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Auditor Report of Vascon Engineers Ltd.

Mar 31, 2018

INDEPENDENT AUDITORSâ REPORT

To The Members of Vascon Engineers Limited

Report on the Standalone In AS Financial Statements

We have audited the accompanying standalone In AS financial statements of Vascon Engineers Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementsâ Responsibility for the Standalone In AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone In AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (In AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone In AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

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

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order issued under section 143(11) of the Act.

We conducted our audit of the standalone In AS financial statements 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 In AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone In AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone In AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone In AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone In AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone In AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone In AS 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 In AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone In AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone In AS financial statements - Refer note 31 to the financial statements.

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

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

2. As required by the Companies (Auditors'' Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirements'' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of VASCON ENGINEERSLIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone In AS financial statements of the Company for the year ended on that date

Managements'' Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

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

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

Opinion

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.

(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programmed of verification which, in our opinion, provides for physical verification of all fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered documents provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been pledged as security for loans and guarantees are held in the name of the Company as at the balance sheet date.

(ii) In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, are at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.

(b) The schedule of repayment of principal and payment of interest has not been stipulated and in the absence of such schedule, we are unable to comment on the regularity of the repayments or receipts of principal amounts and interest.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) There were delays by the Company in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Goods and Service Tax, cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable except for as given below:

Name of Statute	Nature of Dues	Amount (Rs.)	Period to which the Amount Relates	Due Date
Income Tax Act, 1961	Tax Deducted at Source (TDS)	60,595,211	April 2016 to August 2017	7th of the following month
Finance Act, 1994	Service Tax	54,241,756	April 2015 to June 2017	6th of the following month
Employee Provident Fund Act, 1952	Provident Fund	6,971,940	April 2017 to August 2017	15th of the following month
Sales Tax Act	Sales Tax	463,199	April 2011 to March 2012	20th of every following month
Bombay Provincial Municipal Corporations Act, 1949	Local Body Tax	6,949,100	April 2015 to June 2017	20th of every following month

(c) Details of dues of Income tax, Sales-tax, Service tax, Goods and Service tax, Customs Duty and Cess which have not been deposited as on March 31, 2018 on account of disputes are given below:

Name of Statute	Nature of Dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Involved (Rs.)	Amount Unpaid (Rs.)
Sales Tax Act	Sales Tax / Value added tax / Central Sales Tax	Deputy Commissioner, Mumbai	Financial Year 200506	3,057,591	2,607,591
			Financial Year 200607	2,862,405	2,797,217
			Financial Year 200708	4,892,545	4,722,545
			Financial Year 200809	14,631,098	13,161,098
			Financial Year 200910	7,453,425	7,108,425
			Financial Year 201011	13,414,461	12,914,461
			Financial Year 201112	2,519,637	2,427,137
			Financial Year 201314	18,746,651	18,746,651
		Commissioner of Appeals, UP	Financial Year 201112	136,171	136,171
		Commissioner of Appeals, UP	Financial Year 201213	340,365	340,365
		Commercial Tax Officer, Goa	Financial Year 201011	4,468,475	4,468,475

Income Tax Act, 1961	Income Tax	Deputy Commissioner of Income Tax	Assessment Year 1998-99	6,768,009	6,768,009
			Assessment Year 2008-09	23,235,387	7,138,821
			Assessment Year 2009-10	46,407,820	46,407,820
Finance Act, 1994	Service Tax	Service Tax Tribunal, Delhi	January, 2007 to December, 2007	1,413,354	530,008
		Service Tax Tribunal, Mumbai	January, 2008 to September, 2008	634,088	317,044
		Service Tax Tribunal, Mumbai	April, 2010 to March 2015	9,744,755	8,770,280

(viii) In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to bank (The Sara swat Co-operative Bank Limited) and Financial Institution (Volkswagen Finance Private Limited) amounting to Rs. 979,916 (including interest: Rs 206,256). Subsequently these loan facilities are pre-closed and there are no defaults existing as at the balance sheet date. Further, the Company has not taken any loans or borrowings from Government.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, money raised by way of term loan have been applied for the purposes for which they were raised.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements 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 and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

Vascon Engineers Limited (the "Company") was incorporated on January 1, 1986 and is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

The Company is a public limited company incorporated and domiciled in India. The address of its corporate office is '' Vascon Weikfield chambers , Behind Novato Hotel , Opposite Hyatt Hotel, Pune Nagar Road, Pune - 411014''.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorized for issue on May 28, 2018.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)

Hemant M. Joshi

(Partner)

(Membership No. 38019)

Place: Pune

Date: May 28, 2018

Mar 31, 2016

TO THE MEMBERS OF

VASCON ENGINEERS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of VASCON ENGINEERS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 prescribed under section 133 of the Act, as applicable.

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.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under section 143 (11) of the Act.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164

(2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 35 to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

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

2. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

ANNEXURE "A TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 1 (f)under âReport on Other Legal and Regulatory Requirements'' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of Vascon Engineers Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Meaning of Internal Financial Controls Over Financial Reporting

(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

Opinion

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

(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered documents provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service

Name of Statute	Nature of Dues	Amount (Rs.)	Period to which the Amount Relates	Due Date
Income Tax Act, 1961	Tax Deducted at Source (TDS)	59,502,074	April 2014 to August 2015	7th of every following month
Finance Act, 1994	Service Tax	92,097,248	March 2014 to August 2015	6th of the following month
Employee Provident Fund Act, 1952	Provident Fund	6,430,300	April 2014 to August 2015	15^th of every following month
Employees State Insurance Act, 1948	ESIC	11,503	June 2015 to August 2015	21^st of every following month
Sales Tax Act	Sales Tax	4,999,167	April 2011 to June 2015	20th of every following month
Bombay Provincial Municipal Corporations Act, 1949	Local Body Tax	819,630	April 2015 to August 2015	20th of every following month

(c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, service tax, customs duty and cess which have not been deposited on account of any dispute except as given below:

Name of Statute	Nature of Dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Involved (Rs.)	Amount Unpaid (Rs.)
Sales Tax Act	Sales Tax / Value added tax / Central Sales Tax	Deputy Commissioner, Mumbai	Financial Year 2005-06	3,057,591	2,607,591
			Financial Year 2008-09	14,631,098	13,161,098
			Financial Year 2010-11	13,414,461	12,914,461
			Financial Year 2011-12	2,519,637	2,519,591
		Commercial Tax Officer, Goa	Financial Year 2011-12	1,624,835	1,624,835
		Commissioner of Appeals, UP	Financial Year 2011-12	136,171	136,171
		Commissioner of Appeals, UP	Financial Year 2012-13	340,365	340,365
Income Tax Act, 1961	Income Tax	Deputy Commissioner of Income Tax	Assessment Year 1998-99	6,768,009	6,768,009
			Assessment Year 2008-09	23,235,387	7,138,821
			Assessment Year 2009-10	46,407,820	46,407,820
Finance Act, 1994	Service Tax	Service Tax Tribunal, Mumbai	April & May 2006	6,988,858	6,988,858
		Service Tax Tribunal, Delhi	January, 2007 to December, 2007	1,413,354	530,008
		Service Tax Tribunal, Mumbai	January, 2008 to September, 2008	634,088	317,044
		Service Tax Tribunal, Mumbai	October, 2007 to September, 2008	6,391,956	4,793,967

Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable except for as given below:

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders, except as under:

(a) In case of defaults in the repayment of loans or borrowings to financial institutions, banks and government:

Particulars	Amount of default of repayment (Rs)		Period of default
	Principal	Interest
Dues to Banks:
The Saraswat Co-operative Bank Limited	2,873,383	874,349	1 to 73 days

(b) In case of defaults in the repayment of dues to the debenture holders:

Particulars	Amount of default of repayment (Rs)		Period of default
	Principal	Interest
Due to Debenture-holders
19.25% Non - Convertible Debentures	50,000,000	66,387,115	1 to 84 days

In our opinion and according to the information and explanations given to us, money raised by way of further public offer have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds and further the Company has not raised any term loan during the year.

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

(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)

Hemant M. Joshi Partner

(Membership No. 38019)

Pune, May 17, 2016

Vascon Engineers Limited

Mar 31, 2015

We have audited the accompanying standalone financial statements of VASCON ENGINEERS LIMITED ('the Company'), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

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

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

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

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

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

Opinion

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

Emphasis of Matters

We draw attention to the following matters in the Notes forming part to the financial statements:

(i) Note 46 to the financial statements which indicates that the Company has incurred cash losses during the year and previous year and there are delays in the payment of statutory dues and that 15% of the debenture amounts repayable during the year ending March 31, 2016 has not been maintained in one or more methods as prescribed under the Companies (Share Capital and Debentures) Rules 2014. However, the financial statements have been prepared on a going concern basis in view of the financial support from some of its shareholders and the future business / growth plans of the Company as further explained in the said note.

(ii) Note 48 to the financial statements regarding loan and advances amounting to Rs. 674 lakhs given to a subsidiary, which is continuously incurring losses. The realization of this advances is dependent upon recovery of further advances given by the subsidiary to the third party for which a claim is made by the subsidiary. The subsidiary is in the course of realization of above advances, hence in the opinion of the management they said advance from the subsidiary is fully recoverable.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory

Requirements

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

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

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

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

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

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

(e) The going concern matter described in sub-paragraph (i) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements Â Refer note 35 to the financial statements. ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE REFERRED TO THE

INDEPENDENT AUDITORS' REPORT

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

(i) In respect of its fixed assets:

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

b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories comprising of building material, components and spares, project under construction / development (work in progress) and stock of units in completed projects.

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

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us,the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

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

a) In the absence of stipulations, the regularity of the receipts of principal amounts and interest has not been commented upon.

b) There is no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year end.

(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 continuing failure to correct major weakness in such internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73 to 76or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

a) There were delays by the Company in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax,Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

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

Period to which Statute Nature of dues Amount (Rs.) the Amount Due Date Relates

Income Tax Act, 1961 Tax deducted at 44,376,963 April - August, 7th of every source (TDS) 2014 following month

Finance Act, 1994 Service Tax 79,344,086 Dec 13 to August 6th of every 2014 following month

Profe- ssion Tax Act, Profession Tax 494,324 April -August, 20th of every 1975 2014 following month

Employee Provident Provident Fund 7,908,153 April - August, 20th of every Fund Act, 1952 2014 following month

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

Name of Statute Nature of Forum where Dispute Period to which Amount Dues is Pending the Amount Involved Related (Rs.)

Sales Tax Act Sales Tax/ Deputy Commi- ssioner Financial Year 2,607,591 Value Added of Sales Tax 2005-06

Tax/ Central Financial Year 13,161,098 Sales Tax 2008-09

Financial Year 13,414,461 2010-11

Income Tax Act, 1961 Income Tax The Deputy Assessment Year Commissioner 1998 - 99 6,768,009 of Income Tax

Assessment Year 2008 Â 09 7,138,821

Assessment Year 2009 - 10 46,407,820

Finance Act, 1994 Service Tax Commissioner Appeals April & May 2006 Service Tax, Pune 6,988,858

Service Tax Tribunal, January 2007 to 530,008 Delhi December, 2007

Service Tax Tribunal, January 2008 to 317,044 Mumbai September, 2008

Service Tax Tribunal, October 2007 to 4,793,967 Mumbai December, 2008

d) There were no amounts that are due to be transferred to the Investor Education and Protection Fundin accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and Rules made there under.

(viii) The accumulated losses of the Company at the end of the financial year are less than fifty percent of its net worth and the Company has incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(ix) According to the information and explanation given to us, there were delays in repayment of due to bank and debenture holders (including during the year) as given below:

Amount of Default (Including Period of delay Â In the range Nature of Dues Interest) of no. of days

18.25% Non - Convertible 108,749,397 1 to 44 days Debentures

Term loans from banks 9,732,173 3 to 110 days

There were no delays in repayment of dues to financial institutions.

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

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

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

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm's Registration No. - 117366W / 100018)

Hemant M. Joshi

Partner

(Membership No. 038019)

Mumbai, May 12, 2015

Mar 31, 2014

1. We have audited the accompanying financial statements of Vascon Engineers Limited (the "Company"), which comprises the Balance Sheet as at 31st March, 2014 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, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial performance and cash flows of the company in accordance with the accounting standard notified under the Companies (Accounting Standards) Rules, 2006 as per sub-section (3C) of section 211 of the Companies Act, 1956 of India (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from financial misstatements, whether due to fraud or error.

Auditor''s Responsibility

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

We conducted our audit in accordance with the standards on Auditing issued by the Institute of Chartered Accountants of India. These 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 misstatements.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Inmaking those risks assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also include evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management as well as evaluating the overall presentation of the financial statements

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

Opinion

6 In our opinion, and to the best of our information and according to the explanation given to us the accompanying 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 and in accordance with the accounting standards referred to in section 211(3C) of the said Act:

a) In the case of the Balance Sheet , of the state of affairs of the company as at 31st March, 2014;

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

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

Report on Other Legal and Regulatory Requirements

7 As required by the Companies (Auditor''s Report) Order,2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the Order.

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

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

b. In our opinion, proper books of accounts as required by laws 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 dealt with by this report comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

ANNEXURE TO AUDITOR''S REPORT Referred to in paragraph 7 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the financial statements for the year ended 31st March, 2014 of Vascon Engineers Limited

1) a) The company is maintaining proper records showing full particulars of fixed assets.

b) According to the information and explanations given to us, majority of the fixed assets has been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets 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) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2) a) The company is engaged mainly in the real estate construction and development business. Substantial part of the stock of the company is in form of constructed units and construction work-in-progress. The said stock and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) As per the information and explanations given to us, the Company has maintained proper records of inventory and the discrepancies noticed on verification between the physical stock and book records were not material in relation to the operations of the Company.

3) a) The Company has granted loan to a Company listed in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 14,67,50,537/- and the yearend balance is Rs. 14,67,50,537/-.

b) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

c) According to the information and explanations given to us, the company has been regular in repayment of principal and interest, if any as demanded.

d) According to information and explanation given to us, there is no overdue amount for more than Rs. one lakh.

e) The Company has taken unsecured loan from a director covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 1,00,00,000/- and the year end balance of the loan was Rs. 1,00,00,000/-.

f) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

g) The loan taken from a party covered in the register maintained under section 301 of the act is considered repayable on demand. According to the information and explanations given to us, the company has been regular in repayment of principal and interest as demanded.

h) According to information and explanation given to us, there is no overdue amount for more than Rs. one lakh.

4) 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 inventories and fixed assets and for sale of goods/services.

5) a) According to the information and explanation given to us, we are of the opinion that the contracts/arrangements that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanation given to us the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the companies Act 1956, and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at a prices which are reasonable having regard to prevailing market prices at the relevant time.

6) In our opinion and according to the information and explanations given to us, in respect of the deposits accepted by the Company from the public, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 and Rules framed there under as may be applicable. According to the information and explanations given to us, no order has been passed by Company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

7) The Company has implemented an internal audit system, the scope and coverage of which, in our opinion, requires to be further enhanced to commensurate with the size of the Company and nature of its business.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the records.

9) a) According to the information and explanations given to us, there have been delays in depositing with appropriate authority undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Wealth-tax, Service Tax, Custom Duty, Cess and other statutory dues as may be applicable. Arrears of outstanding statutory dues for a period more than 6 months from the date they become payable is as under:

Sr Particulars Amount Period Due Date No.

1. P.F. 12,53,921 F. Y. 20th of every 2013-14 following month

2. Profession 1,27,266 F. Y. 20th of every Tax 2013-14 following month

3. TDS 2,08,32,703 F. Y, 7 of every 2013-14 following month

4. Service 12,111,973 F. Y, 6th of every Tax 2013-14 following month

b) There were no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Excise Duty that have not been deposited except in respect of the particulars given here under :

Sr. Tax Laws Forum where Financial Rupees No. dispute is Year/ IT pending (Assessment Year)

1 Service Central Excise 2004-05, 3,709,154 Tax Service Tax 2005-06 and Appellate 2006-07 Tribunal, New Delhi

2 Service Central Excise 2006-07 and 530,008 Tax Service Tax 2007-08 Appellate Tribunal, New Delhi

3 Service Central Excise 2007-08 and 317,044 Tax Service Tax 2008-09 Appellate Tribunal, Mumbai

4 Service Central Excise 2007-08 and 4,793,967 Tax Service Tax 2008-09 Appellate Tribunal, Mumbai

5 Service Commissioner of 2006-07 6,988,858 Tax Service Tax (Appeals) Pune III

7 Income ITAT 2009-10 4,64,07,820 Tax

8 Value Joint 2005-06 3,057,591 Added Tax Commissioner of (MAHARA sales tax SHTRA) (appeal-3), Bandra (E), Mumbai.

10) The Company does not have any accumulated losses at the end of the financial year. The Company has incurred cash losses in the financial year. The Company has also incurred cash loss in the immediately preceding financial year.

11) According to the information and explanation given to us, the Company has defaulted in repayment of dues to financial institution and banks. Details of default are as under:

Principal Interest Period of Nature of Dues Overdue Overdue Delay

Term Loans from banks 0 215,050 One month

12) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14) According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors'' Report) Order 2003 are not applicable.

15) According to the information and explanations given to us and considering the fact the guarantees are granted in respect of loans availed by two subsidiaries, two joint venture entities and an associate company, the terms and conditions of guarantee given by the Company for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

16) The Company has raised new term loans during the year. In our opinion and according to information and explanations given to us, on an overall basis, the term loans raised/applied during the year, prima facie, have been applied for the purposes for which they were raised.

17) According to the information and explanation given to us and overall examination of the financial statements we report that the no funds raised on short term basis have been used for long term investment.

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

19) According to the information and explanation given to us, the Company has created security in respect of assets owned by the Company and a subsidiary and personal guarantee of a director in respect of secured, non-convertible and non-transferable debentures issued by private placement in accordance with the terms of the issue of such debentures.

20) The Company has not made any issue of shares, debenture or any other securities to the public during the year under review. Therefore, there is no question of disclosure of end use or verification thereof.

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

For Anand Mehta & Associates

Chartered Accountants Firm Registration No. 127305W

Kulin V Mehta

Partner

Membership No. 38440

Mumbai : May 16, 2014

Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying fnancial statements of Vascon Engineers Limited(the "Company"), which Comprises the Balance Sheet as at 31st March,2013 and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information, which we have signed under reference to this report.

ManagementÂs Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial performance and cash fows of the company in accordance with the accounting referred to in sub-section (3C) of section 211 of the Companies Act, 1956 of India (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from fnancial misstatements, whether due to fraud and error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these fnancial 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. These Standards require that we comply with Ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatements.

4. An audit involves performing procedures to obtain the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risks assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the fnancial 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 reasonableness of the accounting estimates made by management as well as evaluating the overall presentation of the fnancial statements.

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

Opinion

6. In our opinion and to the best of our information and according to the explanation given to us, the accompanying fnancial 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 31st, 2013;

b) In the case of the Statement of Proft and Loss , loss for the year ended on that date; and

c) In case of the Cash Flow Statement, of the cash fows for the year ended on that date

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report)(Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure a statement on the matters specifed in paragraph 4 and 5 of the Order.

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

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

b. In our opinion, proper books of accounts as required by laws have been kept by the company so far as appears from our examination of those books.

c. The Balance Sheet, Statement of Proft 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 Proft 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 Act;

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

Referred to in paragraph 7 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the fnancial statements for the year ended 31st March, 2013 of Vascon Engineers Limited

1. a) The company is maintaining proper records showing full particulars of fxed assets.

b) According to the information and explanations given to us, a major portion of the fxed assets has been physically verifed by the management during the year. In our opinion, the frequency of verifcation of the fxed assets is reasonable having regards to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifcation.

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

2. a) The company is engaged mainly in the construction business.

Majority of the stock of the company are in form of developments/ work in progress. The stock in the said form and stock of other materials have been regularly verifed by the management during the year. In our opinion the frequency of verifcation is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) As per the information and explanations given to us, the Company has maintained proper records of inventory and the discrepancies noticed on verifcation between the physical stock and book records were not material in relation to the operations of the Company.

3. a) The Company has not granted any loans to Companies, frms, or other parties listed in the Register maintained under sec. 301 of the Companies Act, 1956 and hence the clause (b) to (d) of Paragraph 4(iii) of the Order are not applicable.

e) The Company has taken unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 97,62,000/- and the year end balance of the loan was Rs. 66,75,180/-.

f) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

g) The loan taken from a party covered in the register maintained under section 301 of the act is considered repayable on demand. According to the information and explanations given to us, the company has been regular in repayment of principal and interest as demanded.

h) According to information and explanation given to us, there is no overdue amount for more than Rs. One lakh.

4. 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 inventories and fxed assets and for sale of goods/ services.

5. a) According to the information and explanation given to us, we are of the opinion that the contracts/arrangements that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered. b) In our opinion and according to information and explanation given to us the company has not carried out transactions for the purchase of goods, materials and services and sales of goods, materials and services wherever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the companies Act 1956 and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year.

6. In our opinion and according to the information and explanations given to us, in respect of the deposits accepted by the Company from the public, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 and Rules framed there under as may be applicable. According to the information and explanations given to us, no order has been passed by Company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

7. The Company has implemented an internal audit system, the scope and coverage of which, in our opinion, requires to be further enhanced to be commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the records.

9. a) According to the information and explanations given to us, there have been delays in depositing with appropriate authority undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Wealth-tax, Service Tax, Custom Duty, Cess and other statutory dues as may be applicable. Arrears of outstanding statutory dues for a period more than 6 months from the date they become payable is as under:

Sr. No. Particulars Amount Period Due Date

7th of the every 1 TDS 14,890,356 F.Y. 2012-13 following month

5th of the every 2 Service Tax 18,901,616 F.Y. 2012-13 following month

b) There were no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Excise Duty that have not been deposited except in respect of the particulars given here under :

Sr. Tax Laws Forum where dispute Period Rupees No. is pending

F.Y 2004-05 Central Excise Service Tax 1 Service Tax F.Y 2005-06 3,709,154 Appellate Tribunal, New Delhi

F.Y 2006-07 Central Excise Service Tax F.Y 2006-07 2 Service Tax 530,008 Appellate Tribunal, New Delhi F.Y.2007-08

Central Excise Service Tax F.Y. 2007-08 3 Service Tax 317,044 Appellate Tribunal, Mumbai F.Y. 2008-09

Central Excise Service Tax F.Y. 2007-08

4 Service Tax 4,793,967 Appellate Tribunal, Mumbai F.Y. 2008-09

Commissioner of Service Tax 5 Service Tax F.Y.2006-07 6,988,858 (Appeals) Pune III

Commissioner of Service Tax F.Y.2005-06 6 Service Tax 543,750 (Appeals) Pune III F.Y.2006-07

Commissioner of Service Tax F.Y.2006-07 7 Service Tax 13,939,334 (Appeals) Pune III F.Y.2007-08

8 Income Tax ITAT F.Y.2007-08 71,38,821 Value Added Joint Commissioner of sales tax

9 Tax (MAHA- F.Y.2005-06 3,057,591 (appeal-3), Bandra (E), Mumbai. RASHTRA)

10. The Company does not have any accumulated losses at the end of the fnancial year. The Company has incurred cash losses in the fnancial year. The Company has not incurred cash loss in the immediately preceding fnancial year.

11. According to the information and explanation given to us, the Company has defaulted in repayment of dues to fnancial institution and banks. Details of default are as under:

Principal Interest Period of Nature of Dues Overdue Overdue Delay

Term Loans from 12,14,36,862 2,16,59,271 1-2 Months banks

12. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors'' Report) Order 2003 are not applicable.

15. According to the information and explanations given to us and considering the fact the guarantees are granted in respect of loans availed by two subsidiaries, two joint venture entities and one another company, the terms and conditions of guarantee given by the Company for loans taken by others from banks or fnancial institutions are not, prima facie, prejudicial to the interest of the Company.

16. The Company has raised new term loans during the year. In our opinion and according to information and explanations given to us, on an overall basis, the term loans raised/applied during the year, prima facie, have been applied for the purposes for which they were raised.

17. According to the information and explanation given to us and overall examination of the fnancial statements we are of the opinion that the company has not utilized the funds raised during the year on short term for long term purpose.

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

19. The Company has not issued any Debentures during the year. Hence, there is no question of creation of security in respect of the same.

20. The Company has not made any issue of shares, debentures or any other securities to the public during the year under review. Therefore, there is no question of disclosure of end use or verifcation thereof.

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

For Anand Mehta & Associates

Chartered Accountants

Firm Registration No. 127305W

Kulin V Mehta

Mumbai; 20th May, 2013 Partner

Membership No 38440

Mar 31, 2012

We have audited the attached Balance Sheet of the above company as at 31st March, 2012, and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended as on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from any material misstatements. An audit includes examining on test basis evidence supporting the amount of disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Sub Section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered appropriate and to the best of our knowledge and according to the information and explanations given to us during the course of the audit, we give below in the annexure a statement on the matter specified in paragraphs 4 and 5 of the said Order.

2 Further to our comments in the annexure referred to in paragraph 1 above:

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

b. In our opinion, proper books of accounts as required by the law have been kept by the Company so far as it appears from examination of such books.

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

d. In our opinion the Balance Sheet and Statement of Profit and Loss and Cash Flow Statement referred to in this report are in compliance with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the Directors is disqualified at the year-end from being appointed to act as 'Director' under Section 274(1)(g) of the Companies Act, 1956.

f In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Statement of Profit and Loss and Cash Flow Statement read together with the Notes thereon give the information required by the Companies Act, 1956 in the manner as required and give a true and fair view in conformity with the accounting principles generally accepted in India :

i. In the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 2012

ii. In the case of Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

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

ANNEXURE TO AUDITORS' REPORT

The annexure referred in our report to the Members of Vascon Engineers Limited for the year ended March 31, 2012

1.a) The Company is maintaining proper records showing full particulars of fixed assets.

b) According to the information and explanations given to us, a major portion of the fixed assets has been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets is reasonable having regards to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off substantial part of fixed assets which may affect the going concern status of the Company.

2.a) The Company is engaged mainly in the construction business. Majority of the stock of the Company are in form of developments/work in progress. The stock in the said form and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) As per the information and explanations given to us, the Company has maintained proper records of inventory and the discrepancies noticed on verification between the physical stock and book records were not material in relation to the operations of the Company.

3.The Company has not taken/given any loans from/to Companies, firms, or other parties listed in the Register maintained under Sec. 301 of the Companies Act, 1956 and hence the clauses (a) to (g) of Paragraph 4(iii) of the Order are not applicable.

4.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 sale of goods/services and for the purchase of fixed assets. However, the internal control system for purchases of inventory needs to be further improved. As informed to us, the management is taking necessary steps to correct the weakness reported in the Internal Control system.

5.a) According to the information and explanation given to us, we are of the opinion that the contracts/arrangements that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanation given to us, the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the Companies Act 1956, and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at prices which are reasonable having regard to prevailing market prices at the relevant time.

6.In our opinion and according to the information and explanations given to us, in respect of the deposits accepted by the Company from the public, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 and Rules framed there under as may be applicable. According to the information and explanations given to us, no order has been passed by Company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

7.The Company has implemented an internal audit system during the year, the scope and coverage of which, in our opinion, requires to be further enhanced to be commensurate with its size and nature of its business.

8.The Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the same. We have been informed that the cost statements are under preparation.

9.a) While the Company has been generally regular in depositing undisputed dues, with a delay of few days, relating to Employees' State Insurance, Profession Tax of various states, Value Added Tax of various states, Investor Education and Protection Fund and other material statutory dues applicable to it with the appropriate authorities, there were delays of three to five months in depositing undisputed dues in respect of Provident Fund, Tax Deducted at Source and Service Tax. There was no arrears of any statutory dues which were outstanding as at year end for a period of more than 6 months from the date they became payable during the year, (previous year - Advance Income Tax, short paid to the extent of Rs 12,06,955/-)

b) There were no disputed dues in respect of Income tax, Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty that have not been deposited except in respect of the particulars given here under:

Sr. Tax Laws Forum where dispute Period Cur. Yr. Prev. Yr. No. is pending

1 Service Tax Commissioner (Appeals) F.Y 2006-07 - 706,677 Chandigarh, Service tax F.Y.2007-08

2. Service Tax Central Excise Service Tax F.Y 2004-05 3,709,154 3,709,154 Appellate Tribunal, F.Y 2005-06 New Delhi F.Y 2006-07

3. Service Tax Commissioner (Appeals) F.Y 2006-07 - 524,493 Chandigarh, Service Tax

4. Service Tax Central Excise Service Tax F.Y.2007-08 634,088 - Appellate Tribunal, F.Y.2008-09 New Delhi

5. Service Tax Central Excise Service Tax F.Y.2007-08 1,597,989 - Appellate Tribunal, F.Y.2008-09 New Delhi

6. Income Tax Commissioner of Income F.Y 2008-09 21,676,901 18,606,210 Tax (Appeals) Mumbai, Maharashtra"

7. Income Tax Commissioner of Income F.Y. 2005-06 - 785,920 (TDS) Tax (Appeals) Thane, Maharashtra"

8. Income Tax Commissioner of Income F.Y. 2007-08 - 33,242,970 (TDS) Tax (Appeals) Thane, Maharashtra"

9. Income Tax Commissioner of Income F.Y. 2008-09 - 2,194,400 (TDS) Tax (Appeals) Thane, Maharashtra"

10. Value Added Joint Commissioner of F.Y.2007-08 993,422 - Tax Commercial Taxes (Karnataka) (Appeals), Belgaum, Karnataka

11. Value Added Joint Commissioner of F.Y.2006-07 386,718 - Tax Commercial Taxes (Karnataka) (Appeals), Belgaum, Karnataka

Note: As per the information & explanations given to us, the company is preferring an appeal in the following cases wherein the time lines for filing appeal have not expired:

Sr. Tax Laws Forum where dispute is Period Cur. Yr. Prev.Yr. No. to be filed

1 Service Tax Commissioner of Service F.Y.2005-06 543,750 - Tax (Appeals) Pune III F.Y.2006-07

2 Service Tax Commissioner of Service F.Y.2006-07 13,939,334 - Tax (Appeals) Pune III F.Y.2007-08

10. In our opinion, the Company is not having any accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit or the immediately preceding financial year.

11. In our opinion and according to information and explanations given to us, the Company has not defaulted in payment of dues to financial institutions and banks except in respect of payment of principal amount of Rs. 26,95,81,027 /- [previous year Rs Nil/-] and amount of interest on term loan amounting to Rs. 68,45,187/- [previous year Rs 84,38,778/-] which became due for payment on or before on 31st March, 2012, out of which Rs.125,946,985/- [including interest of Rs.68,14,926/- (previous year Rs.60,53,524)] was paid before the date of this Report and the balance amount of Rs.15,04,79,229/- [including interest of Rs.30,261/- (previous year Rs.23,85,353)] is still unpaid as of the date of signing of this report.

12. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments and hence clause 4(xiv) of the Companies (Auditors' Report) Order 2003 is not applicable.

15. According to the information and explanations given to us and considering the fact the guarantees are granted in respect of loans availed by three subsidiaries, two joint venture entities and one another company, the terms and conditions of guarantee given by the Company for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

16. The Company has raised new term loans during the year. In our opinion and according to information and explanations given to us, on an overall basis, the term loans raised/applied during the year, prima facie, have been applied for the purposes for which they were raised.

17. According to the information and explanation given to us and overall examination of the financial statements we are of the opinion that the Company has not utilized the funds raised during the year on short term for long term purpose.

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

19. The Company has not issued any Debentures during the year. Hence, there is no question of creation of security in respect of the same.

20. The Company has not made any issue of shares, debentures or any other securities to the public during the year under review and hence there is no question of disclosure of end use or verification thereof.

21. According to the information and explanations given by the management, It was detected that there was criminal breach of trust by some staff members at different levels including a Vice-President of the Company, together acting in concert against the interest of the Company over a period of five years at one of the sites where the Company's work is going on since the year 2007. The amount involved is estimated at Rs. 34,82,00,000/- (Rs. Nil) on account of the deviations being actual costs higher than budgeted costs. The matter is under investigation. The details of such fraud is given in Note No 46. Except for the above, no fraud on or by the Company has been noticed or reported during the year.

For Anand Mehta & Associates

Chartered Accountants

Firm Registration No. 127305W

Kusai Goawala

Mumbai Partner

Dated : May 21, 2012 M. No. 39062

Mar 31, 2010

We have audited the attached Balance Sheet of the above company as at 31st March, 2010, and also the Profit & Loss Account and the Cash flow Statement for the year ended as on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from any material misstatements. An audit includes examining on test basis evidence supporting the amount of disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Sub Section (4A) Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered appropriate and to the best of our knowledge and according to the information and explanations given to us during the course of the audit, we give below in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order.

2 Further to our comments in the annexure referred to in paragraph 1 above:

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

b. In our opinion, proper Books of Accounts as required by the law have been kept by the Company so far as it appears from examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred in this report are in agreement with the Books of Account.

d. In our opinion the Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in compliance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the directors of the Company and taken on record by the board of directors we report that none of the directors is disqualified at the year-end from being appointed to act as Director under Section 274(1)(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement read together with the notes thereon give the information required by the Companies Act, 1956 in the manner as required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of Balance Sheet, of the State of affairs of the company as at 31 st March, 2010.

ii. In the case of Profit and Loss Account, of the Profit of the company for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT The annexure referred in our report to the member of Vascon Engineers Limited for the year ended 31st March 2010

1 a) The company is maintaining proper records showing full particulars of fixed assets

b) As per the information and explanation given to us, the company has regular programme of physical verification of fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme certain fixed assets were physically verified by the management during the year and we are informed that no material discrepancies were noticed on such verification

c) During the Year, the Company has not disposed off substantial part of fixed assets which may affect the going concern status of the Company.

2 a) The company is engaged mainly in the construction business. Majority of the stock of the company are in form of developments/ work in progress. The stock in the said form and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) The inventories which are in the form of work-in-progress/development keep on changing as work progresses. Due to its very nature it is not comparable with any book records. Except this, discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of accounts.

3 a) The Company has not granted any loans to Companies, firms, or other parties listed in the Register maintained under sec. 301 of the Companies Act, 1956 and hence the clause (a) to (d) of Paragraph 4(iii) of the Order are not applicable.

b) The Company has taken loans from parties listed in Register maintained under section 301 of the Companies Act, 1956, the number of parties and the aggregate amount involved in the transaction during the year under review was as follows.

Cur. Yr. Prev. Yr. Cur. Yr. Prev.Yr.

No. of Parties 1 0 Amt. 15000000 0 Involved Rs

c) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

d) In respect of such loans taken by the Company, the company is regular in repayment of the principal amounts as stipulated and payment of interest where applicable.

4 a) In our opinion, the company has an adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed continuing failure to correct major weaknesses in internal control systems

5 a) According to the information and explanation given to us, we are of the opinion that the contracts/ arrangement that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanation given to us the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the companies Act 1956, and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at a prices which are reasonable having regard to prevailing market prices at the relevant time.

6 a) In our opinion and according to the information given to us, In respect of the Deposits accepted by the Company from the public the Company has complied with the provisions of section 58A and 58AA, and other relevant provisions of provisions of the companies Act, 1956 and rules framed there under as may be applicable . According to the information and explanation given to us, no order has been passed by company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business.

8 According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for any of ihe products of the company.

9 a) According to the information and explanations given to us, the Company was generally regular except in few cases for delay of few days in depositing with appropriate authority undisputed statutory dues in respect of Provident fund, Investor Education and protection fund, Employees state Insurance, Wealth tax, service tax, cess and other statutory dues as may be applicable. There was no arrears of any statutory dues which were outstanding as at year end for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there was no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Service Tax, Excise Duty except in respect of the particulars given here under:

St Tax Laws Forum where dispute Period Cur.Yr. Prev.Yr. pending

1 Service Tax Commissioner .

(Appeal) Chandigarh Service tax F.Y 2005-07 706677 1413354

2 ServiceTax ServiceTax

Appellate Tribunal

Delhi F.Y 2004-06 3709154 8010864

3 ServiceTax Service tax

Appellate Tribunal

Delhi F.Y 2006-07 524493 0

10 In our opinion, the company is not having any accumulated losses. The company has not incurred cash losses during the financial year covered by our audit or the immediately preceding financial year.

11 According to the explanation and information given to us, the Company has not defaulted in payment of dues to financial institutions and banks.

12 According to the explanation and information given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14 According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments and hence clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable.

15 According to the information and explanation given to us, the terms and conditions of guarantee given by the Company for loans taken by others from bank or financial institutions are not prejudicial to the interest of the Company.

16 The funds raised by the Company by way of term loans availed from Bank has been applied for the purpose for which the same has been availed except in case of a loan of Rs 30 crores an amount of Rs 4.91 crores only has been utilised for the purpose for which the loan was availed.

17 According to the information and explanation given to us and overall examination of the financial statements we are of the opinion that the company has not utilized the funds raised during the year on short term for long term purpose.

18 According to the explanation and information given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year. However the unsecured convertible debentures have been converted to equity during the year hence there is no question of creation of security in respect of the same.

20 We have verified the end use of money raised by public issue as disclosed by the management in the notes to the financial statements.

21 During the Course of examination of books of accounts carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period nor have we been informed of any such case by the management

For Anand Mehta & Associates

Chartered Accountants

Kusai Goawala Partner M. No. 39062 Firm Registration No: 127305W MUMBAI : DATED May 10, 2010

Mar 31, 2009

1. We have audited the attached Balance Sheet of the above company as at 31st March, 2009, and also the Profit & Loss Account and the Cash flow Statement for the year ended as on that date annexed thereto. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from any material misstatements. An audit includes examining on test basis evidence supporting the amount of disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Sec. 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered appropriate and to the best of our knowledge and according to the information and explanations given to us during the course of the audit, we give below in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order to the extent applicable to the company.

4. Further to our comments in the annexure referred to in paragraph 1 above:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary forthe purpose of ouraudit.

b. In ouropinion, proper Books of Accounts as required by the law have been kept by the Company so far as it appears from examination of such books.

c. The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred in this report are in agreement with the Books of Account.

d. In our opinion the Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in compliance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the directors of the Company and taken on record by the board of directors we report that none of the directors is disqualified at the year-end from being appointed to act as Director under Section 274 (1) (g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement read together with the notes thereon give the information required by the Companies Act, 1956 in the manner as required and give a true and fair view in conformity with the accounting principles generally accepted in India

I. In so far as it relates to the Balance Sheet, of the State of affairs of the company as at 31 st March, 2009

II. In so as it relates to the Profit and Loss Account, of the Profit of the company for the year ended on that date; and

III. In so as it relates to the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

Annexure referred to in Paragraph 3 of the Auditors report to the share holders of VASCON ENGINEERS LIMITED,on the accountsfortheyearended31stMarch,2009.

1) a) The company is maintaining proper records showing full particulars of fixed assets.

b) As per the information and explanation to us , the fixed assets have been physically verified by the management at regular intervals, having regard to the size of the company and nature of its assets. No material discrepancies between the book records and physical inventory were noticed.

c) During the Year, the Company has not disposed off substantial part of fixed assets which may not affect the going concern status of the Company.

2)

a) The company is engaged mainly in the construction business. Majority of the stock of the company are in form of developments/ work in progress. The stock in the said form and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) The inventories which are in the form of work-in-progress/development keep on changing as work progresses. Due to its very nature it is not comparable with any book records. Except this, discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of accounts.

3)

a) The Company has not granted any loans to Companies, firms, or other parties listed in the Register maintained under sec. 301 of the Companies Act, 1956 and hence the clause (a) to (d) of Paragraph 4(iii) of the Order are not applicable.

b) The Company has taken loans from parties listed in Register maintained under section 301 of the Companies Act, 1956, the number of parties and the aggregate amount involved in the transaction during the year under review was as follows.

Cur.Yr. Prev.Yr. Cur.Yr. Prev.Yr.

No. of Parties. 0 1 Amt. Invo -lved Rs.. 0 10,000,000

c) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

d) In respect of such loans taken by the Company, the company is regular in repayment of the principal amounts as stipulated and payment of interest where applicable.

4)

a) In our opinion, the company has an adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed continuing failure to correct major weaknesses in internal control systems.

5)

a) According to the information and explanation given to us, we are of the opinion that the contracts/ arrangement that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanation given to us the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the companies Act 1956, and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at a prices which are reasonable having regrard to prevailing market prices at the relevant time.

6)

a) In our opinion and according to the information given to us, In respect of the Deposits accepted by the Company from the public and in that regard the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58Aand 58AAand any other relevant provisions of the comapnies Act 1956 and rules framed there under as may be applicable. According to the information and explanation given to us, no order has been passed by company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

7)

a) In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business.

8)

a) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 for any of the products of the company.

9)

a) According to the information and explanations given to us, the Company was generally regular in depositing with appropriate authority undisputed statutory dues in respect of Provident fund, Investor Education and protection fund, Employees state Insurance, Wealth tax, service tax, cess and other statutory dues as may be applicable. There was no arrears of any statutory dues which were outstanding as at year end for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there was no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Service Tax, Excise Duty except in respect of the particulars given here under:

Sr. Tax Laws Forum where dispute is pending Cur.Yr. Prev.Yr.

1 Service Tax Commissioner (Appeal) Chandigarh Service tax 1,413,354 Nil

2 Service Tax Service tax appellate tribunal Delhi 8,010,864 Nil

10)

a) In our opinion, the company is not having any accumulated losses. The company has not incurred cash losses during the financial year covered by our audit or the immediately preceding financial year.

11)

a) According to the explanation and information given to us, the Company has not defaulted in payment of dues to financial institutions and banks. The Company has issued convertible debentures, hence there is no question of repayment of the same.

12)

a) According to the explanation and information given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13)

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

14)

a) According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments and hence clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable.

15)

a) According to the information and explanation given to us, the terms and conditions of guarantee given by the Company for loans taken by others from bankorfinancial institutions, are not prejudicial to the interest of the Company.

16)

a) According to the information and explanation given to us, the funds raised by the Company by way of term loans availed from Bank and/or financial institutions have been applied for the purpose for which the same has been availed except in case of loan of Rs 40 crores an amount of RS 6.70 crores not required immediately for the purpose for which it is disbursed have been temporarily parked with othercompany.

17)

a) According to the information and explanation given to us and overall examination of the financial statements we are of the opinion that the company has not utilized the funds raised during the year on short term for long term purpose.

18)

a) According to the explanation and information given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19)

a) According to the explanation and information given to us, the Company has issued unsecured debentures, and hence there is no question of creating any security against the same.

20)

a) The Company has not made any issue of shares, debentures or any other securities to the public during the year under reviewand hence there is no question of disclosure of end use or verification thereof.

21)

a) During the Course of examination of books of accounts carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period nor have we been informed of any such case by the management.

For AnandMehta&Associates

Chartered Accountants

KUSAIGOAWALA

Partner

MEMBERSHIP NO. 39062

MUMBAI: DATED-23rd June, 2009

Mar 31, 2008

We have audited the attached Balance Sheet of the above company as at 31st March, 2008, and also the Profit & Loss Account and the Cash flow Statement for the year ended as on that date annexed thereto. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from any material misstatements. An audit includes examining on test basis evidence supporting the amount of disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Sec. 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered appropriate and to the best of our knowledge and according to the information and explanations given to us during the course of the audit, we give below in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order to the extent applicable to the company.

2 Further to our comments in the annexure referred to in paragraph 1 above:

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

b. In our opinion, proper Books of Accounts as required by the law have been kept by the Company so far as it appears from examination of such books.

c. The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred in this report are in agreement with the Books of Account.

d. In our opinion the Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in compliance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the directors of the company and taken on record by the board of directors we report that none of the directors is disqualified at the year-end from being appointed to act as ÃDirectorÃ under Section 274 (1) (g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement read together with the notes thereon give the information required by the Companies Act, 1956 in the manner as required and give a true and fair view in conformity with the accounting principles generally accepted in India.

I. In so far as it relates to the Balance Sheet, of the State of affairs of the company as on 31st March, 2008

II. In so as it relates to the Profit and Loss Account, of the Profit of the company for the year ended on that date; and

III. In so as it relates to the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

Annexure referred to in Paragraph 3 of the Auditors report to the share holders of the Vascon Engineers Ltd., on the accounts for the year ended 31st March 2008.

I) a) The company is maintaining proper records showing full particulars, including the quantitative details and situation of fixed assets.

b) In our opinion, the fixed assets have been physically verified by the management at regular intervals, having regard to the size of the company and nature of its assets. No material discrepancies between the book records and physical inventory were notice

c) During the Year , the company has not disposed off substantial part of fixed assets which may affect the going concern status of the company.

II) a) The company is engaged mainly in the construction business. Majority of the stock of the company are in form of developments/ work-in- progress. The stock in the said form and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) The inventories which are in the form of work-in-progress/development keep on changing as work progresses. Due to its very nature it is not comparable with any book records. except this, discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of accounts.

III) a) The company has granted loans to parties listed in Register maintained under section 301 of the Companies Act, 1956, the number of parties and the aggregate amount involved in the transaction during the year under review was as follows.

Cur. Yr. Prev. Yr. Cur. Yr. Prev.Yr.

No. of Parties - 4 Amt. Involved Rs. - 72,427,231

b) The rate of Interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the company.

c) In respect of such loans given by the company, the parties are regular in repayment of the principal amounts as stipulated and payment of interest where applicable.

d) According to the explanation and information given to us, no amount of principal and interest in excess of Rs.1 lac is overdue for repayment.

e) The company has taken loans from parties listed in Register maintained under section 301 of the Companies Act, 1956, the number of parties and the aggregate amount involved in the transaction during the year under review was as follows.

Cur. Yr. Prev. Yr. Cur. Yr. Prev.Yr.

No. of Parties 2 4 Amt. Invo -lved Rs. 1,010,000,000 13,970,000

f) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the company.

g) In respect of such loans taken by the company, the company is regular in repayment of the principal amounts as stipulated and payment of interest where applicable.

IV)

a) In our opinion, the company has an adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed continuing failure to correct major weaknesses in internal control systems.

V)

a) According to the information and explanation given to us, we are of the opinion that the contracts/ arrangement that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanation given to us the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the Companies Act 1956 and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at reasonable prices, having regard to prevailing market prices at the relevant time.

VI)

The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India or the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are applicable. According to the information and explanation given to us, no order has been passed by Company Law Board or the National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

VII)

In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business.

VIII)

According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products of the company.

IX)

a) According to the information and explanations given to us, the company was regular in depositing with appropriate authority undisputed statutory dues in respect of Provident fund, Investor Education and protection fund, EmployeeÃs state Insurance, Wealth tax , Service tax , Custom duty, Excise duty, Cess and other statutory dues as may be applicable. There was no arrears of any statutory dues which were outstanding as on 31st March, 2008 for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there was no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Service Tax, Excise Duty except in respect of the particulars given here under :

Sr. Tax Laws Forum where dispute is pending Cur. Yr. Prev.Yr.

1 Income tax Income tax Appellate Tribunal 0.00 6768000.00

X) a) In our opinion, the company is not having any accumulated losses. The company has not incurred cash losses during the financial year covered by our audit or the immediately preceding financial year.

XI) I)

a)According to the explanation and information given to us, the company has not defaulted in payment of dues to financial institutions and banks.

The Company has not issued any debentures and hence there is no question of default in respect of repayment of the same.

XII)

a) According to the explanation and information given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII)

a) In our opinion the company is not a Chit fund or niche or mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (AuditorÃs Report) Order 2003 are not applicable.

XIV

a) According to explanation and information given to us, the company is neither dealing nor trading in shares, securities, debentures and other investments, except to the extent of acquisition of shares incidental for acquisition of property and hence clause 4(xiv) of the Companies (AuditorsÃ Report) Order 2003 is not applicable.

XV

a) According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

XVI

a) According to the information and explanation given to us, the funds raised by the company by way of term loans availed from Bank and/or financial institutions have been applied for the purpose for which the same has been availed.

XVII

a) According to the information and explanation given to us and overall examination of the financial statements we are of the opinion that the company has not utilized the funds raised during the year on short term for long term purpose.

XVIII

a) According to the explanation and information given to us, the company has not made any preferential allotment of shares, except shares allotted under ESOS Scheme , made by the company during the year to the parties and/or companies covered in the Register maintained under section 301 of the Companies Act, 1956. Such shares allotted under ESOS Scheme is not considered as prejudicial to the interest as the same are allotted pursuant to the Scheme prepared as per the guidelines prescribed by ICAI and duly approved by the shareholders of the Company.

XIX

a) The company has not issued any debentures and hence there is no question of creation of security in respect of the same.

XX

a) The company has not made any issue of shares, debentures or any other securities to the public during the year under review and hence there is no question of disclosure of end use or verification thereof.

XXI

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

For Anand Mehta & Associates CHARTERED ACCOUNTANTS

KUSAI GOAWALA

partner

MEMBERSHIP NO. 39062

MUMBAI : Dated 23rd May, 2008

Mar 31, 2007

We have audited the attached Balance Sheet of Vascon Engineers Limited as at 31st March, 2007 and also the Profit & Loss Account and the Cash Flow Statement for the year ended as on that date annexed thereto. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from any material misstatements. An audit includes examining on test basis evidence supporting the amount of disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered appropriate and to the best of our knowledge and according to the information and explanations given to us during the course of the audit, we give below in the annexure a statement on the matter specified in paragraphs 4 and 5 of the said order to the extent applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph 1 above

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

b. In our opinion, proper Books of Accounts as required by the law have been kept by the Company so far as it appears from examination of such book.

c. The Balance Sheet and Profit and LossAccount and Cash Flow Statement referred in this report are in agreement with the Books of Account.

d. In our opinion the Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in compliance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the directors of the Company and taken on record by the Board of Directors we report that none of the directors is disqualified at the year-end from being appointed to act as ÃDirectorÃ under Section 274 (1) (g) of the Companies Act, 1956

f. In our opinion and to the best of our information and according to the explanations given to us and subject to our reliance, because it is a technical matter, on certification by Managing Director in respect of the basis (technical estimation) of valuation of unbilled revenue and development at various work sites, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement read together with the notes thereon give the information required by the Companies Act, 1956 in the manner as required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i. In so far as it relates to the Balance Sheet, of the state of affairs of the company as at 31st March, 2007;

ii. In so as it relates to the Profit and Loss Account, of the profit of the company for the year ended on that date; and

iii. In so as it relates to the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

Annexure referred to in paragraph 1 of the Auditors Report to the share holders, on the accounts for the year ended, 31st March, 2007.

I)

a) The company is maintaining proper records showing full particulars, including the quantitative details and situation of fixed assets.

b) In our opinion, the fixed assets have been physically verified by the management at regular intervals, having regard to the size of the company and nature of its assets. No material discrepancies between the book records and physical inventory were noticed.

c) During the year, the Company has not disposed off substantial part of fixed assets which may affect the going concern status of the Company.

II) The company is engaged mainly in the construction business. Majority of the stock of the company are in the form of developments/ work-in-progress. The stock in the said form and stock of other materials have been regularly verified by the management during the year. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) The inventories which are in the form of work-in- progress/development keep on changing as work progresses. Due to its very nature it is not comparable with any book records. Except this, discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of accounts.

III)

a) The Company has granted loans to parties listed in Register maintained under section 301 of the Companies Act, 1956. The number of parties and the aggregate amount involved in the transaction during the year under review was as follows:

March 2007 March 2006

No. of Parties 4 4

Amt. Involved (Rs.) 72,427,231 139,239,826

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

c) In respect of such loans given by the Company, the parties are regular in repayment of the principal amounts as stipulated and payment of interest, where applicable.

d) According to the explanations and information given to us, no amount of principal and interest, in excess of Rs. 1 lac is overdue for repayment.

e) The Company has taken loans from parties listed in Register maintained under section 301 of the Companies Act, 1956, the number of parties and the aggregate amount involved in the transaction during the year under review was as follows:

March 2007 March 2006

No. of Parties 4 3

Amt. Involved (Rs.) 13,970,000 17,769,511

f) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

g) In respect of such loans taken by the Company, the company is regular in repayment of the principal amounts as stipulated and payment of interest, where applicable.

IV)

a) In our opinion, the company has an adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed continuing failure to correct major weaknesses in internal control systems.

V)

a) According to the information and explanations given to us, we are of the opinion that the contracts/ arrangement that need to be entered into a register maintained in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to information and explanations given to us the transactions for the purchase of goods, materials and services and sales of goods, materials and services where-ever made in pursuance of contracts or arrangement entered in register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each such party during the year were at reasonable prices, having regard to prevailing market prices at the relevant time.

VI)

The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India or the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under as applicable. According to the information and explanation given to us, no order has been passed by Company Law Board or National Company Law Tribunal or any Court or any other Tribunal in regard to the above provisions.

VII)

In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business.

VIII)

According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products of the company.

IX)

a) According to the information and explanations given to us, the Company was regular in depositing with appropriate authority, undisputed statutory dues in respect of Provident fund, Investor Education and Protection Fund, EmployeeÃs State Insurance, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues as may be applicable. There were no arrears of any statutory dues which were outstanding as on 31st March 2007 for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there was no disputed dues in respect of Income tax, Sales tax, Custom duty, Wealth tax, Service tax, Excise duty except in respect of the particulars given here under

Sr. Tax Laws Forum where March 2007 March 2006 dispute is pending Rs. Rs.

1 Income tax Income tax

Appellate Tribunal 6,768,000 6,768,000

X) a) In our opinion, the Company does not have any accumulated losses. The company has not incurred cash losses during the financial year covered by our audit or the immediately preceding financial year.

XI)

a) According to the explanations and information given to us, the Company has not defaulted in payment of dues to financial institutions and banks. The Company has not issued any debentures and hence there is no question of default in respect of repayment of the same.

XII)

a) According to the explanation and information given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII)

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

XIV)

a) According to explanation and information given to us, the Company is neither dealing nor trading in shares, securities, debentures and other investments, except to the extent of acquisition of shares incidental for acquisition of property and hence clause 4(xiv) of the Companies (AuditorsÃ Report) Order, 2003 is not applicable.

XV)

a) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI)

a) According to the information and explanation given to us, the funds raised by the Company by way of term loans availed from banks and/or financial institutions have been applied for the purpose for which the same have been availed.

XVII)

a) According to the information and explanation given to us and overall examination of the financial statements we are of the opinion that the company has not utilized the funds raised during the year on short term for long term purpose.

XVIII)

a) According to the explanation and information given to us, the Company has not made any preferential allotment of shares during the period to the parties and/or companies covered in the Register maintained under section 301 of the Companies Act, 1956.

XIX)

a) The Company has not issued any debentures and hence there is no question of creation of security in respect of the same.

XX)

a) The Company has not made any issue of shares, debentures or any other securities to the public during the year under review and hence there is no question of disclosure of end use or verification thereof.

XXI)

a) According to the explanation and information given to us, no fraud, on or by the Company, has been noticed or reported during the course of our audit.

For Anand Mehta & Associates Chartered Accountants Kulin V. Mehta Partner

Membership No. 38440

Mumbai, May 9, 2007

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