effects of the matter referred to in paragraph 5 above, in our opinion, the balance sheet, statement of profit and loss 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,

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

vi. Except for the possible effects of the matter referred to in paragraph 5 above ,in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph [3] of our report of even date

Re: Punj Lloyd Limited ("the Company")

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

(b) As informed to us, the physical verification of part of the Plant and Machinery which was due in the last year in accordance with a phased programme of verifying all fixed assets once in three years, has been completed during the year and no material discrepancies were identified on such verification. In our opinion, the frequency of physical verification is reasonable having regard to the size of the company and the nature of the assets.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain project materials and fixed assets purchased are of specialized nature and alternate sources do not exist for obtaining quotations thereof, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, that need to be entered into the register maintained under Section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved, no comparison of prices paid can be made with prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

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

(viii) 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 records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income- tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities though there have been slight delays in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income- tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Period to which the Forum where dispute is Name of the statute Nature of dues Amount amount relates pending

Andhra Pradesh Sales Tax on the material components of 0.70 1998-1999, 2000-2001 Sales Tax Appellate Tribunal General Sales Tax Act, the works contract. &2004-2005 Hyderabad, Andhra Pradesh 1956

Andhra Pradesh Sales Tax on the material components of 2.22 2001-2002 to 2003- CTO, Hyderabad, Andhra General Sales Tax Act, the works contract. 2004 Pradesh

1956

Name of the Statute Nature of dues Amount Period to which the Forum where dispute is amount relates pending Andhra Pradesh Penalty for use of G Form against material 2.19 2001-2002 to 2004- Sales Tax Appellate Tribunal, General Sales Tax Act, purchases & Penalty for suppression of 2005 Vizag, Andhra Pradesh 1956 Turnover

Andhra Pradesh Penalty for use of G Form against material 4.52 2002-2003 to 2004- Appellate Deputy General Sales Tax Act, purchases & Penalty for suppression of 2005 Commissioner, Vizag, 1956 Turnover Andhra Pradesh

Uttar Pradesh Central Penalty against Form C usage for purchase 0.28 1998-1999 Allahabad, High Court,Uttar Sales Tax Act, 1956 of machinery Pradesh

Uttar Pradesh Central Penalty against Form C usage for purchase 0.21 1998-1999 Sales Tax Appellate Tribunal, Sales Tax Act, 1956 of machinery Agra, Uttar Pradesh Uttar Pradesh Trade Tax Entry tax demand 0.05 1999-2000 to 2000- Joint Commissioner, Appeal, Act, 1948 2001 Mathura, Uttar Pradesh

Uttar Pradesh Trade Entry tax demand & Sales tax form not 0.13 2004-2005 & 2010-2011 Allahabad, High Court,Uttar Act, 1948 accepted by the department Pradesh

Uttar Pradesh Trade Entry tax demand 0.01 2002-2003 and 2004- Commercial tax tribunal, Act, 1948 2005 Agra

Gujarat Sales Tax Act, Differential Sales Tax for non submission of 6.21 1998-1999 to 1999- Sales Tax Appellate Tribunal, 1969 statutory forms. 2000 Ahmedabad, Gujarat.

Gujarat Sales Tax Act, CST against sales in transit 0.07 2002-2003 Dy.Commissioner 1969 (Appeals),Baroda Haryana Local Area Entry Tax demand 0.40 2003-2004 Supreme Court, New Delhi Development Tax Act, 2000

Maharashtra VAT Act, VAT on Transportation, Travelling Charges 0.46 2006-2007 Joint Commissioner Appeal, 2002 & Penalty Nasik, Maharashtra

Madhya Pradesh Entry Entry Tax demand 0.06 2003-2004 High court, Gwalior bench, Tax Act, 1976 Madhya Pradesh

Haryana Value Added Disallowance of deduction 5.40 2003-2004 & 2004-2005 Sales Tax Appellate Tribunal Tax Act, 2003 Chandigarh, Haryana Kerala VAT Act, 2003 Disallowance of deduction 3.91 2005-2006 & 2006-2007 Dy.Commissioner (Appeals) -Ernakulam, Kerala Rajasthan Tax on the Entry Tax on Material Equipment 0.91 2005-2006 High Court, Jodhpur, Entry of Goods into the Rajasthan Local Area Act, 2001

Rajasthan Tax VAT Act Disallowance of Exempted Sales 21.03 2008-2009 Dy.Commissioner and CST Act (Appeals),Kota, Rajasthan Chhattisgarh Entry Tax Entry tax demand on material component 0.23 2005-2006 Supreme Court, New Delhi Act, 1976

Name of the statute Nature of dues Amount Period to which the Forum where amount dispute is relates pending Karnataka Sales Tax Interest on Entry Tax imposed by DCCT, 0.23 2003-2004 Joint Commissioner Act, 1957 Bangalore (Appeals), Bangalore

West Bengal Vat Act, Disallowance of deduction 1.15 2007-2008 Sr.Joint Commissioner, 2003 Midnapur Circle, West Bengal

Delhi Vat Act, 2004 Disallowance of Labour and Services 39.42 2009-10 & 2010-11 Sp.Commissioner , Dept of Trade and Taxes Delhi Central Excise Act, Non-Payment of Excise duty 0.96 2006-2007 Commissioner of Customs 1944 and Excise

The Finance Act, 2004 Penalty for late deposit of Service Tax & 18.87 2003-2004 to 2006- CESTAT, Delhi and the Service Tax Disallowance of deduction for value of 2007 Rules goods sold

Bihar VAT and CST Act Non-Submission of Statutory Forms 22.87 2009-10 Patna HighCourt Bihar VAT and CST Non-Submission of Statutory Forms & 12.48 2008-09 to 2010-11 Commissioner of Act & Bihar Entry Tax Demand and Penalty Imposed for Entry Tax Commercial Tax-Patna Act,1993

Madhya Pradesh VAT Disallowance of Brought Forward Input 0.95 2008-09 Madhya Pradesh High Court Act Credit The Income Tax Act, Demand by Income Tax Department 45.36 2004-05 to 2006-07 CIT Appeals 1961

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution, banks and debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by subsidiaries/ joint ventures from banks and financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

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

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us, security and charge has been created by the Company on the outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. BATLIBOI & CO.

Firm registration number: 301003E

Chartered Accountants

Per Anil Gupta

Partner

Membership No.: 87921

Place: Gurgaon

Date: April 30, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of Punj Lloyd Limited (the Company) as at March 31, 2010 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. We did not audit the financial statements of certain branches of the Company, whose financial statements (net of eliminations) reflect total assets of Rs. 25,878,126 thousand as at March 31, 2010, total revenue of Rs. 43,321,320 thousand and negative cash flows amounting to Rs.

1,628,928 thousand for the year then ended. These financial statements and other financial information of branches not audited by us have been audited by other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts included for such branches, is based solely on the report of other auditors.

5. Attention is invited to note 31 of schedule M to the financial statements. The Company has during the year taken credit for a claim of Rs. 2,430,300 thousand on a contract and has also not accounted for liquidated damages amounting to Rs. 654,891 thousand deducted by the customer in view of the reasons stated in the said note. Due to the uncertainty over ultimate collection of the said amounts, we are unable to comment on the same.

6. Attention is drawn to note 17 of schedule M to the financial statements. The Company has during the year accounted for profit of Rs. 1,187,476 thousand on sale of investments in a company which is not in compliance of Accounting Standard 9 on Revenue Recognition issued by the Institute of Chartered Accountants of India.

7. Without qualifying our opinion, we draw attention to Note 11 in schedule M to the financial statements regarding deductions made/ amounts withheld by some customers aggregating to Rs. 587,863 thousand (Previous year Rs. 605,083 thousand) on various accounts which are being carried as sundry debtors. The Company is also carrying Work in Progress inventory of Rs. 31,455 thousand (Previous year Rs. 95,455 thousand) relating to these customers. The ultimate outcome of the above matters cannot presently be determined although the Company is of the view that such amounts are recoverable and hence no provision is required thereagainst.

8. Further to our comments in the Annexure referred to above, we report

that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us. The Branch Auditors Reports have been forwarded to us and have been appropriately dealt with;

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches;

iv. In our opinion, the balance sheet, 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, except to the extent of our comments in para 5 and 6 above.

v. On the basis of the 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 directors 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.

vi Without considering our observations in para 5 above, the impact whereof on the Companys profits is not presently ascertainable, had the impact of our observations in para 6 above been considered, profit for the year after tax would have been Rs. 2,554,345 thousand instead of Rs. 3,674,021 thousand and reserves & surplus at the end of the year would have been Rs. 33,986,824 thousand, instead of Rs. 35,106,500 thousand. Subject to above, in our opinion and on consideration of reports of other auditors on separate financial statements and on the other financial information and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;

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 cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph [3] of our report of even date Re: Punj Lloyd Limited (the Company)

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

(b) Part of the fixed assets were physically verified by the management during the year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year except inventory comprising of work in progress- projects. According to the information and explanations given to us, and also keeping in view the nature of the operations of the Company, the inventory of work in progress- projects cannot be physically verified.

(b) 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses 4 (iii) (b, c and d) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses 4 (iii) (f and g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company

(iv) As per the information and explanations given to us, certain project materials and fixed assets purchased are of specialized nature for which comparable prices are not available. Read with the above, in our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities though there have been slight delays in a few cases.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statute Nature of dues Amount

in INR 000

Andhra Pradesh General Sales Tax on the material components of 6,987

Sales Tax Act, 1956 the works contract.

Andhra Pradesh General Sales Tax on the material components of 29,896

Sales Tax Act, 1956 the works contract.

Andhra Pradesh General Penalty for use of G Form against 18,688

Sales Tax Act, 1956 material purchases

Andhra Pradesh General Penalty for use of G Form against 42,333

Sales Tax Act, 1956 material purchases

Andhra Pradesh General Penalty for suppression of Turnover 3,248

Sales Tax Act, 1956

Andhra Pradesh General Penalty for suppression of Turnover 2,872

Sales Tax Act, 1956

Assam Value Added tax Sales tax demand for disallowance of 6,510

Act, 2003 deductions

Uttar Pradesh Central Sales Penalty against Form C usage for 2,593

Tax Act, 1956 purchase of machinery

Uttar Pradesh Central Sales Penalty against Form C usage for 3,293

Tax Act, 1956 purchase of machinery

Delhi Sales Tax Act, 1975 Sales tax demand on internet services 39,877

Gujarat Sales Tax Act, 1969 Differential Sales Tax for non submission 62,087

of statutory forms.

Haryana Local Area Entry Tax demand 3,995

Development Tax Act, 2000

Kerala General Sales Tax Differential Sales Tax for dis-allowance of 3,645

Act, 1963 deduction on purchases u/s 3 of the CST Act, 1956.

Maharastra VAT Act, 2002 VAT on Transportation, Travelling 8,721

Charges & Penalty

Madhya Pradesh Entry Tax Entry Tax demand 588

Act, 1976

Madhya Pradesh Commercial Sales tax on the material components of 470

Tax Act the works contract

Haryana Value Added Tax Disallowance of deduction 53,985

Act, 2003

Kerala VAT Act, 2003 Disallowance of deduction 83,775

Tamilnadu General Sales Tax Sales tax on Platform manufactured at 7,180

Act, 1959 site subject to tax

Rajasthan Tax on the Entry Entry Tax on Material Equipment 16,393

of Goods into the Local Area Act, 2001

The Finance Act, 2004 and Penalty for late deposit of Service Tax 108,068

the Service Tax Rules

The Finance Act, 2004 and Penalty for late deposit of Service Tax 64,728

the Service Tax Rules

The Finance Act, 2004 and Disallowance of deduction for value of 15,915

the Service Tax Rules goods sold

Uttar Pradesh Trade Tax Entry Tax demand 760

Act, 1948





Name of the statute Period to which the Forum where dispute is pending

amount relates

Andhra Pradesh General Sales Tax Act, 1956 1998-1999, 2000-2001 Sales Tax Appellate Tribunal, and 2004-2005 Hyderabad, Andhra Pradesh

Andhra Pradesh General Sales Tax Act, 1956 2001-2002 to 2003-2004 High Court, Hyderabad, Andra Pradesh

Andhra Pradesh General Sales Tax Act, 1956 2001-2002 to 2004-2005 Sales Tax Appellate Tribunal, Vizag, Andhra Pradesh

Andhra Pradesh General Sales Tax Act, 1956 2002-2003 to 2004-2005 Appellate Deputy Commissioner, Vizag, Andhra Pradesh

Andhra Pradesh General Sales Tax Act, 1956 2003-2004 to 2004-2005 Sales Tax Appellate Tribunal, Vizag, Andhra Pradesh

Andhra Pradesh General Sales Tax Act, 1956 2004-2005 Appellate Deputy Commissioner,

Vizag, Andhra Pradesh

Assam Value Added tax Act, 2003 2006-2007 Appellate Deputy Commissioner

(Appeals), Guwahati, Assam

Uttar Pradesh Central Sales Tax Act, 1956 1998-1999 Allahabad High Court, Uttar Pradesh

Uttar Pradesh Central Sales Tax Act, 1956 1998-1999 Sales Tax Appellate Tribunal, Agra,

Uttar Pradesh

Delhi Sales Tax Act, 1975 2000-2001 to 2003-2004 Joint Commissioner (Appeal), Delhi

Gujarat Sales Tax Act, 1969 1998-1999 to 1999-2000 Sales Tax Appellate Tribunal, Ahmedabad, Gujarat.

Haryana Local Area Development Tax Act, 2000 2003-2004 Supreme Court, New Delhi

Kerala General Sales Tax Act, 1963 1998-1999 & 1999-2000 Deputy Commissioner, Sales Tax (Appeals), Kochi. Kerala

Maharastra VAT Act, 2002 2005-2006 & 2006-2007 Joint Commissioner Appeal, Nasik, Maharastra

Madhya Pradesh Entry Tax Act, 1976 2003-2004 Addl. Commissioner (Appeals)

Gwalior, Madhya Pradesh

Madhya Pradesh Commercial 2003-2004 Deputy Commissioner (Appeals),

Tax Act Commercial Tax, Madhya Pradesh

Haryana Value Added Tax Act, 2003 2003-2004 & 2004-2005 Sales Tax Appellate Tribunal Chandigarh, Haryana

Kerala VAT Act, 2003 2005-2006 Deputy Commissioner,

(Appeals) - Ernakulam, Kerala

Tamilnadu General Sales Tax Act, 1959 2003-2004 Deputy Commissioner,

(Appeals) - Chennai, Tamilnadu

Rajasthan Tax on the Entry of Goods into the Local Area Act, 2001 2005-2006 High Court, Jodhpur, Rajasthan

The Finance Act, 2004 and the Service Tax Rules 2005-2006 to 2006-2007 CESTAT, Delhi

The Finance Act, 2004 and the Service Tax Rules 2003-2004 to 2006-2007 CESTAT, Delhi

The Finance Act, 2004 and the Service Tax Rules 2003-2004 to 2006-2007 CESTAT, Delhi Uttar Pradesh Trade Tax Act, 1948 1999-2000 to 2000-2001 Joint Commissioner, (Appeal), and 2004-2005 Mathura, Uttar Pradesh

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution, banks and debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares,

securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by subsidiaries/ joint ventures from banks and financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report

that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 6,000 debentures of Rs. 1,000,000 each. The Company has created partial security / charge in respect of debentures issued, and for additional security, the Company had filed necessary application with relevant authorities for creation of charge.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of

reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. Batliboi & Co.

Firm Registration Number: 301003E Chartered Accountants

Per Raj Agrawal

Partner

Membership No.: 82028

Place: Gurgaon Date: May 28, 2010

 
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