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Auditor Report of SPML Infra Ltd.

Mar 31, 2016

Independent Auditor''s Report

To the Members of SPML Infra Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of SPML Infra Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s 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 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 controls 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. 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.

7. 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

8. As explained in more detail in note 39 to the standalone financial statements, the Company''s trade receivables, fixed assets and inventories as at 31 March 2016 comprise of Rs. 4,829.10 lakhs (31 March 2015: Rs. 4,829.10 lakhs), Rs. 695.49 lakhs (31 March 2015: Rs. 1,084.28 lakhs) and Rs. 500.47 lakhs (31 March 2015: Rs. 557.74 lakhs), respectively, related to contracts which have been foreclosed by customers in earlier years and these are presently under arbitration / litigation proceedings. In absence of sufficient appropriate evidence, we are unable to comment upon the recoverability of the aforesaid trade receivables and carrying value and existence of the aforesaid fixed assets and inventories and the consequential impact, if any, that may arise on settlement of the aforesaid matters.

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

10. We draw attention to note 42 to the standalone financial statements, which indicates the uncertainty relating to the recovery of trade and other receivables amounting to Rs. 15,997.75 lakhs as at 31 March 2016 (31 March 2015: Rs. 19,823.46 lakhs) and recognition of interest income amounting to Rs. 769.68 lakhs during the year ended 31 March 2016 (Rs. 4,280.06 lakhs up to the year ended 31 March 2015). These amounts relates to the litigations pending with various courts with respect to arbitration awards pronounced in favor of the Company and recognized by the Company in the current year and earlier years, wherein the customers have gone into appeals. Pending the final outcome of these litigations, which is presently unascertainable, no adjustment has been recorded in the annual financial statements. 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, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:

a. we have sought and except for the possible effect of the matter 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 purpose of our audit;

b. except for the possible effects of the matter 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 it appears from our examination of those books;

c. the standalone financial statements dealt with by this report are in agreement with the books of account;

d. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph,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 (as amended);

e. the matter described in paragraph under the Emphasis of Matters and Basis for Qualified Opinion paragraph, 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 31 March 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;

g. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

h. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 27 May 2016 as per Annexure B expressed an unqualified opinion.

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

i. as detailed in note 24(a) to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

ii. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the Company, as detailed in note 34(b) to the standalone financial statements, 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;

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

Annexure A to the Independent Auditor''s Report of even date to the members of SPML Infra Limited, on the financial statements for the year ended 31 March 2016

Annexure A

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, and to the best of our knowledge and belief, 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. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification (except to the extent stated in note 39 of the standalone financial statements).

c) The title deeds of all the immovable properties (which are included under the head ''fixed assets'') are held in the name of the Company.

(ii) In our opinion, the management has conducted a physical verification of inventory at reasonable intervals, except for as stated in note 39, which have not been verified during the year. No material discrepancies between physical inventory and book records were noticed on physical verification of inventory so physically verified.

(iii) The Company has granted unsecured loans to companies and other parties covered in the register maintained under Section 189 of the Act; and with respect to the same:

a) In our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company''s interest.

b) The schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;

c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.

(iv) In our opinion, company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.

(v) In our opinion, 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. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-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 to the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute

Nature of the dues

Amount

Period to which the amount relates

Due date

Date of payment

Employees Provident Fund,1952 and Employees State Insurance, 1948

PF and ESI (including Interest on delayed payment of PF and ESI)

94.45

April 2012 to

August 2015

Immediate

Rs. 56.53 lakhs

paid on 2-Apr-16

Income Tax Act, 1961

TDS (including interest on delayed payment of TDS )

73.96

April 2014 to

August 2015

7th day of the subsequent month

Rs. 11.22 lakhs

paid on 13-Apr-16

Finance Act,1994

Service Tax

4.96

April 2014 to August 2015

6th day of the subsequent month

Not yet paid

The Haryana Value Added

Tax Act, 2003

Work Contract Tax

6.37

July 2015

15th day of the subsequent month

27-Apr-16

Gujarat Value Added Tax

Act, 2003

Work Contract Tax

9.23

June 2015 to August 2015

15th day of the subsequent month

01-Apr-16 and 03-Jun-16

The Bihar Value Added Tax Act, 2005

Work Contract Tax

49.29

January 2015 to June 2015

21st day of the subsequent month

Rs. 21.44 lakhs

paid on 06-Apr-16

The Assam Professions, Trades, Callings and Employments Taxation Act, 1947

Professional Tax

0.02

July to August 2015

21st day of the subsequent month

Not yet paid

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

Statement of disputed dues (Amount in Lakhs)

Name of the statute

Nature of the dues

Amount

Amount paid under Protest

Period to which the amount relates

Forum where dispute is pending

The Income Tax Act, 1961

Income Tax

1,936.33

-

AY 2011-12

Commissioner of Income Tax, Kolkata

Karnatka Value Added

Tax, 2003

Disallowance of Input Tax Credit and TDS

34.2

-

FY 2012-13

JCCT Appeals, Karnatka

Karnatka Value Added Tax, 2003

Karnatka VAT-Excess C/F ITC in the month of July-09 & Duplicate TDS Certificates not considered in Assessment

51.43

-

FY 2009-10

DCCT-Audit

5.1-Koramangala

Karnatka Value Added Tax, 2003

Karnataka CST Case 200910 E1 sales not covered by E1 Forms

2.62

-

FY 2009-10

ACCT Audit 5.1-Koramangala

Karnatka Value Added Tax, 2003

Karnataka VAT -Disallowing all ITC labour & TDS

1,759.00

-

FY 2010-11

DCCT-Audit

5.8-Koramangala

West Bengal CST Act, 1956

Non production of C and E forms

105.1

-

FY 2005-06

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

Central Sales Tax Act, 1956

Claim exemption u/s 6(2) of Central Sales Tax Act, 1956

991.62

-

FY 2006-07

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

Central Sales Tax Act, 1956

Claim exemption u/s 6(2) of Central Sales Tax Act, 1956

293.97

-

FY 2007-08

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

West Bengal VAT Act, 2003

Non production of C and E forms

105.34

-

FY 2007-08

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

Central Sales Tax Act, 1956

Claim exemption u/s 6(2) of Central Sales Tax Act, 1956

404.98

-

FY 2008-09

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

Central Sales Tax Act, 1956

Non production of C and E forms

285.55

-

FY 2009-10

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

West Bengal VAT Act, 2003

Denial of deduction u/s 18(2) of the WB VAT Act

335.63

-

FY 2009-10

West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata

West Bengal VAT Act, 2003

Exemption under RGGVY scheme

137.72

-

FY 2006-07

West Bengal Commercial Taxes Appellate & Revision Board, Kolkata

West Bengal VAT Act, 2003

Exemption under RGGVY scheme and denial of deduction u/s 18(2) of the WB VAT for want of adequate documents

95.74

-

FY 2008-09

West Bengal Commercial Taxes Appellate & Revision Board, Kolkata

West Bengal VAT Act, 2003

WCT sales taxed improperly, input credit not allowed and interest charged

20.04

-

FY 2010-11

West Bengal Commercial Taxes Appellate & Revision Board, Kolkata

West Bengal VAT Act, 2003

Denial of deduction u/s 18(2) of the WB VAT Act

31.93

-

FY 2011-12

West Bengal Commercial Taxes Appellate & Revision Board, Kolkata

West Bengal VAT Act, 2003

Disallowance of input tax credit , interest charged and demand of purchase and output tax

75.27

-

FY 2012-13

Senior Joint Commissioner of Sales Tax, Kolkata (South) Circle

Bihar Vat Act, 2005

Disallowance of labour component

43.13

-

FY 2007-08

JCCT Appeals, Patna

Bihar Vat Act, 2005

Denied the exemption u/s 6(2) of the CST Act, on the grounds of pre-determined sales and non-production of statutory forms.

234.27

-

FY 2010-11

JCCT Appeals, Patna

Central Sales Tax Act, 1956

Disallowance of Assessed E-1 Sales out of West Bengal State

333.73

-

FY 2005-06 to 2007-08

Appellate Tribunal, Com. Tax, Range IInd, Agra Remanded back to CTO Agra.

UP VAT Act, 2008

Tax Liability on Exempted project RGGVY sales

44.13

8.82

FY 2007-08

Additional Commissioner, Agra

Jharkhand VAT Act, 2005

Tax Demand on receipts and suppression of turnover

195.30

-

FY 2004-05 to 2010-11

JCCT (Appeals) Jamshedpur

Delhi VAT Act, 2004

Miscellaneous Demand

26.00

-

FY 2012-2013

Commissioner DVAT, Delhi

Finance Act, 1994

Service Tax on advance received

23.13

-

FY 2005-06 to 2006-07

Commissioner Service Tax, Kolkata

Rajasthan VAT Act, 2003

Tax liability on interstate sales

9.37

-

FY 2009-2010

Deputy Commissioner, Appeals-II Jaipur

Rajasthan VAT Act, 2003

Tax liability on interstate sales

110.64

-

FY 2011-2012

Deputy Commissioner, Appeals-III Jaipur

(viii) There are no loans or borrowingspayable to government and no dues payable to debenture-holders. The Company has defaulted in repayment of loans/borrowings to the following banks and financial institutions:

(Amount in Lakhs)

Name of lender

Amount

Upto 90 days

More than 90 days

Banks

ICICI bank

188.70

-

Yes bank

367.28

-

Financial institutions

SREI Equipment Finance Limited

21.13

7.04

IFCI

96.55

-

Further, during the year, the Company delayed in repayment of dues to banks and financial institutions as detailed below:

(Amount in Lakhs)

Name of lender

Amount

Upto 90 days

More than 90 days

Banks

ICICI bank

1,585.53

-

Yes bank

1,528.99

-

Financial institutions

SREI Equipment Finance Limited

49.29

7.04

IFCI

441.70

-

Daimler Financial Services India Private Limited

3.98

-

BMW Financial Services Ltd

3.95

1.32

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.

(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

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

Annexure B of the Independent Auditor''s Report of even date to the members of SPML Infra Limited, on the standalone financial statements for the year ended 31 March 2016

Annexure B

Independent Auditor''s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statements of SPML Infra Limited ("the Company") as of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting (IFCOFR) of the company of as of that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s IFCOFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCOFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP For Sunil Kumar Gupta & Co.

(Formerly Walker, Chandiok & Co) Chartered Accountants

Chartered Accountants

Firm''s Registration No.: 001076N/N500013 Firm''s Registration No.: 003645N

per Neeraj Sharma per S.K. Gupta

Partner Partner

Membership No.: 502103 Membership No.: 082486

Place: Gurgaon Place: Gurgaon

Date: 27 May 2016 Date: 27 May 2016


Mar 31, 2015

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

2. Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the maters 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 fows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

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 maters 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 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 controls 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.

7. Basis for Qualified Opinion

As stated in Note 39 and 40 to the standalone financial statement, the company's trade receivables, fixed assets and inventories as at March 31, 2015 comprise of Rs. 4,829.10 lakhs (March 31, 2014: Rs. 1904.78 lakhs), Rs. 1,084.28 (March 31, 2014: Rs. 1,608.00 lakhs) and Rs. 557.74 lakhs, respectively, related to contracts which have been foreclosed by customers in earlier year and the current year and these are presently under arbitration/litigation proceedings. During the current year, the Company has recorded income aggregating to Rs. 834.69 Lakhs in respect of one of the foreclosed contract which is under arbitration, which in our opinion is not consistent with the principles of revenue recognition. In absence of sufficient appropriate evidence, we are unable to comment upon the recoverability of the aforesaid trade receivables and the existence and carrying value of the aforesaid inventories and fixed assets and the consequential impact, if any, on the financial statements that may arise on settlement of the aforesaid maters. The Auditor's report on the financial statements for the year ended March 31, 2014 was also qualified in respect of the mater described in Note 39 referred to above.

8. Qualified Opinion

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

9. Emphasis of Mater

We draw attention to note 42 to the standalone financial statements, which indicates the uncertainty relating to the outcome of litigations pending with courts/appellate tribunals with respect to arbitration awards amounting to Rs. 15,543.40 lakhs (including interest of Rs. 4,280.06 lakhs) pronounced in favor of the company and recognized in the books of account, however, the customers have preferred appeals on such awards. Pending the final outcome of these litigations, which is presently unascertainable, no adjustment has been recorded in the statement. Our audit report is not qualified in respect of this mater.

10. Other Maters

We did not audit the financial statements of two unincorporated integrated joint ventures, included in the standalone financial statements, whose financial statements reflect Company's share in profit of Rs. 17.53 lakhs for the year ended March 31, 2015. These financial statements have been audited by other auditors whose reports have been furnished to us, by the management, and our opinion on the standalone financial statements of the Company for the year then ended to the extent relate to the financial statements not audited by us as stated in this paragraph is based on solely on the audit reports of the other auditors. Our opinion is not modified in respect of this mater.

We did not audit the financial statements of an unincorporated integrated joint venture, included in the standalone financial statements, whose financial statements reflect Company's share in profit of Rs. 8.35 lakhs for the year ended March 31, 2015. These financial statements have been certified by the Company's management, and our opinion on the standalone financial statements of the Company for the year then ended to the extent they relate to the financial statements as stated in this paragraph is based solely on, on such management certified financial statements. Our opinion is not modified in respect of this mater.

The standalone financial statements of the company for the year ended March 31, 2014 were audited jointly by another auditor and Sunil Kumar Gupta & Co who had expressed a qualified opinion on those financial statements vide their report dated May 29, 2014. Sunil Kumar Gupta & Co., continues to be Joint auditor for the current year ended March 31, 2015.

Report on Other Legal and Regulatory Requirements

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 maters specified in paragraphs 3 and 4 of the Order.

As required by Section 143(3) of the Act, we report that:

a. we have sought and (except for the possible effect of the mater 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 purpose of our audit;

b. except for the possible effect of the mater 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 it appears from our examination of those books;

c. the standalone financial statements dealt with by this report are in agreement with the books of account;

d. except for the possible effects of the mater described in the Basis for Qualified Opinion paragraph, 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 (as amended);

e. the mater described under the Emphasis of Mater/ Basis of Qualified opinion paragraph 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 and taken on record by the Board of Directors, none of the directors is disqualified as at March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act;

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

i. as detailed in Note 25 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

ii. Except for the possible effect of the mater described in the Basis for Qualified Opinion paragraph, the Company, as detailed in Note 34(b) to the standalone financial statements, has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The Company did not have any derivative contracts for which there were any material foreseeable losses

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

Annexure to the Independent Auditor's Report of even date to the members of SPML Infra Limited, on the financial statements for the year ended March 31, 2015

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 (except to the extent stated in note 39 of the financial statements).

(ii) (a) The management has conducted a physical verification of inventory at reasonable intervals, except for as stated in note 40, which have not been verified 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 granted unsecured loans to companies, firms or other parties covered in the register maintained under Section 189 of the Act, and with respect to the same:

(a) the terms of repayment of the principal amount and the payment of the interest have not been stipulated and hence we are unable to comment as to whether receipt of the principal amount and the interest is regular; and

(b) in the absence of stipulated terms and conditions, we are unable to comment as to whether there is any overdue amount in excess of Rs. one lakh and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.

(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. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of custom, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and, there has been significant delays in large number of cases. The Company did not have any dues towards excise duty during the year. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they become payable are as follows:

Name of the statute Nature of the dues Amount (Rs Period to which the in lakhs) amount relates

Employees Provident Fund, Interest on delayed payment of 13.33 2012-13 to 2013-14

1952 and Employees State PF and ESI Insurance, 1948

Employees Provident Interest on delayed payment of 6.07 April, 2014 to

Fund,1952 and Employees PF and ESI September, 2014

State Insurance, 1948

Income Tax Act, 1961 TDS (including interest on 14.65 April, 2014 to delayed payment of TDS) September, 2014

The Haryana Value Added Work Contract Tax 0.60 June, 2014 and Tax Act, 2003 September, 2014

The Utar Pradesh Added Work Contract Tax 0.27 May, 2014

Tax Act,2008

The Rajasthan Value Added Work Contract Tax 1.10 April, 2014 to June,

Tax Act,2003 2014



Name of the Statute Due date Date of

payment

Employees Provident Immediate Not yet paid Fund, 1952 and Employees state Insurance 1948

Employees Provident Immediate Not yet paid Fund,1952 and Employees State Insurance 1948

Income Tax Act 1961 7th day of the subse- Not yet paid quent month

The Haryana Value 15th day of the sub- April 4, 2015 sequent month Added Tax Act,2003

The Uttar Pradesh 15th day of the sub- April 8, 2015 sequent month Added Tax Act,2008

The Rajastan Value 15th day of the sub- Not yet paid sequent month Added Tax Act,2003

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

Name of the Nature of dues Amount Amount paid

statute (Rs. in under protest lakhs) (Rs. in lakhs)

The Income Tax Income Tax 1,527.73 NIL Act, 1961

The Income Tax Income Tax 2,059.02 NIL Act, 1961

West Bengal CST Non production of C forms 105.10 NIL Act, 1956

West Bengal CST CST 6(2) sales determined as per 991.62 NIL Act, 1956 conceived sale and taxed at full rates

West Bengal CST CST Purchases from West Bengal for 293.97 NIL Act, 1956 sales outside WB projects u/s 6(2)

and taxed under WCT

West Bengal CST CST 6(2) sales determined as per 105.34 NIL Act, 1956 conceived sale and taxed at full rates

West Bengal CST CST 6(2) sales determined as per 404.98 NIL Act, 1956 conceived sale and taxed at full rates

West Bengal CST CST 6(2) sales taxed & interest 285.00 NIL Act, 1956 charged - Denial of exemption u/s

6(2) of CST Act for non-production of

statutory declaration forms 'E'

West Bengal VAT Denial of deduction under WCT & in- 335.63 NIL Act, 2003 terest charged - Denial of deduction

u/s 18(2) of the WB VAT Act for want of documents and other miscella- neous issues

West Bengal VAT Disallowance of RGGVY Sales 137.72 NIL Act, 2003

West Bengal VAT Sub-contractors' payments not 95.74 NIL Act, 2003 accepted, taxed and interest added

- Denial of deduction u/s 18(2) of

the WB VAT for want of adequate documents

West Bengal VAT WCT sales taxed improperly, input 20.04 NIL Act, 2003 credit not allowed and interest charged

West Bengal VAT WCT sales taxed improperly, input 31.93 NIL Act, 2003 credit not allowed in full and interest charged

Bihar Vat Act, Disallowance of labour component 43.13 NIL 2005

Bihar Vat Act, Department has denied the exemp- 234.27 NIL 2005 ton u/s 6(2) of the CST Act, on the grounds of pre-determined sales and non-production of statutory forms.

Central Sales Tax Disallowance of Assessed E-1 Sales 333.73 NIL Act, 1956 out of West Bengal State

UP VAT Act, Tax Liability on Exempted project 44.13 8.82 2008 RGGVY sales

UP VAT Act, Miscellaneous Demand 6.95 NIL 2008

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

The Income Tax Act,1961 AY 2011-12 Commissioner of Income

Tax, Kolkata

The Income Tax Act,1961 AY 2012-13 Commissioner of Income

Tax, Kolkata

West Bengal CST Act,1956 2005-06 President, Appellate and

Revision Board, Kolkata

West Bengal CST Act,1956 2006-07 President, Appellate and

Revision Board, Kolkata

West Bengal CST Act,1956 2007-08 President, Appellate and

Revision Board, Kolkata

West Bengal CST Act,1956 2007-08 Sr. Joint Commissioner,

Commercial Taxes (South

Circle), Kolkata, President,

Appellate and Revision

Board, Kolkata

West Bengal CST Act,1956 2008-09 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2009-10 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2009-10 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2006-07 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2008-09 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2010-11 President, Appellate &

Revision Board, Kolkata

West Bengal CST Act,1956 2011-12 Senior Joint Commissioner,

Commercial Taxes, Kolkata (S) Circle

Bihar Vat Act,2005 2007-08 JCCT Appeals, Patna

Bihar Vat Act,2005 2010-11 JCCT Appeals, Patna

Central Sales Tax,1956 2005-06 to Additional Commissioner, 2007-08 Agra

UP VAT Act,2008 2007-08 Additional Commissioner, Agra

UP VAT Act,2008 2008-09 Additional Commissioner, Agra

Name of the Name of Dues Amount Amount Statute paid (Rs.in under lakhs) protest amount relates Jharkhand VAT Tax Demand on receipts and suppres- 195.30 NIL Act, 2005 sion of turnover

Delhi VAT Act, Miscellaneous Demand 26.00 NIL 2004

Central Excise Penalty u/s 26 of Central Excise 2002 52.64 NIL Act, 1944

Finance Act, Service Tax on advance received 23.13 NIL 1994

Central Sales Tax Disallowance of Assessed E-1 Sales 18.53 NIL Act, 1956

Rajasthan VAT Tax liability on interstate sales 9.37 NIL Act, 2003

Rajasthan VAT Tax liability on interstate sales 110.64 NIL Act, 2003

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

Jharkhand VAT Act2008 2004-05 to JCCT (Appeals) Jamshedpur 2010-11

Delhi VAT Act,2004 2012-2013 Commissioner DVAT, Delhi

Central excise Act,1944 2004-05 to CESTAT, Mumbai 2005-06

Finance Act,1994 2005-06 to Commissioner Service Tax, 2006-07 Kolkata

Cental Sales Act,1956 2008-2009 The Assistant Commis- sioner (CT), Audit, DVO, Bangalore

Rajasthan VAT Act,2003 2009-2010 Deputy Commissioner,

Appeals-II Jaipur

Rajasthan VAT Act,2003 2011-2012 Deputy Commissioner,

Appeals-III Jaipur

(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) Without considering the possible effects if any, of the mater stated in, Basis for Qualified opinion paragraph of our audit report, 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.

(ix) During the year, the Company has delayed in repayment of principal and interest to banks and financial institutions. The delays with respect to principal and interest upto 90 days amounted to Rs. 6,276.12 lakhs and Rs. 919.62 lakhs, respectively; the delays between 91 to 180 days amounted to Rs. 317.78 lakhs and Rs. 1.76 lakhs, respectively to banks and financial institutions.

As at the year end, the Company has defaulted in repayment of loan and interest aggregating to Rs. 312.50 lakhs and Rs. 35.73 lakhs respectively to banks. As at the balance sheet date, the periods of delays in these cases were up to 90 days.

(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 For SUNIL KUMAR GUPTA & CO.

Chartered Accountants Chartered Accountants

Firm Registration Number: 001076N/N500013 Firm Registration No : 003645N

per Neeraj Sharma per S.K. Gupta

Partner Partner

Membership No. 502103 Membership No. 082486

Gurgaon, May 29, 2015 Gurgaon, May 29, 2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparaton of these financial statements that give a true and fair view of the financial positon, financial performance and cash flows of the Company in accordance with accountng principles generally accepted in India, including the Accountng Standards notfed under the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Afairs. This responsibility includes the design, implementaton and maintenance of internal control relevant to the preparaton and presentaton 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 Auditng issued by the Insttute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparaton and fair presentaton 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 efectveness of the entty''s internal control. An audit also includes evaluatng the appropriateness of accountng policies used and the reasonableness of the accountng estmates made by management, as well as evaluatng the overall presentaton of the financial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Basis for qualifed opinion

Atenton is drawn to Note No. 41 (a) to the financial statements regarding complete foreclosure of a contract by a customer during the year, at the risk and cost of the Company. Although the Company has fled its counter claims, the customer has not yet raised any claims on the Company and the mater is presently pending with Hon''ble Supreme Court for appointment of an independent arbitrator. In view of the uncertaintes involved, we are unable to comment on the ultmate outcome of the litgaton and also on the recoverability of the account receivables and fixed assets of Rs.1,904 lakhs and Rs.1,608 lakhs respectvely, as on March 31, 2014, in respect of the said contract.

Opinion

Except for the possible efects of the mater stated in the basis for qualifed opinion paragraph above, In our opinion and to the best of our informaton and according to the explanatons given to us, the financial statements give the informaton required by the Companies Act, 1956 ("the Act") in the manner so required and give a true and fair view in conformity with the accountng principles generally accepted in India:

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

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

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

Emphasis of Mater

Atenton is drawn to Note No. 44 to the financial statements regarding the recogniton of income of Rs.12,520.34 lakhs during the year arising out of arbitraton awards pronounced in favour of the Company (including Rs.10,952.02 lakhs in respect of arbitraton awards pronounced in earlier years) and interest of Rs.2,902.94 lakhs recognised thereon and also of the arbitraton awards of Rs. 3028.30 lakhs recognized in the previous year, both remaining outstanding as on March 31, 2014, against which the customers have preferred appeals.

Our audit opinion is not qualifed in respect of the above mater.

Report on Other Legal and Regulatory Requirements

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

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

(a) We have obtained all the informaton and explanatons 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 examinaton 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accountng Standards notfed under the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Afairs;

(e) On the basis of writen representatons received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-secton (1) of secton 274 of the Companies Act, 1956.

Annexure referred to in of our independent auditor report of even date Re: SPML INFRA LIMITED (the Company)

(i) (a) The Company has maintained proper records showing full partculars, including quanttatve details and situaton of fixed assets.

(b) Except to the extent stated in note no. 41 (a) of the financial statements, fixed assets were physically verifed by the management during the yea in accordance with a planned programme of verifying all the fixed assets over a period of three years which, in our opinion, is reasonable havin 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 substantal disposal of fixed assets during the year.

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

(b) The procedures of physical verifcaton of inventory followed by the management are reasonable and adequate in relaton to the size of th Company and the nature of its business.

(c) According to the informaton and explanatons given to us, the Company is maintaining proper records of inventory and no material discrepancie were Noticed on physical verifcaton.

(iii) (a) The Company has granted loans to six partes covered in the register maintained under Secton 301 of the Companies Act, 1956. The maximu amount involved during the year was Rs.2,916.44 lakhs and the year end balances of loans granted to such partes was Rs. 2,328.76 lakhs.

(b) In our opinion and according to the informaton and explanatons given to us, the rate of interest and the terms and conditons for the abov loans are not prima facie prejudicial to the interest of the Company.

(c) The above loans are stated to be repayable on demand. As informed, the repayment of above loans, to the extent demanded by the Compan has been received during the year and thus, there was no default on the part of the borrowers. The payment of interest with respect to suc loans is stated to have been regular.

(d) In view of the above loans being repayable by the partes on demand, there is no overdue amount of loans granted to such partes.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other partes covered in the register maintained unde secton 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 an hence not commented upon.

(iv) In our opinion and according to the informaton and explanatons given to us, there is an adequate internal control system commensurate with th 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 th course of our audit, we have not observed any major weakness or contnuing failure to correct any major weakness in the internal control system o the company in respect of these areas.

(v) (a) According to the informaton and explanatons provided by the management, we are of the opinion that the partculars of contracts or arrangement referred to in secton 301 of the Companies Act, 1956 that need to be entered into the register maintained under secton 301 have been so entered (b) The Company has entered into certain transactons, with Companies having common director, which require prior approval of Central Governmen u/s 297 of the Companies Act, 1956, as more fully disclosed in note nos. 47 (a) to 47 (c) of the financial statements. While in respect of the Companie mentoned in note nos. 47 (a) & 47 (b), the necessary applicaton has been fled/ is in the process of being fled with the Central Government. I view of non-approval of the applicaton for the contract stated in note no. 47 (c) by the Central Government, as informed by the management, th Company is in the process of fling for compounding under the relevant provisions of the Companies Act. Except as stated above, in our opinio and according to the informaton and explanatons given to us, the transactons made in pursuance of such contracts or arrangements exceedin the value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailin market prices at the relevant tme.

(vi) As informed, the Company has not accepted any deposits from the public within the purview of Sectons 58A and 58AA of the Companies Act, 195 and the rules framed thereunder.

(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 account maintained by the Company pursuant to the rules made by the Central Government for the maintenanc of cost records under secton 209(1)(d) of the Companies Act, 1956, in respect of its constructon actvites and are of the opinion that prima faci the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor educaton and protecton fund, employees'' state insurance, income-tax, sales-ta wealth-tax, service tax, customs duty and cess to the extent applicable, have not been regularly deposited with the appropriate authorites an there have been significant delays in a number of cases. The Company did not have any dues towards excise dutes during the year. (b) According to the informaton and explanatons given to us, undisputed dues in respect of provident fund, investor educaton and protecton fun employees'' state insurance, income-tax, wealth-tax, sales tax, customs duty, excise duty, employees'' state insurance, cess and other materi statutory dues which were outstanding at the year-end for a period of more than six months from the date they became payable, are as follow

Name of the statute Nature of the dues Amount (Rs Period to which the in lakhs) amount relates

The Bihar Value Added Works Contract Tax 384.42 2008-09 to Tax Act, 2005 (including interest) 2013-14

Finance Act, 1994 Interest on delayed 66.43 2011-12 to payment of Service Tax 2013-14

The Bihar Value Added Interest on delayed 72.00 2007-2008 to Tax Act, 2005 payment of Entry Tax 2012-13

Employees Provident Interest on delayed 33.46 2012-13 to Fund, 1952 payment of Provident Fund 2013-14



Name of the statue Due Date Date of Payment

The Bihar Value Added Tax Act, 2005 20th day of Not yet paid subsequent month

Finance Act, 1994 Immediate Not yet paid

The Bihar Value Added Tax Act, 2005 Immediate Not yet paid

Employees Provident Fund, 1952 Immediate Not yet paid

(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 the dues Amount (Rs Period to which the in lakhs) amount relates

West Bengal Non-Producton of "C" Forms 105.10 2005-06

CST Act, 1956 CST 6(2) sales determined as per 991.62 2006-07 conceived sale and taxed at full rates CST purchases from West Bengal 293.97 2007-08 (WB) for sales outside WB projects u/s 6(2) and taxed under WCT

CST 6(2) sales determined as per 105.34 2007-08 conceived sale and hence taxed at

785.45 2008-09 full rates

343.60 Disallowance of E1 sales 0.59 2010-11

West Bengal Disallowance of Rajiv Gandhi Grameen 137.72 2006-07 VAT Act Vidyutkaran Yojna (RGGVY) Sales

Local Sale and RGGVY sales are 261.70 2008-09 added to WCT and taxed

344.14 2009-10

Bihar VAT Act Disallowance of labour component 320.04 2006-07to Utar Pradesh Disallowance of 2009-10 Assessed E-1 Sales 333.73 2005-06to CST Act out of West Bengal State 2007-08

Uttar Pradesh Tax Liability on Exempted project 44.13 2007-08 VAT Act RGGVY Sales

Miscellaneous Demand 6.95 2008-09

Jharkhand VAT Disallowance of Assessed E-1 1,313.74 2004-05 to Act Sales out of West Bengal State/ 2010-11 Suppression of Turnover

Delhi VAT Act Miscellaneous Demand 26.00 2012-13

Central Excise Penalty under Rule 26 of Central 52.64 2004-05 to Act,1944 Excise 2002 2005-06

Finance Act, Service tax on advance received 23.13 2005-06to 1994 2006-07

Madhya VAT Demand 385.30 2010-11 Pradesh VAT Act

Andhra Disallowance of E-1 Sales 169.22 2009-10 Pradesh VAT Act Disallowance of Input VAT 557.01

Karnataka CST Disallowance of E-1 Sales 2,598.23 2007-08 Act

590.47 2008-09

Rajasthan VAT Tax liability on interstate sales 90.68 2009-10 Act

Name of the Statue Forum where dispute is pending

West Bengal CST Act, 1956 President, Appellate and Revision Board, Kolkata

President, Appellate and Revision Board, Kolkata

President, Appellate and Revision Board, Kolkata

Sr. Joint Commissioner, Commercial Taxes (South Circle), Kol- kata President, Appellate and Revision Board, Kolkata

Additonal Commisioner, Commercial Tax, Kolkata

West Bengal VAT Act President, Appellate and Revision Board, Kolkata

Sr. Joint Commissioner, Commercial Taxes (South Circle), Kolkata

Bihar VAT Act JCCT, Appeals, Patna

Utar Pradesh CST Act Additonal Commissioner- Agra

Utar Pradesh VAT Act Additonal Commissioner- Agra

Jharkhand VAT Act Joint Commissioner, Ranchi

Delhi VAT Act Commissioner DVAT, Delhi

Central Excise Act,1944 CESTAT, Mumbai

Finance Act, 1994 Commissioner Service Tax, Kolkata

Madhya Pradesh VAT Act CTO Bhopal, VAT Circle

Andhra Pradesh VAT Act The Appellate Deputy Commissioner(CT) Punjaguta Division, Hyderabad

Karnataka CST Act The Assistant Commissioner(CT) Audit, DVO, Bangalore

Rajasthan VAT Act Deputy. Commissioner, Appeals - II, Jaipur

(x) Without considering the consequental effect, if any, of the mater stated in "Basis for qualified opinion" paragraph of our auditors'' report, 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 informaton and explanatons given by the management during the year, the Company has delayed in repayment of term loans (including interest) to banks to the extent of Rs. 3,928.46 lakhs, which were regularised over a period of tme, with an overall delay of less than 90 days. Out of above, Rs. 113.60 lakhs overdue as on the balance sheet date relates to interest on term loan paid subsequently. The Company has not defaulted in repayment to dues to financial insttutons. The Company did not have any dues towards debenture holders during the year.

(xii) According to the informaton and explanatons given by the management 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 securites.

(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 Order are not applicable.

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

(xv) According to the informaton and explanatons given to us, the Company has given guarantee for loans taken by others from bank or financial insttutons, the terms and conditons whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

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

(xvii) According to the informaton and explanatons given to us and on an overall examinaton 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 preferental allotment of shares during the year to partes or companies covered in the register maintained under secton 301 of the Companies Act, 1956.

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

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

(xxi) Based upon the audit procedures performed for the purpose of reportng the true and fair view of the financial statements and as per the informaton and explanatons 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. LLP For Sunil Kumar Gupta & Co.

Chartered Accountants Chartered Accountants

Firm Registraton No.301003E Firm Registraton No.003645N

per Raj Agrawal per S. K. Gupta

Partner Partner

Membership No. 082028 Membership No. 82486

Place of Signature: Gurgaon Place of Signature: Gurgaon

Date: May 29, 2014 Date: May 29, 2014


Mar 31, 2013

1. Report on the financial statements

We have audited the accompanying financial statements of SPML Infra Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and 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.

2. 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 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.

3. Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis for qualified opinion

Attention is drawn to Note No. 43 in respect of a contract partially terminated by the client, the matters relating to settlement of claims, counter claims and consequential damages whereof are presently sub-judice. Accordingly, we are unable to comment about the impact, if any, of the aforesaid termination on the related contract value, contract cost and unbilled revenue and its consequential impact on the profit for the year and the reserves and surplus of the company as at the Balance Sheet date.

The audit report for the year ended March 31, 2012 was also modified for the above matter.

5. Qualified Opinion

Except for the possible effect of the matter stated in paragraph 4 above, in our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the 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.

6. Emphasis of Matter

Attention is drawn to Note No.48 to the financial statements regarding the arbitration claims of Rs.6,624.71 lakhs (including Rs.3,596.41 lakhs awarded in an earlier year) having been recognised in the books as income during the year as the management believes that these awards have reached their finality and it is confident to recover these arbitration claims in full. Our opinion is not qualified in respect of this matter.

7. Report on Other Legal and Regulatory Requirements

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

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

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

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

(c) The Balance Sheet, 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 subsection (3C) of section 211 of the Companies Act, 1956;

(e) 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 Companies Act, 1956.

Annexure referred to in paragraph 7(1) under the heading "Report on other legal and regulatory requirement" of our report of even date

Re: SPML INFRA LIMITED (the Company)

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

(b) Fixed Assets were physically verified by the management during the year in accordance with a planned programme of verifying all the fixed assets 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. 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.

(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) According to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to four parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.2,740.83 lakhs and the year end balances of loans granted to such parties was Rs. 2,698.79 lakhs.

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

(c) The above loans are stated to be repayable on demand. As informed, the repayment of above loans, to the extent demanded by the Company, has been received during the year and thus, there was no default on the part of the borrowers. The payment of interest with respect to such loans is stated to have been regular.

(d) In view of the above loans being repayable by the parties on demand, there is no overdue amount of loans granted to such parties.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, 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, 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, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

(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 our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) As informed, the Company has not accepted any deposits from the public within the purview of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(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 section 209(1)(d) of the Companies Act, 1956, in respect of its construction activities 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 and cess to the extent applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a number of cases.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, sales tax, customs duty, excise duty, employees'' state insurance, cess and other material statutory dues which were outstanding at the year-end for a period of more than six months from the date they became payable, are as follows:

(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, explanations and documents produced to us by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks or financial institutions. The Company has no outstanding dues from any debenture holders.

(xii) According to the information and explanations given by the management 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 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) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these 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 during the year to parties or companies 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) The Company has not raised any money by 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. LLP For Sunil Kumar Gupta & Co.

Firm Registration No.301003E Firm Registration No.003645N

Chartered Accountants Chartered Accountants

Per R. K. Agrawal S. K. Gupta

Partner Partner

Membership No.16667 Membership No.82486

Place : Gurgaon Place : Gurgaon

Date : May 27, 2013 Date : May 27, 2013


Mar 31, 2012

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 221 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. Attention is drawn to the following notes to the financial statements :

(a) Note No. 32 regarding accounting of share of loss (net) amounting to Rs. 433.85 lakhs from seven Joint Ventures on the basis of unaudited financial statements as certified by the management. Further adjustments, if any, on this account are presently not ascertainable.

(b) Note No.44 regarding non provision of tax liability of Rs. 7482.04 lakhs as on March 31, 2012 (including Rs. 6,907.64 lakhs upto March 31, 2011) arising on account of the amendment to Section 80IA of the Income Tax Act, 1961 in the Finance Act, 2009. The Company has filed a writ with the Hon'ble High Court at Calcutta, challenging the validity of the above retrospective amendment, which as per legal opinion obtained by the Company, is ultra vires to the main section of the above Act. The income tax officer has since disallowed the aforesaid claim of the Company in view of the said retrospective amendment, against which the Company has filed appeals with the appellate authorities. Till the matter is decided by the Hon'ble High Court, the liability, if any, in this regard is unascertainable. We are unable to comment on the impact of the above non-provision of tax on the Company's profit for the year and reserves and surplus at the year end. Further, because of the above, the Company has also not considered Minimum Alternate Tax benefit of Rs. 2051.67 lakhs (including Rs. 1,765.11 lakhs upto March 31, 2011) as credit in the accounts.

(c) Note No .45 regarding the premature termination by a client, of a part of the contract with consequential damages, which has been challenged by the Company in the Hon'ble Supreme Court. The Company has also lodged counter claims against the client for the losses suffered due to delay on their part and feels that no further liability would accrue to the Company because of the above termination. The matter being sub-judice, we are unable to comment on the impact, if any, of the aforesaid termination on the related contract value, contract cost and unbilled revenue and its consequential impact on the profit for the year and the reserves and surplus of the Company as at the Balance Sheet date.

The audit report for the year ended March 31, 2011 was also modified for the matters stated in paragraphs (a), (b) and

(c) above.

5. 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;

(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) 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) In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of our observations stated in para 4 above, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2012,

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

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

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

Re: SPML INFRA LIMITED

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

fixed assets.

(b) Fixed Assets were physically verified by the management during the year in accordance with a planned programme of verifying all the fixed assets 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) 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) According to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to four parties covered in the register maintained under Section 301 of the Companies

Act, 1956. The maximum amount involved during the year was Rs.2,148.57 lakhs and the year end balances of loans granted to such parties was Rs. 1,855.70 lakhs.

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

(c) The above loans are stated to be repayable on demand. As informed, the repayment of above loans, to the extent demanded by the Company, has been received during the year and thus, there was no default on the part of the borrowers. The payment of interest with respect to such loans is stated to have been regular.

(d) In view of the above loans being repayable by the parties on demand, there is no overdue amount of loans granted to such parties.

(e) The Company has taken loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 177.06 lakhs and the year-end balances of the above loans taken from such parties were Rs. 12.51 lakhs.

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

(g) The above loans taken are stated to be re-payable by the Company on demand. As informed, the repayment of above loans, to the extent demanded by the lenders, was paid by the Company during the year and thus, there has been no default on the part of the Company. The loans taken are interest free.

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

(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 our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) As informed, the Company has not accepted any deposits from the public within the purview of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

(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 section 209(1)(d) of the Companies Act, 1956, in respect of its construction activities 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 to the extent applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a number of cases.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, income-tax, wealth-tax, sales tax, customs duty, excise duty, employees' state insurance, cess and other material statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, are as follows : Name of the Director Nature of the dues Amount Period to Which the (Rs in Lakhs Period to which Sale Tax Act for various States Works Contract Tax 258.38 2008-09 to 2011-12

Finance Act, 1994 Service Tax 127.11 2011-12

(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 Nature the Dues Amount Period to Which Forum Where Dispute

West Bengal Non-Production of 'C' Forms 105.10 2005-06 President, Appellate & Revision Board, Kolkata

CST Act 1956 CST 6(2) sales determined as pre 991.62 2006-07 President, Appellate & Revision conceived sale and taxed at full rates. Board, Kolkata

CST purchases from West Bengal (WB) 293.97 2007-08 President, Appellate & Revision

for Sales outside WB projects u/s 6(2) Board, Kolkata and taxed under WCT

CST 6(2) sales determined as pre 785.45 2008-09 Sr Joint Commr, Comml Taxes

conceived sale and hence taxed (south circle), Kolkata at full rates. West Bengal Disallowance of Rajiv Gandhi Grameen 137.72 2006-07 President, Appellate & Revision

VAT Act Vidyutikaran Yojana (RGGVY) Sales Board, Kolkata

Levy of tax on CST Sales to WB Projects, 105.34 2007-08 President, Appellate & Revision

RGGVY Sales Board, Kolkata

Local Sale and RGGVY sales are added 261.70 2008-09 Sr Joint Commr, Comml Taxes to WCT and taxed (south circle), Kolkata

MP General Entry Tax 34.67 2004-05 Joint Commissioner (Appeal),

Sales Tax Act Bhopal

Delhi Sales Non-submission of 'C' Forms 17.04 1991-92, Deputy Commissioner Tax Act 1999-00, 1998-99 (Commercial Tax) Asst. STO, Delhi

Kerala VAT Act Tax demand on advances received 71.34 2007-08 CTO - WC - Ernakulam

Income Tax Income Tax demand due to 2951.78 2004-05 to CIT (Appeals), Kolkata

Act, 1961 disallowance of benefit u/s80A 2008-09

Central Excise Penalty under Rule 26 of the 2004-05 to CESTAT, Mumbai

Act, 1944 Central Excise Rules, 2002 52.64 2005-06

Finance Act, Service tax on advance received 23.13 2005-06 toCommissioner Service Tax, 1994 2006-07 Kolkata

(x) Without considering the consequential effects, if any, of the matters stated in paras 4(a) to 4(c) of our audit report, whose impact, if any, is presently unascertainable, 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, explanations and documents produced to us by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. The Company has no outstanding dues from any financial institution or debenture holders.

(xii) According to the information and explanations given by the management 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 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) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these 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 during the year to parties or companies 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) The Company has not raised any money by 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. For Sunil Kumar Gupta & Co.

Firm Registration No.301003E Firm Registration No.003645N

Chartered Accountants Chartered Accountants

Per R. K. Agrawal S. K. Gupta

Partner Partner

Membership No.16661 Membership No.82486

Place : Gurgaon Place : Gurgaon

Date : May 29, 2012 Date : May 29, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of SPML Infra Limited (Formerly Subhash Projects & Marketing Limited) ('the Company') as at March 31, 2011 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 Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (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. Attention is drawn to the following notes on Schedule 20B:

(a) Note No. 8 regarding accounting of share of loss amounting to Rs. 34,633 thousands from Joint Ventures on the basis of unaudited financial statements as certified by the management. Further adjustments, if any, on this account are presently not ascertainable.

(b) Note No.23 regarding non provision of tax liability of Rs. 690,764 thousands as on March 31, 2011 (including Rs. 561,400 thousands upto March 31, 2010) arising on account of the amendment to Section 80IA of the Income Tax Act, 1961 in the Finance Act, 2009. The Company has filed a writ with the Hon'ble High Court at Calcutta which has been admitted as well, challenging the validity of the above retrospective amendment, which as per legal opinion obtained by the company, is ultra vires to the main section of the above Act. Till the matter is decided by the Hon'ble High Court, the liability, if any, in this regard is unascertainable. We are unable to comment on the impact of the above non-provision of tax on the Company's profit for the year and networth at the year end.

Because of the above, Minimum Alternate Tax benefit of Rs. 176,511 thousands (including Rs. 141,622 thousands upto March 31, 2010) has not been considered as credit in the accounts.

(c) Note No.24 regarding the premature termination by a client, of a part of the contract with consequential damages, has been challenged by the Company in the Hon'ble Supreme Court. The Company has also lodged counter claims against the client for the losses suffered due to delay on their part and feels that no further liability would accrue to the Company because of the above termination. The matter being sub-judice, we are unable to comment about its impact, if any, on the profit for the year and the networth of the Company as at the Balance Sheet date.

The audit report for the year ended March 31, 2010 was also modified for the matters stated in paragraphs (a) and (b) above.

5. 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;

(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;

(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;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, subject to the impact of the matters in paras 4 above, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2011,

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

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

Annexure referred to in paragraph 3 of our report of even date Re: SPML INFRA LIMITED (Formerly Subhash Projects and Marketing Limited)

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

(b) Fixed Assets were physically verified by the management during the year in accordance with a planned programme of verifying all the fixed assets 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) 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) According to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to four parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 225,803 thousands and the year end balances of loans granted to such parties was Rs. 107,855 thousands.

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

(c) The above loans are stated to be repayable on demand. As informed, the repayment of above loans, to the extent demanded by the Company, has been received during the year and thus, there was no default on the part of the borrowers. The payment of interest with respect to such loans is stated to have been regular.

(d) In view of the above loans being repayable by the parties on demand, there is no overdue amount of loans granted to such parties.

(e) The Company has taken loans from four companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 344,974 thousands and the year- end balances of the above loans taken from such parties was Rs. 99,483 thousands.

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

(g) The above loans taken are stated to be re-payable by the Company on demand. As informed, the repayment of above loans, to the extent demanded by the lenders, was paid by the Company during the year and thus, there has been no default on the part of the Company. The payment of interest with respect to such loans is stated to have been regular.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of 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 in respect of these areas.

(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 our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the purview of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder.

(vii) The Company has an internal audit system, the scope and coverage of which, in our opinion requires to be enlarged to make it 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 section 209(1)(d) of the Companies Act, 1956, in respect of wind power 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 and cess to the extent applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in number of 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, undisputed dues in respect of income-tax, wealth- tax, sales tax, customs duty, excise duty, employees' state insurance, cess and other material statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, are as follows:

Name of the statute Nature of the dues Amount Period to which the (Rs in thousands) amount relates

Sale Tax Act for various States Works Contract Tax 15,765 2008-09 to 2010-11

Employees ' State Insurance Act, 1948 ESI Deduction 288 2010-11

Finance Act, 1994 Service Tax 5,633 2010-11

(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 Nature of The Dues Amount Period to which Forum where Dispute the Statute (Rs. in the amount is pending thousands) relates

West Bengal Non-submission of 'C' Forms 10,510 2005-06 Deputy Commissioner Appeal CST Act (Commercial Taxes), Kolkata

Tax liability determined at full 75,000 2006-07 Deputy Commissioner Appeal rate pending submission (Commercial Taxes), Kolkata of documents

West Bengal Tax liability determined at full 1,58,950 2006-07 Sen. Joint Commissioner of Vat Act rate pending submission Commercial Taxes of documents

MP General Demand due to entry 3,467 2004-05 Joint Commissioner (Appeal),

Sales Tax Act tax liability Bhopal

Delhi Sales Non-submission of 'C' Forms 1,704 1991-92, Deputy Commissioner Tax Act 1999-00, (Commercial Tax) 1998-99 Asst. STO, Delhi

Kerala VAT Act Demand on advances received 7,134 2007-08 CTO – WC – Ernakulam

Andhra Pradesh Demand due to differential rates 4,229 2008-09 Commercial Tax (Appeal) VAT Act

Income Tax Income Tax demand due to 197,974 2007-08 CIT (Appeals) Act, 1961 disallowance of benefit u/s 80IA Poddar Court, Kolkata

Central Excise Penalty under Rule 26 of the 5,264 2004-05 to CESTAT, Mumbai

Act, 1944 Central Excise Rules, 2002 2005-06

Finance Act, Service tax on advance received 2,313 2005-06 to Commissioner 1994 2006-07 Service Tax, Kolkata

(x) Without considering the matters stated in paras 4(a) to 4(c) of our audit report, whose impact, if any, is presently unascertainable, 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, during the year has defaulted in repayment of dues including working capital facilities to certain banks to the extent of Rs. 1055,945 thousands (defaults being for a period of less than 90 days) of which Rs. 1030,120 thousands was paid during the year and the balance Rs 25,825 thousands although overdue as on 31st March 2011, has since been fully paid. The Company has no outstanding dues from any financial institution or debenture holders.

(xii) According to the information and explanations given by the management 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 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) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these 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 during the year to parties or companies 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) The Company has not raised any money by 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 & Company For Sunil Kumar Gupta & Co.

Firm Registration No.301003E Firm Registration No.003645N

Chartered Accountants Chartered Accountants

Per R. K. Agrawal Per S. K. Gupta

Partner Partner

Membership No.16667 Membership No.82486

Place : New Delhi Place : New Delhi

Date : May 30, 2011 Date : May 30, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of SPML Infra Limited (Formerly Subhash Projects & Marketing 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (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. (a) Attention is drawn to Note No. 26 on Schedule 20B regarding non-provision of tax liability of Rs.561,400 thousands (including Rs.183,900 thousands for the year) arising on account of the recent amendment to Section 80IA of the Income Tax Act, 1961 in the Finance Act, 2009. The Company has already filed a writ with the Honble High Court at Calcutta which has been admitted as well, challenging the validity of the above retrospective amendment which as per legal opinion obtained, is ultra vires to the main section the above Act. Till the matter is decided by the Honble High Court, the liability, if any, in this regard is unascertainable. We are unable to comment on the impact of the above non-provision of tax on the Companys profit for the year and net worth at the year end.

(b) Attention is drawn to Note No 8. on Schedule 20B regarding accounting of share of profit from joint ventures amounting to Rs.9,576 thousands on the basis of unaudited financial statements as certified by the management. Adjustment, if any, on this account is presently not ascertainable.

5. 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;

(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;

(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;

(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) In our opinion and to the best of our information and according to the explanations given to us, subject to the impact of the matters given in para 4, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2010,

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date) Re: SPML INFRA LIMITED (formerly Subhash Projects and Marketing Limited)

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

(b) Fixed assets have been physically verified by the management during the year and 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 for materials lying with third parties, a major part of which has however, been confirmed by the respective parties at the year end.

(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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loan to three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.170,443 thousands and the year end balances of loans granted to such parties was Rs. 150,284 thousands.

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

(c) The above loans are stated to be repayable on demand. As informed, since the Company has not demanded repayment of the above loans during the year, there has been no default on the part of parties to whom the monies have been lent by the Company. The payment of interest with respect to such loan has been generally regular.

(d) In view of the above loans being repayable by the parties on demand, there is no overdue amount of loans granted to such parties.

(e) The Company has taken loan from four companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 383,710 thousands and the year-end balance was Rs. 373,901 thousands.

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

(g) The above loans taken are stated to be re-payable by the Company on demand. As informed, since the lenders have not demanded repayment of the above loans during the year, there has been no default on the part of the Company. The payment of interest with respect to such loans has been generally regular.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable 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.

(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 our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) As informed, the Company has not accepted any deposits from the public during the year.

(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 section 209(1)(d) of the Companies Act, 1956, in respect of wind power and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues of provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty, cess, etc. have generally been regularly deposited with the appropriate authorities although there have been certain cases of delays in deposit during the year. 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, undisputed dues in respect of income-tax, wealth-tax, sales tax, customs duty, excise duty, cess and other statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, are as follows:

Period to which the Name of the statute Nature of the dues Amount (Rs in thousands) amount relates

Sale Tax Act for various States Sales Tax on sale of goods 7,073 2003-04 to 2008-09

Works Contract Tax deducted 7,381 2002-03 and 2006-07 while payment to contractors to 2008-09

Income Tax Act,1961 Tax Deducted at Source 255 2006-07

The Finance Act, 1994 Service Tax on construction 1,503 2009-10 contracts

(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:

Amount Name of the Statute Nature of The Dues (Rs. in thousands)

West Bengal CST Act Non-submission of C Forms 10,510

Tax liability determined at full rate 75,000 pending submission of documents

West Bengal Vat Act Tax liability determined at full rate 1,58,950 pending submission of documents

MP General Sales Tax Demand due to entry tax liability 3,467 Act

Delhi Sales Tax Act Non-submission of C Forms 1,704

Kerala VAT Act Demand on advances received 7,134

Andhra Pradesh VAT Act Demand due to differential rates 4,229



Name of the Statue Period to which Forum where Dispute is the amount relates pending

West Bengal CST Act 2005-06 Deputy Commissioner (Commercial Taxes), Kolkata

West Bengal Vat Act 2006-07 Sen. Joint Commissioner of Commercial Taxes

MP General Sales Tax Act 2006-07 Sen. Joint Commissioner of Commercial Taxes

Delhi Sales Tax Act 2004-05 Joint Commissioner (Appeal), Bhopal

Kerala VAT Act 1991-92, Deputy Commissioner 1999-00, (Commercial Tax) Asst. STO,

1998-99 Delhi

Andhra Pradesh VAT Act 2007-08 CTO - WC - Ernakulam

2008-09 Commercial Tax (Appeal)

(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 during the year have defaulted in repayment of dues including working capital facilities to certain banks to the extent of Rs.3,959,484 thousands of which Rs.3,580,951 thousands was paid during the year and the balance Rs.378,533 thousands was overdue as on 31st March 2010 has since been fully paid. The Company has no outstanding dues in respect of a financial institution or 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 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) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these 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 during the year to parties or companies 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) The Company has not raised any money by 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. For SUNIL KUMAR GUPTA & CO.

Firm Registration No.: 301003E Firm Registration No.: 003645N

Chartered Accountants Chartered Accountants

Per R.K.Agrawal S. K. Gupta

Partner Partner

Membership No.: 16667 Membership No.: 82486

Place: Kolkata Place: Kolkata

Date: May 29, 2010 Date: May 29, 2010

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