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Auditor Report of Ramky Infrastructure Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of RAMKY INFRASTRUCTURE LIMITED ("the Company"), which comprise the Balance sheet as at March 31, 2015, the Statement of profit and loss, cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information for the year then ended.

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 and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 financial statements based on our audit while conducting the audit we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

We refer to:

1. Note 31 of the financial statements with regard to recognition of deferred tax assets amounting to Rs. 409.08 Crore, on unabsorbed depreciation, business losses and other timing differences incurred by the Company. Based on unexecuted orders on hand, the Management is confident that sufficient future taxable income will be available against which such deferred tax assets will be realised. However, in our opinion, in absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax assets can be realized, such recognition is not consistent with the principles enunciated under Accounting Standard 22, "Accounting for Taxes on Income" (AS 22). Had the aforesaid deferred tax assets not been recognised, loss after tax for the year ended would have been higher by Rs. 409.08 Crore.

2. Note 32 of the financial statements with regard to impact of floods on one of the Company's project in Srinagar, Jammu and Kashmir, the Concessionaire of the Project, a subsidiary Company, has made an assessment of the damage to the project materials and assets located at the site amounting to Rs. 141.51 crore and has lodged insurance claims of Rs. 141.51 crore with the insurers. The management of the Company, considering the insurance claim in this regard, is confident that no consequential material adjustment for loss of project materials and assets, will be required. In view of pending final assessment, We are unable to comment on the extent of adjustment on account of such loss.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraph 1 and possible effects of the matter described in the paragraph 2 of the Basis for Qualified Opinion paragraph above, 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, of the state of affairs of the Company as at March 31, 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to note 33 to the financial statements in connection with the existence of material uncertainties over the realisability of certain construction work in progress, trade receivables and loans and advances aggregating to Rs. 580.78 crores, which are subject matters of arbitration proceedings/negotiations with the customers and contractors due to foreclosure of contracts and other disputes. The management of the Company, keeping in view the status of negotiations and the outcome of arbitration proceedings and the basis of which steps to recover these amounts are currently in process, is confident of recovering the aforesaid dues.

Our report 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, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

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

a. We have sought and except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. Except for the effects of the matters described in the basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

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

d. Except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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. The matters described in the Basis for Qualified Opinion and under Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph and under the annexure referred to in paragraph 1 of Report on other Legal and Regulatory requirements;

h. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us,

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 27 to the financial statements;

ii. except for the effects of matters described in the basis for qualified opinion paragraph, the 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 were no amounts which were required to be transferred by the Company to the Investor Education and Protection Fund for the year ended March 31, 2015.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

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

(i) (a) The Company has maintained proper records showing particulars, including quantitative details and situation of fixed assets. Where assets have been moved between locations of the company is in the process of carrying out the necessary updation to the records.

(b) The company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. While the reconciliation of the fixed assets verified with the books are currently in progress, in the opinion of the management the discrepancies if any are not expected to be material.

(ii) (a) According to the information and explanations given to us, the management has conducted physical verification of inventory as at the year end. In our opinion, the frequency of verification of inventory needs to be increased to be adequate in relation to the size of the company and nature of its business.

(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) While the company has maintained proper records of inventory, we are of the opinion that, the procedures for updating these records needs to be further strengthened keeping in view the nature and scale of its operations. However, the management has carried out physical verification of the inventories and the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has granted unsecured loans to Company's covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans, having regard to the rollover of the loans.

(a) The receipt of principal amount and interest, wherever stipulated, is regular;

(b) There is no overdue amount of more than Rs. one lakh remaining outstanding as at the year end.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories, fixed assets and sale of services are for the Company's/buyer's specialized requirements, and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of services. During the course of audit, we noted in certain instances, that the underlying supporting documentation needs to be further strengthened with respect to certain purchases of inventories and services and sale of services. However, based on other alternative existing controls, in our opinion, the same did not result in a major weakness in internal control. The Management has taken steps to strengthen the supporting documentation subsequent to the yearend.

(v) According to the information and explanation given to us, the company has not accepted any deposit within the meaning of Section 73 to 76 of the Act, and the rules framed thereunder to the extent notified.

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

(vii) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Investor Educational and Protection Fund, Wealth Tax and other material statutory dues have been generally regularly deposited during the year by the company with the appropriate authorities. However, undisputed dues in respect of Provident Fund, Employees State Insurance, Income tax deducted at source, Works contract Tax deducted at source, Sales tax and Service Tax, have not been regularly deposited with the appropriate authorities and there have been serious delays in number of cases. As explained to us, the company did not have any dues on account of Excise Duty and custom duty. other material statutory dues that were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable, except for Income Tax deducted at source, Work Contract Tax deducted at sources by the company, sales Tax and Service Tax as set out in Appendix I. As explained to us, the company did not have any dues on account of Excise Duty.

(b) According to the information and explanation given to us, there are no dues of customs duty and Wealth Tax which have not been deposited with the appropriate authorities on account of any dispute. However, the company disputes the dues in respect of Sales tax, Service Tax and Income Tax as set out in Appendix II

(c) There were no amounts which were required to be transferred by the Company to the Investor Education and Protection Fund.

(viii) Without considering the consequential effects, if any, of the matters stated in the basis for qualified opinion paragraph of our report, in our opinion, The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our Audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, except for the dues stated in Appendix III the company has not defaulted in repayment of dues to its bankers. The company did not have any outstanding debentures or dues to any financial institutions during the year.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiaries from banks and financial institutions, the terms and conditions whereof, in our opinion, 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) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the period.

For CHATURVEDI & PARTNERS. Chartered Accountants

Firm Registration No.307068E

R N CHATURVEDI

Hyderabad Partner

May 30, 2015 Membership No. 092087


Mar 31, 2014

We have audited the accompanying financial statements of Ramky Infrastructure Limited (''the Company''), which comprise the balance sheet as at 31 March 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 (''financial statements'').

Management''s Responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

We draw attention to note 2.28 to the financial statements with regard to recognition of deferred tax asset on unabsorbed depreciation, business losses and other timing differences incurred by the Company during the year aggregating to Rs. 202.10 crores. Based on existing unexecuted orders on hand the Management is confident of the virtual certainty of sufficient future taxable income for realization of deferred tax assets as enunciated in Accounting Standard 22 "Accounting for Taxes on Income" (AS 22). However, in our opinion, the requirements of virtual certainty criteria may not be met due to the lack of convincing supporting evidence that sufficient future taxable income will be available. Had the aforesaid deferred tax asset not been recognised, loss after tax of the Company for the year ended 31 March 2014 would have been higher by Rs. 202.10 crores.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis for Qualified Opinion paragraph, 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 31 March 2014;

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

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

Emphasis of Matter

a) Without qualifying our opinion, we draw attention to note 2.31 to the

financial statements, regarding the search and seizure operations carried out by the Income Tax Authorities on the Company during the previous year. The Company has during the year received the intimations for reassessment of income from the Income Tax department for filling the revised returns for the relevant assessment years, which has been filled by the Company. The additional tax liabilities accepted amounting to Rs. 10.78 crores have been recognised in the Statement of profit and loss and disclosed as taxes relating to prior years.

b) Without qualifying our opinion, we draw attention to note 2.39 to the financial statements with regard to contracts not being pursued on account of foreclosure by the Company/ disputes with customers. As at 31 March 2014 an amount of Rs. 77.63 crores (including amount pertaining to advances, trade receivables, Contract work-in-progress and performance bank guarantees invoked by them) is receivable from these customers. The Management of the Company, keeping in view the long term nature of the contracts, terms and conditions implicit in these contracts and the ongoing discussions based on which steps to recover are currently in process, is confident of recovering the aforesaid amount as these are contractually tenable.

Report on Other Legal and Regulatory Requirements

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

Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c) the balance sheet, statement of profit and loss and cash flow statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, except for the effect of the matter described in the Basis for Qualified Opinion paragraph, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable; and

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

Annexure to the Independent Auditors'' Report

Annexure referred to in our independent report to the members of Ramky Infrastructure Limited ("the Company") for the year ended 31 March 2014.

We report that:

(i) (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of fixed assets. Where assets have been moved between location the Company is in the process of carrying out the necessary updation to the records.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. While the reconciliation of the fixed assets verified with the books are currently in progress, in the opinion of the management the discrepancies if any are not expected to be material.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The management has conducted physical verification of inventory as at the year end. In our opinion, the frequency of verification of inventory needs to be increased to be adequate in relation to the size of the Company and the nature of its business.

(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) While the Company has maintained proper records of inventory, we are of the opinion that the procedures for updating these records needs to be further strengthened keeping in view the nature and scale of its operations. However, the Management has carried out physical verification of the inventories and the discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) 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 ("the Act"). Accordingly clauses 4(iii)(a) to 4(iii)(d) of the Order are not applicable to the Company.

(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 Act, Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories, fixed assets and sale of services are for the Company''s/ buyer''s specialised requirements, and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of services. During the course of our audit, we noted in certain instances, that the underlying supporting documentation needs to be further strengthened with respect to certain purchases of inventories and services and sale of services. However, based on other alternative existing controls, in our opinion, the same did not result in a major weakness in internal control. The Management has taken steps to strengthen the supporting documentation subsequent to the yearend.

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

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh with each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for work performed in respect of civil, turnkey contracts and related contract consultancy services which are for the specialised requirements of buyer for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided to us, the same appears reasonable.

(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 to the Company.

(vii) The Company has an internal audit system commensurate with the size and nature of its business. However, the coverage of internal audit needs to be increased.

(viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government of India for the maintenance of cost records under Section 209(1)

(d) of the Act 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 records.

(ix) (a) According to the information and explanations given to us and

on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Investor Education and Protection Fund, Wealth Tax, Customs Duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. However, undisputed dues in respect of Provident Fund, Employees'' State Insurance, Income Tax deducted at source, Works Contract Tax deducted at source, Sales Tax and Service Tax, have not been regularly deposited with the appropriate authorities and there have been serious delays in number of cases. As explained to us, the Company did not have any dues on account of Excise Duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Wealth Tax, Customs Duty and other material statutory dues that were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable, except for Income Tax deducted at source, Work Contract Tax deducted at sources by the Company, Sales Tax and Service Tax as set out in Appendix I. As explained to us, the Company did not have any dues on account of Excise Duty.

(b) According to the information and explanations given to us, there are no dues of Customs Duty and Wealth Tax which have not been deposited with the appropriate authorities on account of any dispute. However, the Company disputes the dues in respect of Sales Tax, Service Tax and Income Tax as set out in Appendix II.

(x) Without considering the consequential effects, if any, of the matter(s) stated in in the Basis for Qualified Opinion paragraph of our auditors'' report, the Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the immediately preceding financial year. However, the Company has incurred cash losses in the current financial year.

(xi) In our opinion and according to the information and explanations given to us, except for the dues stated in Appendix III the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding debentures or dues to any financial institutions 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.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund /nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(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 funds amounting to Rs. 252.04 crores raised on short-term basis have been used for long-term purposes.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) During the year the Company has not raised any money by public issues.

(xxi) Based on the information and explanations provided to us, the Company has filed cases under section 138, 141 and 142 of the Negotiable Instruments Act, 1881 against three ex - employees for cheques returned by the banks on presentation for payment. These cheques were obtained by the Company towards recovery of losses on account of the alleged irregularities amounting to Rs. 20.86 crores which the Company believes were committed by the concerned employees while discharging their duties. Legal proceeding are currently on going in this regards.

Appendix I as referred to in para ix (a) of Annexure to the Independent Auditors'' Report:

Amount Name of the Statute Nature of the Dues (Rs.in crores) Income Tax Act, 1961 Income Tax deducted at source 4.92

Finance Act, 1994 Service tax 1.01

Value Added Tax Acts of Work Contract Tax deducted at 0.85 various States source

The Jammu and Kashmir Value Added Tax Act, 2005 Work Contract Tax 17.71

The Employees'' Provident Funds and Miscellaneous Provident Fund 0.14 Provisions Act, 1952

Period to which the Unpaid as on date Name of the Statute amount relates (Rs.in crores) Income Tax Act, 1961 Various months 3.11

Finance Act, 1994 Various months 1.01

Value Added Tax Acts of Various months 0.85 various States

The Jammu and Kashmir Value Added Tax Act, 2005 Various months 17.71

The Employees'' Provident Funds and Miscellaneous May 13 and July 13 0.14 Provisions Act, 1952

Appendix II as referred to in para ix (b) of Annexure to the Independent Auditors'' Report:

Amount Period to Name of the Statute Nature of (Rs.in which the the Dues crores) amount General sales tax/ relates Value added tax

Andhra Pradesh General Sales Tax Tax 0.17 2001-02 Act, 1957 (0.09)*

Andhra Pradesh General Sales Tax Tax 0.91 2002-03 Act, 1957 (0.45)*

Andhra Pradesh VAT Act, 2005 Tax 1.05 2005-07 (1.53)*

Andhra Pradesh VAT Act, 2005 Interest 0.08 2007-08

Andhra Pradesh VAT Act, 2005 Tax 6.85 2005-08

(6.85)*

Andhra Pradesh VAT Act 2005 Tax and 1.19 2007-09 penalty (0.43)*

Andhra Pradesh VAT Act, 2005 Tax and 4.32 2009-10 penalty (1.99)*

Karnataka Value Added Tax, 2003 Tax 0.88 2004-06 (0.88)*

The Punjab Value Added Tax, 2005 Tax 0.10 2006-07 (0.03)*

West Bengal Value Added Tax, 2003 Tax 0.86 2005-06

West Bengal Value Added Tax, 2003 Tax 2.51 2006-07

Madhya Pradesh Value Added Tax, Tax 0.95 2010-11 2002 (0.09)*

Service tax

Finance Act, 1994 Tax 6.13 2007-09 (0.75)*

Finance Act, 1994 Tax 0.98 2007-09

Finance Act, 1994 Tax and 44.23 2004-08 penalty (0.23)*

Finance Act, 1994 Tax 3.05 2004-05 & 2006-07

Finance Act, 1994 Tax 15.06 2004-08 (0.20)*

Finance Act, 1994 Tax 4.86 2009-12 Name of the Statute Forum where dispute is pending General sales tax/Value added tax

Andhra Pradesh General Sales Tax High Court of Andhra Pradesh Act, 1957 (0.09)*

Andhra Pradesh General Sales Tax The Deputy Commissioner, Hyderabad Act, 1957 (0.45)*

Andhra Pradesh VAT Act, 2005 Sales Tax Appellate Tribunal, Hyderabad

Andhra Pradesh VAT Act, 2005 Commercial Tax Officer, Hyderabad

Andhra Pradesh VAT Act, 2005 Commercial Tax Officer, Hyderabad

Andhra Pradesh VAT Act 2005 Sales Tax Appellate Tribunal, Hyderabad

Andhra Pradesh VAT Act, 2005 The Addl Deputy Commissioner (Appeals), Hyderabad

Karnataka Value Added Tax, 2003 Joint Commissioner (Appeals), Bangalore

The Punjab Value Added Tax, 2005 Deputy Excise and Taxation Commissioner (Appeals), Punjab

West Bengal Value Added Tax, 2003 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

West Bengal Value Added Tax, 2003 The Addl Commissioner of Commercial Taxes, Kolkata

Madhya Pradesh Value Added Tax, The Appellate Tribunal, Bhopal 2002

Service tax

Finance Act, 1994 High Court of Andhra Pradesh

Finance Act, 1994 Central Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore

Finance Act, 1994 CESTAT, Bangalore

Finance Act, 1994 CESTAT, Bangalore

Finance Act, 1994 CESTAT, Kolkata Finance Act, 1994 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad.

Amount Period to which the Name of the Statute Nature of the Dues (Rs.in amount relates crores)

Finance Act, 1994 Tax and penalty 53.22 2004-12 (4.09)*

Finance Act, 1994 Tax 0.20 2005-08 Finance Act, 1994 Tax 0.19 2010-11

Finance Act, 1994 Tax 0.04 2007-08

Finance Act, 1994 Tax 0.71 2011-12

Finance Act, 1994 Tax 2.17 2007-12

Income tax

Income Tax Act, 1961 Deductions 1.26** 2002-03 disallowed

Income Tax Act, 1961 Deductions 1.05** 2003-04 disallowed

Income Tax Act, 1961 Deductions 1.61** 2004-05 disallowed

Income Tax Act, 1961 Deductions 5.08** 2005-06 disallowed

Income Tax Act, 1961 Deductions 4.44** 2006-07 disallowed

Income Tax Act, 1961 Deductions 6.48** 2007-08 disallowed

Income Tax Act, 1961 Deductions 12.43** 2008-09 disallowed

Name of the Statute Forum where dispute is pending Finance Act, 1994 CCCE&S of various States

Finance Act, 1994 Asst. Commissioner (Audit), Service Tax Cell, Visakhapatnam

Finance Act, 1994 Addl CCCE&S, Hyderabad

Finance Act, 1994 CCCE&S (Appeals), Chennai Finance Act, 1994 Addl CCCE&S, Chennai

Finance Act, 1994 CCCE&S, Hyderabad

Income tax

Income Tax Act, 1961 Assessing Officer, Hyderabad Income Tax Act, 1961 Assessing Officer, Hyderabad Income Tax Act, 1961 Assessing Officer, Hyderabad

Income Tax Act, 1961 Assessing Officer, Hyderabad

Income Tax Act, 1961 Assessing Officer, Hyderabad Income Tax Act, 1961 Assessing Officer, Hyderabad

Income Tax Act, 1961 Assessing Officer, Hyderabad * The amounts in parenthesis represent the payment made under protest.

** These amounts have been deducted against refund receivable.

Appendix III as referred to in para xi of Annexure to the Independent Auditors'' Report:

A. Details of delays in repayment of dues to banks, which were outstanding as at 31 March 2014:

Amount due Name of the bank Nature of dues (Rs.in Due date crores)

ICICI Bank Limited Loan Repayment 6.25 8 February 2014

ICICI Bank Limited Interest 1.53 1 February 2014

ICICI Bank Limited Interest 1.31 1 March 2014

Axis Bank Limited Letter of Credit 19.06 6 February 2014

Axis Bank Limited Letter of Credit 13.00 February 2014

Punjab National Bank Letter of Credit 1.60 February 2014

ICICI Bank Limited Buyers Credit 10.87 30 January 2014

Delays Name of the bank Paid by (in days)

ICICI Bank Limited 2 April 2014 53

ICICI Bank Limited 2 April 2014 60

ICICI Bank Limited 19 April 2014 49

Axis Bank Limited 30 May 2014 113

Axis Bank Limited - Not yet paid

Punjab National Bank - Not yet paid

ICICI Bank Limited 3 April 2014 63

B.Details of delays in repayment of principal and interest against the borrowing facilities availed from banks and fallen due during the year ended 31 March 2014, but repaid before 31 March 2014 are as follows:

Name of the bank Principal Delay range Interest Delay range (Rs.in (in days) (Rs.in (in days) crores) crores) State Bank of India - - 1.53 1 - 7

ING Vysya Bank - - 0.79 25 - 29

ICICI Bank Limited 18.75 20 - 77 16.78 2 - 84

Axis Bank Limited 0.70 11 - 189 0.24 11 - 189

HDFC Bank Limited 2.82 11 - 155 0.44 11 - 155

ICICI Bank Limited 2.68 9 - 131 0.54 9 - 131



for B S R & Co. LLP for Visweswara Rao & Associates Chartered Accountants Chartered Accountants Firm Registration No.: 101248W Firm Registration No.: 005774S

Supreet Sachdev Mahidhar. S. G Partner Partner Membership No.: 205385 Membership No.: 216463

Hyderabad 20 June 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Ramky Infrastructure Limited (''the Company''), which comprise the balance sheet as at 31 March 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 31 March 2013;

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to note 2.31 to the financial statements regarding the search and seizure operations carried out by the Income Tax Authorities on the Company. Pending completion of the proceedings, the final outcome of the search and seizure operation and the consequent tax liability, if any, is currently not ascertainable.

Report on Other Legal and Regulatory Requirements

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

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

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

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

c) the balance sheet, statement of profit and loss, and cash flow statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the balance sheet, statement of profit and loss, and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable; and

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

Annexure to the Independent Auditors'' Report

Annexure referred to in our independent report to the members of Ramky Infrastructure Limited ("the Company") for the year ended 31 March 2013. 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 programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory of materials has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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) While the Company has maintained proper records of inventory, we are of the opinion that the same needs to be further strengthened keeping in view the scale of the operations. However, the Management has carried out physical verification of the inventories and the discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) 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 ("the Act"). Accordingly clauses 4(iii)(a) to 4(iii)(d) of the Order are not applicable to the Company.

(e) According to the information and explanations given to us, the Company had taken unsecured loan from a company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs. 30 crores and the year-end balance of such loan was Rs. Nil. The Company has not taken any loans from firms or other parties covered in the registers maintained under Section 301 of the Act.

(f) In our opinion, the rate of interest and other terms and conditions on which the loan had been taken from a company listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(g) The loan including interest taken from a company listed in the register maintained under Section 301 of the Act has been repaid during the year. Accordingly, clause 4(iii)(g) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of services. The business of the Company does not involve sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(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 Act have been entered in the register required to be maintained under that Section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh with each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for work performed in respect of civil, turnkey contracts and related contract consultancy services which are for the specialised requirements of buyer for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided to us, the same appears reasonable.

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

(vii) The Company has an internal audit system commensurate with the size and nature of its business. However, the same needs further strengthening.

(viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government of India for the maintenance of cost records under Section 209(1)(d) of the Act 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 records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there have been slight delays in few cases. However, undisputed dues in respect of Income Tax deducted at source and Works Contract Tax deducted at source have not been regularly deposited with the appropriate authorities and there have been serious delays in a large number of cases. As explained to us, the Company did not have any dues on account of Excise Duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other material statutory dues that were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable. As explained to us, the Company did not have any dues on account of Excise Duty.

(b) According to the information and explanations given to us, there are no dues of Customs Duty and Wealth Tax which have not been deposited with the appropriate authorities on account of any dispute. However, the Company disputes the dues in respect of Sales Tax, Service Tax and Income Tax as set out in Appendix I.

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

(xi) In our opinion and according to the information and explanations given to us, except for the dues stated in

Appendix II the Company has not defaulted in repayment of dues to its bankers or to any financial institutions. The Company did not have any outstanding debentures 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.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) During the year the Company has not raised any money by public issue. We have verified the end use of funds raised by public issue during the earlier year as disclosed in note 2.37 to the financial statements.

(xxi) 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 B S R & Co. for Visweswara Rao & Associates

Chartered Accountants Chartered Accountants

Firm''s Registration No.: 101248W Firm''s Registration No.: 005774S

Zubin Shekary S V R Visweswara Rao

Partner Partner

Membership No.: 048814 Membership No.: 029088

Hyderabad 27 May 2013


Mar 31, 2012

1. We have audited the attached balance sheet of Ramky Infrastructure Limited ("the Company") as at 31 March 2012, the statement of profit and loss and the 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.

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 ('the Order'), 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. 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 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;

(d) subject to our comments in paragraph (f) below, in our opinion, the balance sheet, the 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, to the extent applicable;

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

(f) we draw attention to note 2.35 to the financial statements, wherein deductions claimed by the Company under Section 80-IA (4)of Income Tax Act, 1961 in its returns of income relating to assessment years 2003-04 to 2011-12 amounting to Rs 66.56 crores have now been provided for by directly debiting the surplus in statement of profit and loss account balance under "Reserves and Surplus" rather than debiting these amounts to the statement of profit and loss for the year ended 31 March

2012 as required by Accounting Standard-5 "Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies". Had this provision been charged to the statement of profit and loss for the current year, the profit after tax for the year would reflect as Rs 77.12 crores as compared to the reported profit after tax ofRs 143.68 crores. Further, the basic and diluted EPS for the current year would be Rs 13.48 per share compared to the reported EPS ofRs 25.12 per share; and

(g) except for effects of the matter described in paragraphs

(d) and (f) 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 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 31 March 2012;

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

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

Annexure referred to in our report to the members of Ramky Infrastructure Limited ("the Company") for the year ended 31 March 2012. 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 programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory has been physically verified by the

Management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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 inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly clauses 4(iii)(a) to 4(iii)(g)of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of services. The business of the Company does not involve sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(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) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakh with each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for work performed in respect of civil, turnkey contracts and related contract consultancy services which are for the specialized requirements of buyer for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided to us, the same appears reasonable.

(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 prescribed by the Central Government of India for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 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 records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities, though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Excise duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty and other material statutory dues that were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Customs duty and Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. However, the Company disputes the dues in respect of Sales tax, Service tax and Income tax as set out in Appendix 1.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in 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 its bankers or any financial institutions during the year. The Company did not have any outstanding debentures or dues to any financial institutions 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.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) During the year the Company has not raised any money by public issue. We have verified the end use of funds raised by public issue during the previous year as disclosed in note 2.36 to the financial statements.

(xxi) 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.

Nature of Nature of Amount Period to which Forum where the statute the dues (Rs.) the amount rela dispute is tes pending



General sales tax/Value added tax

Andhra Pradesh General Tax 1,740,746 2001-02 Appeal filed with Sales Tax Act, 1957 (906,633)* High Court of Andhra Pradesh.

Andhra Pradesh General Tax 9,065,397 2002-03 Sales Tax Appellate Sales Tax Act, 1957 (4,532,699)* Tribunal, Hyderabad.

Andhra Pradesh Value Tax 7,064,549 2005-09 Sales Tax Appellate Added Tax Act, 2005 (23,356,058)* Tribunal, Hyderabad.

Andhra Pradesh Value Tax 27,199,309 2005-09 Commercial Tax Officer, Hyderabad. Added Tax Act, 2005

Andhra Pradesh Value Interest and 21,447,125 2005-09 Commercial Tax Officer, Hyderabad.

Added Tax Act, 2005 penalty (1,945,483)*

Andhra Pradesh Value Tax and interest 87,546,525 2005-08 Commercial Tax Officer, Hyderabad.

Added Tax Act, 2005 (85,080,660)*

Andhra Pradesh Value Tax 44,085,191 2007-10 Appellate Deputy Commissioner

Added Tax Act, 2005 (8,666,360)*

Andhra Pradesh Value Penalty 11,021,298 2007-10 Commercial Tax Officer, Hyderabad. Added Tax Act, 2005

Karnataka Value Added Tax 8,759,830 2004-06 Sales Tax Appellate Tribunal,

Tax Act, 2003 (8,759,830)* Bangalore

The Punjab Value Tax 2,198,812 2005-07 Deputy Excise and Taxation

Added Tax Act, 2005 Commissioner (Appeals), Punjab

West Bengal Value Tax 8,255,424 2005-06 Commercial Tax Officer, Kolkata. Added Tax Act, 2003

West Bengal Value Tax 25,078,273 2006-07 West Bengal Sales Tax Tribunal, Added Tax Act, 2003 Kolkata

Service Tax

Finance Act, 1994 Tax 30,502,660 2004-07 Central Excise & Service Tax

Tribunal (CESTAT), Bangalore

Finance Act, 1994 Tax 74,341,004 2004-07 Commissioner of Customs, Central (35,570,924)* Excise & Service Tax (CCCE&S), Hyderabad.

Finance Act, 1994 Tax 7,982,189 2004-07 CESTAT, Kolkata

Finance Act, 1994 Tax 256,289 2004-07 CCCE&S, Ahmadabad.

Finance Act, 1994 Tax 71,133,154 2007-09 CESTAT, Bangalore

Finance Act, 1994 Tax 37,821,891 2009-11 CCCE&S, Hyderabad.

Finance Act, 1994 Tax and pen alty 442,346,138 2004-08 CCCE&S,Bangalore. (26,756,523)*

Finance Act, 1994 Tax 1,987,370 2005-08 Asst. Commis sioner (Audit), (110,588)* Service Tax Cell, Visakha patnam

Finance Act, 1994 Tax and Penalty 142,606,046 2007-09 CESTAT, Kolkata

Finance Act, 1994 Tax 377,246 2007-08 CCCE&S (Appeals), Chennai.

Nature of Nature of Amount (Rs.) Period to Forum where the statute the dues the amount dispute is relates pending Service Tax (Contd.)

Finance Act, 1994 Tax 17,896,099 2005-07 CCCE&S, Kolkata. (7,913,167)*

Finance Act, 1994 Tax 4,323,907 2007-10 Addle CCCE&S, Hyderabad.

Finance Act, 1994 Tax 8,836,619 2007-10 CCCE&S, Hyderabad.

Finance Act, 1994 Tax 28,070,720 2005-10 CCCE&S,Hyderabad.

Finance Act, 1994 Tax 13,881,404 2005-10 CCCE&S,Hyderabad.

Finance Act, 1994 Tax 10,446,547 2007-10 CCCE&S,Bangalore (118,090)*

Finance Act, 1994 Tax 1,850,657 2010-11 Addnl CCCE&S, Hyderabad.

Finance Act, 1994 Tax 5,621,126 2011-12 Deputy Commis sioner of Customs, (5,621,126)* Mumbai.

Finance Act, 1994 Tax 44,789,432 2007-11 CCCE&S, Chennai. (20,916,640)*

Income tax

Income Tax Act, 1961 Deductions 12,619,040** 2002-03 Income Tax Appellate Tribunal

disallowed

Income Tax Act, 1961 Deductions 10,537,804** 2003-04 Income Tax Appellate Tribunal disallowed

Income Tax Act, 1961 Deductions 16,064,740** 2004-05 Income Tax Appellate Tribunal disallowed

Income Tax Act, 1961 Deductions 50,777,088** 2005-06 Income Tax Appellate Tribunal disallowed

Income Tax Act, 1961 Deductions 44,426,473** 2006-07 Income Tax Appellate Tribunal disallowed

Income Tax Act, 1961 Deductions 64,780,599** 2007-08 Income Tax Appellate Tribunal disallowed

Income Tax Act, 1961 Deductions 124,270,337** 2008-09 Commissioner of Income Tax disallowed (Appeals)

* The amounts in parenthesis represent the payment made under protest.

** These amounts have been deducted against refund receivable.

for B S R & Co. for Visweswara Rao & Associates

Chartered Accountants Chartered Accountants

Firm's Registration No: 101248W Firm's Registration No: 005774S

Zubin Shekary S V R Visweswara Rao

Partner Partner

Membership No.: 048814 Membership No.: 029088

Hyderabad

29 May 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Ramky Infrastructure Limited (the Company) as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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.

As required by the Companies (Auditors Report) Order, 2003, as amended, issued by the Ministry of Corporate Affairs 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.

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 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. 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;

e. on the basis of written representations received from the Directors, as at March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at 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 on the said date; and

f. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

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

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

Annexure to the Auditors report

Annexure referred to in our report to the members of Ramky Infrastructure Limited (the Company) 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. The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. No material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

ii a. The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the 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 inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. a. According to the information and explanations given to us, the Company has granted loan to one company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was `6,05,85,343 and the year-end balance of such loans was `6,05,85,343. The Company has not given loans to firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. In our opinion, the terms and conditions on which the loan has been granted to the company listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c. Loans granted to company listed in the register maintained under Section 301 of the Companies Act, 1956 are receivable on demand and do not have a stipulated repayment schedule. Accordingly, clause 4(iii)(c) of the Order is not applicable.

d. There is no overdue amount of more than Rupees one lakh in respect of loans granted to the company listed in the register maintained under Section 301 of the Companies Act, 1956 as the Company has not exercised the repayment option.

e. The Company has not taken loans from Companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of services. The business of the Company does not involve sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

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. In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of `5 lakh with each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for work performed in respect of civil, turnkey contracts and related contract consultancy services which are for the specialised requirements of buyer for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided to us, the same appears reasonable.

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. The Central Government of India has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the services rendered by the Company. The business of the Company does not involve sale of goods.

ix. a. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities, though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and excise duty.

Further, there were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date from which the aforesaid Section comes into force has not yet been notified by the Central Government of India.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of provident fund, employees state insurance, income- tax, wealth tax, service tax, works contract tax, customs duty and other material statutory dues that were in arrears as at March 31, 2011 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, there are no dues of customs duty and wealth tax which have not been deposited with the appropriate authorities on account of any dispute. However, the Company disputes the dues in respect of sales tax, works contract tax, service tax and income tax as set out in Appendix 1.

x. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in 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 its bankers or any financial institutions during the year. The Company did not have any outstanding debentures or dues to any financial institutions 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.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/mutual benefit fund/society.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

xvi. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

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

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

xix. The Company did not have any outstanding debentures during the year.

xx. We have verified the end use of funds raised by public issue during the year as disclosed in Note 2 of Schedule 20 to the financial statements.

xxi. 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.

Name of the Statute Nature of the Amount (`) dues

General sales tax/Value added tax

Andhra Pradesh General Tax 17,40,746

Sales Tax Act, 1957 (9,06,633)*

Andhra Pradesh General Tax 90,65,397 Sales Tax Act, 1957 (45,32,699)*

Andhra Pradesh VAT Act, 2005 Tax 55,53,920 (41,65,440)*

Andhra Pradesh VAT Act, 2005 Tax 1,48,39,623 (1,11,29,717)*

Andhra Pradesh VAT Act, 2005 Tax 45,02,965 (33,77,226)*

Andhra Pradesh VAT Act, 2005 Interest and 1,36,65,194 penalty

Andhra Pradesh VAT Act, 2005 Tax, interest and 1,71,49,281 penalty (66,29,158)*

Andhra Pradesh VAT Act, 2005 Tax and penalty 1,18,94,979 (43,44,845)*

Andhra Pradesh VAT Act, 2005 Tax and interest 8,75,46,525

(8,50,80,660)*

Karnataka Value Added Tax, 2003 Tax 87,59,830 (87,59,830)*

The Punjab Value Added Tax, 2005 Tax 10,20,061 (2,55,015)*

West Bengal Value Added Tax, 2003 Tax 82,55,424

West Bengal Value Added Tax, 2003 Tax 2,50,78,273

Service Tax

Finance Act, 1994 Tax and penalty 3,05,02,660

Finance Act, 1994 Tax 7,43,41,004 (3,55,70,924)*

Finance Act, 1994 Tax 2,56,289

Finance Act, 1994 Tax 6,12,87,432

Finance Act, 1994 Tax 2,29,97,813

Finance Act, 1994 Tax 98,45,722

Finance Act, 1994 Tax 19,08,709

Finance Act, 1994 Tax and penalty 46,89,53,094

(2,67,56,523)*

Finance Act, 1994 Tax 19,87,370 (1,10,588)*



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

General sales tax/Value added tax

Andhra Pradesh General Sales Tax Act, 1957 2001-02 Appeal filed with High Court of Andhra Pradesh

Andhra Pradesh General Sales Tax Act, 1957 2002-03 Sales Tax Appellate Tribunal, Hyderabad

Andhra Pradesh VAT Act, 2005 2005-06 Appellate Deputy Commissioner (ADC), Hyderabad

Andhra Pradesh VAT Act, 2005 2006-07 ADC, Hyderabad

Andhra Pradesh VAT Act, 2005 2007-08 ADC, Hyderabad

Andhra Pradesh VAT Act, 2005 2005-08 Commercial Tax Officer, Hyderabad

Andhra Pradesh VAT Act, 2005 2008-09 Commercial Tax Officer, Hyderabad

Andhra Pradesh VAT Act, 2005 2007-08 Commercial Tax Officer, Hyderabad

Andhra Pradesh VAT Act, 2005 2005-08 Commercial Tax Officer, Hyderabad

Karnataka Value Added Tax, 2003 2004-06 Commercial Tax Officer, Bangalore

The Punjab Value Added Tax, 2005 2006-07 Dy. Excise & Taxation Commissioner (Appeals), Punjab

West Bengal Value Added Tax, 2003 2005-06 Commercial Tax Department, Kolkata

West Bengal Value Added Tax, 2003 2006-07 West Bengal Tribunal, Kolkata

Service Tax 2004-07 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Bangalore

Finance Act, 1994 2004-07 CCCE&S, Hyderabad

Finance Act, 1994 2004-07 CCCE&S, Ahmedabad

Finance Act, 1994 2007-09 Central Excise & Service Tax Tribunal (CESTAT), Bangalore

Finance Act, 1994 2009-10 CCCE&S, Hyderabad

Finance Act, 1994 2007-09 CESTAT, Bangalore

Finance Act, 1994 2009-10 CCCE&S, Hyderabad

Finance Act, 1994 2004-08 CCCE&S, Visakhapatnam

Finance Act, 1994 2005-08 Asst. Commissioner (Audit), Service Tax Cell, Visakhapatnam Service Tax (Contd.)

Finance Act, 1994 Tax 14,26,06,046

Finance Act, 1994 Tax 79,82,189

Finance Act, 1994 Tax 3,77,246

Finance Act, 1994 Tax 1,78,96,099

(79,13,167 )*

Finance Act, 1994 Tax 43,23,907

Finance Act, 1994 Tax 88,36,619

Finance Act, 1994 Tax 2,80,70,720

Finance Act, 1994 Tax 1,38,81,404

Income Tax

Income Tax Act, 1961 Deductions 1,26,19,038**

disallowed

Income Tax Act, 1961 Deductions 1,05,37,804** disallowed

Income Tax Act, 1961 Deductions 1,60,64,740** disallowed

Income Tax Act, 1961 Deductions 5,07,77,088** disallowed

Income Tax Act, 1961 Deductions 4,44,26,473** disallowed

Income Tax Act, 1961 Deductions 6,47,80,599** disallowed

Finance Act, 1994 2007-09 CCCE&S, Kolkata

Finance Act, 1994 2004-07 CCCE&S, Kolkata

Finance Act, 1994 2007-08 CCCE&S (Appeals), Chennai

Finance Act, 1994 2005-07 CCCE&S, Bhubaneswar

Finance Act, 1994 2007-10 Addl. CCCE&S, Hyderabad

Finance Act, 1994 2007-09 CCCE&S, Hyderabad

Finance Act, 1994 2005-10 CCCE&S, Hyderabad

Finance Act, 1994 2005-09 CCCE&S, Hyderabad

Income Tax Income Tax Act, 1961 2002-03 Income-tax Appellate Tribunal

Income Tax Act, 1961 2003-04 Income-tax Appellate Tribunal

Income Tax Act, 1961 2004-05 Income-tax Appellate Tribunal

Income Tax Act, 1961 2005-06 Income-tax Appellate Tribunal

Income Tax Act, 1961 2006-07 The Commissioner of Income-tax (Appeals)

Income Tax Act, 1961 2007-08 The Commissioner of Income-tax (Appeals)

* The amounts in parenthesis represent the payment made under protest. ** These amounts have been deducted against refund receivable.



For B S R & Co For Visweswara Rao & Associates

Chartered Accountants Chartered Accountants

Firm Registration No: 101248W Firm Registration No: 005774S

Zubin Shekary S. V. R. Visweswara Rao

Partner Partner

Membership No.: 48814 Membership No.: 29088

Hyderabad May 26, 2010

 
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