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Auditor Report of IVRCL Ltd.

Mar 31, 2018

1. Corporate Insolvency Proceedings as per Insolvency and Bankruptcy Code, 2016 (IBC)

The Hon''ble National Company Law Tribunal, Hyderabad Bench ("NCLT") admitted an insolvency and bankruptcy petition filed by a financial creditor against IVRCL Limited ("the Company") and appointed Mr. Sutanu Sinha to act as Interim Resolution Professional (IRP) with direction to initiate appropriate action contemplated with extent provisions of the Insolvency and Bankruptcy Code, 2016 and other related rules.

2. Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of IVRCL Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information for the year then ended in which are incorporated the unaudited branch returns for the year ended on that date of the Company''s branch at Kingdom of Saudi Arabia (''the branch'').

3. Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder. 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. Pursuant to ongoing Corporate Insolvency Resolution Process (CIRP) powers of the board of Directors have been suspended and these Powers are now vested with Resolution Professional (RP).

4. 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 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 standalone financial statements are free from material misstatement.

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

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

5. Basis for Qualified Opinion

We refer to following notes to standalone financial statements:

a. Note 38 to the standalone financial statements, in respect of preparation of financial statements of the Company on going concern basis for the reasons stated therein and expiry of timeline to complete the process of CDR/ SDR. During the year the Company has incurred a Net Loss of Rs. 19,910.93 million resulting into accumulated losses of Rs. 41,762.43 million and erosion of its Net worth as at March 31, 2018. The Company has obligations towards fund based borrowings aggregating to Rs. 77,577.28 million and nonfund based exposure aggregating to Rs. 12,831.73 million, operational creditors and statutory dues, subject to reconciliation/verification as stated in Note 43, that have been demanded/recalled by the financial/operating creditors pursuant to ongoing Corporate Insolvency Resolution Process (CIRP). These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as going concern and therefore the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. The ultimate outcome of these matters is at present not ascertainable. Accordingly, we are unable to comment on the consequential impact, if any, on the accompanying standalone financial statements.

b. Note 39 to the standalone financial statements, in respect of recognition of deferred tax assets on account of carried forward unused tax losses and other taxable temporary differences aggregating to '' 9,570.59 million. Based on unexecuted orders on hand, the Management of the Company is confident that sufficient future taxable income will be available against which such deferred tax assets will be realized. However, in our opinion, in absence of convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized, such recognition is not in accordance with Indian Accounting Standard 12 "Income Taxes" (Ind AS 12). Had the aforesaid deferred tax assets not been recognised, loss after tax for the year ended on March 31, 2018 would have been higher by Rs.9,570.59 million and other equity would have been lower by Rs.9,570.59 million.

c. Note 40 to the standalone financial statements, in connection with the existence of material uncertainties over the realisability of bank guarantees encashed by customers, unbilled revenue, trade receivables and withheld amount aggregating to Rs.19,682.35 million included in financial and other assets which are past due/ subject matters of various disputes /arbitration proceedings/ negotiations with the customers and contractors due to termination / foreclosure of contracts and other disputes. The management is yet to assess the change in risk of default and resultant expected credit loss allowance on such assets. Had the aforesaid assets been provided for impairment, loss after tax for the year ended on March 31, 2018 would have been higher by Rs.19,682.35 million, other equity would have been lower by Rs.19,682.35 million.

d. Note 41 to the standalone financial statements, in respect of investment of Rs.12,063.29 million in subsidiaries engaged in BOT and other projects, which are under disputes with the concessionaire, and other subsidiaries that have significant accumulated losses as at March 31, 2018. In absence of fair valuation of these Investments, we are unable to comment upon the carrying value these investments and the consequential impact, if any, on the accompanying standalone financial statements.

e. Note 42 to the standalone financial statements, in respect of loans and advances of Rs.7,142.20 million given to subsidiary Companies, associate, net receivable against development rights, various sub-contractors, vendors and other parties. These advances, having regard to financial position of such subsidiary companies and age of such advances, in our opinion, are doubtful of recovery. The management is yet to assess the change in risk of default and resultant expected credit loss allowance on such loans and advances. Had the aforesaid assets been provided for impairment, loss after tax for the year ended on March 31, 2018 would have been higher by Rs. 7,142.20 million, other equity would have been lower by Rs.7,142.20 million.

f. Note 38 and 43 to the standalone financial statements, in respect of various claims, submitted by the financial creditors (including claims towards fund based and non-fund based exposure and claims on behalf of subsidiary companies and other parties) , operational creditors, workmen or employee and authorized representative of workmen and employees of the Company to Resolution Professional pursuant to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation 2016, that are currently under consideration/reconciliation. Pending reconciliation/admission of such claims by the RP, we are unable to comment on the consequential impact, if any, on the accompanying statement;

g. Note 44 to the standalone financial statements, in respect of non-availability of confirmations of bank balances aggregating to Rs.24.84 million, trade receivables including retention, advances, trade payable. In absence of alternative corroborative evidence, we unable to comment on the extent to which such balances are recoverable.

h. Note 45 to the standalone financial statements, in respect of non-availability of physical verification reports of fixed assets and inventories aggregating to Rs. 210.35 million as at March 31, 2018 and no provision for impairment has been made for the reasons stated therein. In absence of any alternative corroborative evidence, we are unable to comment on the recoverability of the same.

i. Note 46 to the standalone financial statements, in respect of balances available with statutory authorities and input credits aggregating to '' 2,003.47 million that are subject to reconciliation, filing of return and admission by the respective statutory authorities and no provision has been made thus, we are unable to comment whether any provision for impairment in the value of advances is required.

j. Note 23 to the standalone financial statement, in respect of periods of default in repayment of borrowing and interest have not been provided to compliance the minimum presentation and disclosure requirement as per the schedule III of the Companies Act, 2013.

6. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in para 5(b), 5(c), 5(e) {i.e. Had our observation been considered the net loss for the period would have been Rs.56,307.27 million, Net worth as at March 31, 2018 would have been Rs. (55,012.49) million and Earning per share for the period would have been Rs. (71.92)} and possible effects of matters described in para 5(a), 5(d), 5(f), 5(g), 5(h), 5(i) & 5(j) in the basis for qualified opinion, 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, 2018, and its losses ( including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

7. Emphasis of matters

Attention is invited to:

a. Note 47 to the standalone financial statements, in respect of notice received by the company U/s 276 (B) of the Income tax Act, 1961 and by certain banks and customers of the company U/s 226(3) of the Income Tax Act, 1961 regarding failure to deposit the tax deducted at source for the financial year 2016-17 and 2017-18 aggregating to Rs.292.52 million.

b. Note 48 to the standalone financial statements, in respect of summon received by the company of levy of damages U/s 14 B of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 aggregating to Rs.61.27 million for the period from 10/1999 to 02/2009 and 07/2009 to 03/2015 and the matter is presently sub-judice.

8. Other Matters

a. We did not audit the separate financial statements of 28 joint ventures included in standalone financial statements, whose financial results reflects company''s share in net profit of joint venture aggregating to Rs.20.59 million for the year ended March 31, 2018. Out of the 28 joint ventures, financial information/statements of 5 joint ventures, have been presented solely based on the information compiled by the management.

In our opinion and according to the information and explanations given to us by the Management, these financial statements /financials information, in aggregate, are not material to the Company and have not been subjected to audit hence, we are unable to comment on the consequential impact, if any, on the accompanying statements.

b. We did not audit the financial statements/ information of a branch at Kingdom of Saudi Arabia included in the Standalone financial statements of the company whose financial statements/financial information reflects total assets of '' 0.01 Million as at March 31, 2018 and total revenue is NIL for the year ended on that date as considered in standalone financial statements.

Our opinion is not qualified in respect of these matters

9. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), as amended, issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a. We have sought and except for the effects/possible effects of the matters described under "Basis for qualified opinion" paragraph, 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. Except for the effects/possible effects of matters described in the "Basis for qualified opinion" paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and unaudited accounts/returns adequate for the purpose of our audit have been received from the branch not visited by us.

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account and the unaudited accounts/returns of the branches not visited by us.

d. in our opinion, except for the effects/ possible effects of the matters described in the "Basis for qualified opinion" paragraph, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.

e. The matters described under "Basis for Qualified Opinion" and "Emphasis of Matters" paragraph, in our opinion, may have an adverse effect on the functioning of the Company;

f. In the term of section 17 (1) (b) of the Insolvency and Bankruptcy Code, 2016 ("the Code"), the powers of the board of directors have been suspended and be exercised by the interim resolution professional. Hence, written representation from directors have not been taken on record by the Board of Directors. Accordingly, we are unable to comment whether none of the director is disqualified as on March 31, 2018 from being appointed as a director in the terms of Section 164 (2) of the Act.

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

h. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Company''s internal financial control over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position to the extent ascertained, in its standalone financial statements (Refer note 35);

ii. Except for the effects/possible effects of matters described under basis of qualified opinion paragraph, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts. The Company did not have any derivative contracts;

iii. There has been no delay in transferring the amounts that were due to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018;

"Annexure A" to the Independent Auditors'' Report

Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date to the standalone financial statements of the Company for the year ended March 31, 2018:

i. (a) Subject to our comments in para i (b) below, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) Except for certain locations (including locations where physical access to the fixed assets is restricted by the contractee/clients), the fixed Assets were physically verified during the year by the Management in accordance with a regular program of verification. Further, wherever physical verification of fixed assets was performed, the management is in process of reconciliation of quantities as per verification reports with fixed assets records. Pending such reconciliation and physical verification of certain locations, we are unable to comment on the reasonableness of the physical verification program and discrepancies that may arise on such reconciliation and physical verification of fixed assets that are lying on those locations where physical verification could not be performed.

(c) According to the information and explanation given to us, title deeds of the immovable properties have been mortgaged as security with lenders i.e. banks, financial institutions and others for security of the borrowings raised by the Company. On the basis of our examination of the records of the Company and the copies of the title deeds available with the Company, the title deeds of immovable properties are held in the name of the Company except for the details given in Appendix -1;

ii According to the information and explanations given to us, Except for certain locations (including locations where physical access to the fixed assets is restricted by the contractee/clients), the management has conducted physical verification of inventory at reasonable intervals during the year. We are unable to comment on the discrepancies that may arise on the physical verification of inventories that are lying on those locations where physical verification could not be performed.

iii The company has granted interest free unsecured loans to Companies covered in the register maintained under section 189 of the Act, in respect of such loans;

(a) In our opinion, the terms and conditions of the loans granted by the Company to 8 subsidiaries, aggregating to Rs. 6,113.32 million as at March 31,2018, having regard to the cost of funds to the company, are prejudicial to the interest of the company.

(b) In respect of one company the schedule of repayment of the principal amount aggregating to Rs. 537.60 million has been stipulated and the repayment commences in the year 2026 27. In case of interest free unsecured loan to 7 companies aggregating to Rs. 5,575.72 million, the schedule of repayment is not stipulated and considered by the Company as repayable on demand, hence, we are unable to comment as to whether repayments are regular.

(c) In case of interest free unsecured loan to one company aggregating to Rs. 537.60 million, no amount is overdue. In case of interest free unsecured loan to 7 companies aggregating to Rs. 5,575.72 million, the schedule of repayment is not stipulated and considered by the Company as repayable on demand, we are unable to comment whether any amount is overdue and whether reasonable steps have been taken by the company for recovery of the principal.

iv According to information and explanation given to us and having regard to the legal opinion obtained by the company in an earlier year that the company being a company engaged in the business of providing infrastructure facilities in terms of Section 186, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013, in respect of grant of loans, making investments and providing guarantees and security as applicable.

v According to the information and explanations given to us, the Company has not accepted any deposits during the year within the meaning of Sections 73 to 76 of the Companies Act, 2013, and the rules framed there under to the extent notified.

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

vii (a) According to information and explanations given to us and records of the Company examined by us, the Company has not been regular in depositing undisputed statutory dues in respect of provident fund, employee''s state insurance, income-tax, sales tax, service tax, duty of excise, value added tax and cess and any other statutory dues with the appropriate authorities. There have been significant delays in a large number of cases in depositing these dues with the appropriate authorities. Further, no undisputed amounts payable in respect of these statutory dues were outstanding as on March 31,2018 for a period of more than six months from the date they became payable except as given in Appendix -2 to this report.

(b) According to the information and explanations given to us and records of the Company examined by us, particulars of dues outstanding in respect of income tax, sales tax, service tax, duty of excise and value added tax which have not been deposited on account of any dispute are given in Appendix-3 to this report.

viii As matters described in Note 36 and 37 to the financial statement and pursuance of repayment schedule stipulated in the sanction letter, the entire amount of borrowing including interest are overdue and continuing default as on March 31, 2018, therefore, we are unable to provided periods of default. Details of defaults in repayment of borrowing and interest are given below;

(Rs. in Million)

Particulars

Principal

Interest

Cash Credit

32,992.10

4,082.73

Working Capital Term Loan

14,676.37

5,781.19

Priority Debt

1,226.48

647.45

Term Loan

5,906.01

2,634.86

Project Specific Loan

434.50

48.86

Funded Interest on Term Loan

51.95

226.16

12.15% Redeemable, Non Convertible Debentures

2,000

1,667.01

Others

1,645.20

-

Working Capital Demand Loan & Other Facilities from Bank

3,246.34

310.07

ix According to the information and explanations given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans have been applied by the Company during the year for the purposes for which they were obtained.

x According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees have been noticed or reported during the year.

xi According to the information and explanations given to us and based on the audit procedures conducted by us, Managerial Remuneration paid or provided was in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

xii In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Therefore, the provisions of Para 3 (xii) of the Order are not applicable to the Company.

xiii In our opinion and according to the information and explanations given to us, we are unable to obtain sufficient and appropriate audit evidence to comment whether all transactions with the related parties as disclosed in Note 64 to the financial statements are in compliance with section 177 and 188 of Companies Act, 2013. Further, where applicable the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

xiv According to the information and explanations given to us, the Company has not made any preferential allotment. Accordingly, provisions of para 3 (xiv) of the order are not applicable to the Company.

xv According to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with them. The provisions of clause 3 (XV) of the Order are not applicable to the company.

xvi In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.

ANNEXURE "B" TO THE INDEPENDENT AUDITORS'' REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF IVRCL LIMITED

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

We have audited the internal financial controls over financial reporting of IVRCL Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the 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.

Auditors'' 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 "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. 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 qualified 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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.

Basis for Qualified Opinion

In our opinion and according to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2018:

The Company did not have appropriate internal financial controls over (a) Assessment of recoverability of deferred tax assets (b) Assessment of expected credit loss/loss allowance of bank guarantees encashed by customers, unbilled revenue, trade receivables and withheld amounts which are subject matters of various disputes /arbitration proceedings/ negotiations with the customers and contractors due to termination / foreclosure of contracts and other disputes. (c) Assessment of expected cash shortfall and resultant loss allowance that may be required in respect of invocation of corporate guarantees and demand against the Company in respect of such guarantees extended / executed for its subsidiaries and other parties in favour of the lender

(d) Assessment of impairment in value of long term equity investment and assessment of impairment in value of loans and advances to various subsidiary companies and other parties. (e) Control over reconciliation of subcontractors work bills with the work bills submitted to the clients and physical progress of works completed, which could potentially result into inaccurate estimation of percentage of work completed and consequently delay in the realization of unbilled revenue/ receivables. (f) Controls over projects costs estimation and review of balance costs to complete in respect of work projects, which could potentially result into inaccurate estimation of foreseeable losses on works contracts. (g) physical verification of fixed assets and inventories. Further the company did not have any internal audit system during the year.

The inadequate supervisory and review control over Company''s process in respect of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in preparation and presentation of financial statement including the profit/loss after tax.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified opinion

In our opinion, except for the possible effects of material weaknesses described in "basis of qualified opinion" paragraph above, 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, 2018, 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.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended on March 31, 2018, and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For CHATURVEDI & CO.

Chartered Accountant

Firm Registration No. 302137E

PANKAJ CHATURVEDI

Partner

Membership No. 091239

Hyderabad

June 29, 2018


Mar 31, 2015

We have audited the accompanying standalone financial statements of IVRCL LIMITED ("the Company"), which comprise the Balance sheet as at March 31, 2015, the Statement of profit and loss, the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information for the year then ended in which are incorporated the unaudited branch returns for the year ended on that date of the Company's branches at Dubai, Kingdom of Saudi Arabia and Kenya ("the branches").

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its losses and its cash flows for the year ended on that date.

Emphasis of Matters Attention is invited to

1. Note 40 to the Financial Statements regarding Trade Receivables and Other Current Assets aggregating to Rs. 11,948.93 million in respect of which the Company has initiated action for recovery from the customers and considered as good and fully recoverable for the reasons stated therein.

2. Note 41 to the Financial Statements wherein the Management of the Company has considered unbilled revenue amounting to Rs. 1,542.62 million, as good and fully recoverable for the reasons stated therein.

3. Note 43 to the Financial Statements in respect divestment in BOT projects relating to Salem Tollways Limited, Kumarpalyam Tollways Limited and IVRCL Chengapalli Tollways Limited and pending fulfillment of condition precedent to the proposed revised definitive agreement, the Management believe that, the investment is long term and no adjustments is necessary in carrying value of the investment.

4. Note 44 to the Financial Statements regarding the investment amounting to Rs. 657.53 million in its subsidiary Hindustan Dorr-Oliver Limited whose net worth has been eroded due to its accumulated losses and financial statements have been prepared on going concern basis for the reason is stated therein.

5. Note 45 of the financial statements in respect of advances to subsidiary companies aggregating to Rs. 1,394.28 million in relation to bank borrowings taken over by the Company.

6. Note 52 in respect of pending winding up petitions against the company and the matter is subjudice.

7. We did not audit the returns/accounts of 3 branches of the company at Dubai, Kingdom of Saudi Arabia and Kenya whose returns and accounts reflects company's loss of Rs. 102.59 million, assets of Rs. 849.81 million and liability of Rs. 850.85 million for the year ended March 31, 2015.

8. Note 38 to the Financial Statements regarding the managerial remuneration where the Company is awaiting Central government approval and/or in the process of making application to the Central Government.

9. Note 29(3) in respect of the indicative recompense of Rs. 1,646.60 million, payment of which is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently uncertain and hence the proportion of amount payable as recompense has been treated as contingent liability.

Our report is not qualified 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 of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

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

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

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

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 and with the returns/accounts of the branches not visited by us.

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

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

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

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 29 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. The Company did not have any derivative contracts.

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

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

(i) (a) The Company has maintained proper records showing 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 program of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(ii) (a) According to the information and explanations given to us, the management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between physical stocks and book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has granted unsecured Interest free loans to companies covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans having regard to the explanation that the loans were on account of bank borrowing taken over / sponsored loans and rollover wherever applicable,

(a) The receipt of principal amounts, wherever stipulated, is regular;

(b) In view of the above, there is no overdue amount of more than ' one lakh remaining outstanding as at the year end.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, and that the invoices issued by the company involve technical estimates and measurements which may not at times be readily accepted by the customer, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and the sale of goods and services. The Internal Control System in respect to the accounting of purchases, and sales of inventory need to be further strengthened. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) According to the information and explanations given to us, the company has not accepted any deposits within the meaning of Section 73 to 76 of the Act, and the rules framed thereunder to the extent notified. However, Company had accepted deposits in earlier year which has been fully repaid during the year.

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

(vii) (a) According to the information and explanations given to us and records of the Company examined by us, the Company has not been regular in depositing undisputed statutory dues in respect of provident fund, employees' state insurance, income-tax, wealth-tax, service-tax, cess, sales tax and other material statutory dues, as applicable with the appropriate authorities. There have been significant delays in a large number of cases in depositing these dues with the appropriate authorities. There were no undisputed statutory dues outstanding as at March 31, 2015 for a period of more than six months from the date they became payable except as given in Appendix-1 to this report.

(b) According to the information and explanations given to us and records of the Company examined by us, Particulars of dues outstanding in respect of value added tax/sales tax, entry tax which have not been deposited on account of dispute are given in Appendix-2 to this report.

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

(viii) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our Audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of certain dues to financial institutions, banks and debenture holders. The details of such delay are set out in Appendix III to the Reports. Further, as stated in note 37 of the financial statements, the lenders banks, consequent to approval of CDR scheme from Corporate Debt Restructuring Cell (CDR Cell), have restructured the repayment of principal and interest thereon as mentioned in Appendix 3 and waived the default or penal interest charged by them up to the date of restructuring.

(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 and 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 loans have been applied by the Company during the year for the purposes for which they were obtained.

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

For CHATURVEDI & PARTNERS

Chartered Accountants

Firm Registration No.307068E

R N CHATURVEDI

Hyderabad Partner

May 30, 2015 Membership No. 092087


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13thSeptember, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

Attention is invited to

1. Note 40 to the Financial Statements regarding Trade Receivables and Other Current Assets aggregating to Rs. 6,447.45 million in respect of which the Company has initiated action for recovery from the customers.

2. Note 41 to the Financial Statements wherein the Management of the Company has considered unbilled revenue amounting to Rs. 995.33 million, as good and fully recoverable.

3. Note 44 to the Financial Statements regarding the managerial remuneration where the Company is awaiting Central Government approval and/or in the process of making application to the Central Government.

4. Note 45 to the Financial Statements regarding the investment amounting to Rs. 657.53 million in its subsidiary Hindustan Dorr-Oliver Limited whose net worth has been eroded due to its accumulated losses and financial statements have been prepared on going concern basis for the reason is stated therein.

5. Note 51 in respect of pending winding up petitions against the company and the matter is subjudice.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 and proper returns adequate for the purpose of our audit have been received from the branches not visited by us.

(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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read together with General Circular 15/2013 dated 13thSeptember, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

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

ANNEXURE TO 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) Having regard to the nature of the Company''s business / activities during the year, clauses (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company.

(ii) 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 the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

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

(b) In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verification by way of physical count are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 146.02 million to two parties during the year. At the year-end, the outstanding balances of such loans granted aggregated Rs. 1,422.84 million (two parties) and the maximum amount involved during the year was Rs. 1,422.84 million (two parties).

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

(c) In accordance with the terms of loan, the principal, along with interest thereon is receivable in five annual installments after a moratorium of five years from the date of disbursement, or earlier. No installments were due during the current year.

(d) The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii)(e), (f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, and that the invoices issued by the company involve technical estimates and measurements which may not at times be readily accepted by the customer, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and the sale of goods and services. The Internal Control System in respect to the accounting of purchases, and sales of inventory need to be further strengthened. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to inSection 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed thereunder with regard to the deposit accepted from the public. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 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.

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

(a) The Company has not been regular in depositing undisputed statutory dues, in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax and Service Tax with the appropriate authorities. Further, there have been serious delays in large number of cases. The Company has been regular in depositing undisputed dues relating to Wealth Tax, Customs Duty and Investor Education and Protection Fund.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Service Tax, Custom Duty, Cess and other material statutory dues, except in respect of Sales Tax, Provident Fund, Service Tax and Professional Tax which are in arrears as at March 31,2014 for a period of more than six months from the date they became payable. The details of the such delays are set out in Appendix I to the Reports.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31,2014 on account of disputes are set out in Appendix II to the Reports.

(xi) The Company''s accumulated losses are not more than fifty percent of the net worth at the end of the financial year. The Company has incurred cash losses during the financial year but not in the immediately preceding financial period.

(xii) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of certain dues to financial institutions, banks and debenture holders. The details of such delays are set out in Appendix III to the Reports.

(xiii) 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 and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, except for mixed utilization of certain project specific and other loans in projects of the company.

(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis aggregating to Rs.16,555.62 million have been used for long term purposes (i.e. Non-Current Assets).

(xvi) 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 CHATURVEDI & PARTNERS Chartered Accountants (Firm Registration No. 307068E)

R N CHATURVEDI

Partner

(Membership No. 092087)

Hyderabad, May 30, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of IVRCL LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the nine months period then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

We refer to Note 26 of the financial statements wherein the Management of the Company has considered Trade Receivables amounting to Rs. 2,157.42 million as good and fully recoverable. In the absence of external balance confirmations from the customers from whom these amounts are due or other alternate audit evidence to corroborate management''s assessment of recoverability of these balances and having regard to the age of these balances, we are unable to comment the extent to which these balances are recoverable.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph,the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the nine month period ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the nine month period ended on that date.

Emphasis of Matter

Attention is invited to Note 43 to the Financial Statements regarding managerial remuneration for which the Central Government''s approval is awaited. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

(a) Except for the matter described in the Basis for Qualified Opinion paragraph, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as 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) Except for the possible effects of the matter described in the Basis for Qualified Opinion, in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date) (i) Having regard to the nature of the Company''s business / activities during the period, clauses (xii), (xiii), (xiv), (xviii),

(xix) and (xx) of paragraph 4 of the Order are not applicable to the Company. (ii) 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 period by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the period, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the period by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verification by way of physical count are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 103.19 million to two parties during the period. At the period- end, the outstanding balances of such loans granted aggregated Rs. 1,120.99 million (two parties) and the maximum amount involved during the period was Rs. 1,120.99 million (two parties).

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

(c) In accordance with the terms of loan, the principal, along with interest thereon is receivable in five annual installments after a moratorium of five years from the date of disbursement, or earlier. No installments were due during the current period and interest amounts have been received as stipulated.

(d) The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii) (e), (f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, and that the invoices issued by the company involve technical estimates and measurements which may not at times be readily accepted by the customer, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the period. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the period by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 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.

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

(a) The Company has not been regular in depositing undisputed statutory dues, in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax and Service Tax with the appropriate authorities. The Company has been regular in depositing undisputed dues relating to Wealth Tax, Customs Duty and Investor Education and Protection Fund.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Service Tax, Custom Duty, Cess and other material statutory dues, except in respect of Sales Tax, which is in arrears as at March 31, 2013 for a period of more than six months from the date they became payable. The details of such delays are given below:

Name Nature Amount Period to which of Statute of dues (Rs. Million) the amount relates to

Sales Tax Works Contract Tax 17.03 August 2012 and VAT Laws

Name Due Date of Date Payment

Sales Tax September 2012 Not paid

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

* Interest amounts are outstanding as at March 31, 2013.

(xiii) 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 and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the period for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis aggregating to Rs. 2,009.72 million have been used towards investments (including loans) in its subsidiaries.

(xvi) As more fully described in Note 42 to the financial statements, in terms of the proceedings before the Income Tax Settlement Commission pursuant to search and seizure operations carried out by the Income Tax Authorities in earlier years, the Company has filed a Settlement Application during the period under audit, submitting unex- plained expenditure aggregating to Rs. 1,387.74 million, which inter alia include amounts relating to misappropria- tion of materials and certain expenditure which could include possible diversion of funds by an employee for purposes other than business, resulting in consequential undisclosed income and taxes thereon (including interest) of Rs. 579.56 million. Other than the above, to the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the period.

For Chaturvedi & Partners For Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Firm Registration No. 307068E) (Firm Registration No. 008072S)

R. N. Chaturvedi Ganesh Balakrishnan

Partner Partner

(Membership No. 092087) (Membership No. 201193)

Hyderabad, May 30, 2013


Mar 31, 2011

1. We have audited the attached Balance Sheet of IVRCL Limited ("the Compaq") as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year eroded on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in para graphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3(1) of the Companies Act, 1956;

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

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

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Compamy's busimess/aetivities daises (viii), (x), (xii), (xiii), (xiv), (xviii), (xix)and(xx)of CARO are mot applicable.

(ii) In respect of its fixed assets:

(a) The Compaq has maintained proper records showing full particulars, including quantitative details and situation of the 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 the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

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

(b) In our opinion and according to the information and explanation 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 its inventories and no material discrepancies were noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 160.58 million to two parties during the year. At the yearend, the outstanding balances of such loans aggregated Rs. 1,035.36 million and the maximum amount involved during the year was Rs. 1,062.17 million.

(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 accordance with the terms of loan, the principal, along with interest thereon is receivable in five annual instalments after a moratorium of five years from the date of disbursement, or earlier. Accordingly Rs. 55.73 million has been received during the year.

(d) The company has not taken any loan, secured or unsecured from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii) (e), (f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions (other than the loans reported under paragraph (iv) above) have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provision of Sections 58A & 58AA or any other relevant provisions of the Companies Act, 1956 except for a delay in filing the annual return for the year ended March 31, 2010, required under Rule 1 o of the Companies (Acceptance of Deposits) Rules, 1975.

(viii) In our opinion, the imtermal audit function carried out durimg the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the mature of its business.

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

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Incometax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Incometax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31,2011 for a period of more than six months from the date they became payable.

(c) Details of dues of Incometax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on March 31, 2011 on account of disputes are given below:

Statute Nature of Forum where Period to which Amount Involved dues Dispute is pending the amount relates
Sales Tax and Sales Tax Appellate Authority 2004-2009 207.87 VAT Laws and VAT upto Commissioner's level

Appellate Authority 2003 2007 3.50 Tribunal level

Andhra Pradesh Entry Tax Appellate Authority 2001-2002 0.83 Tax on Entry of Tribunal level Motor Vehicles Act, 1996

Finance Act 1994 Service Tax Appellate Authority 2005-2011 2,366.23 upto Commissioner's level

Appellate Authority 2005-2009 512.34 Tribunal level

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(xi) 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 and financial institutions are not prima facie prejudicial to the interests of the Company.

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on shortterm basis have not been used during the year for long term investment.

(xiv) 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 Chaturvedi & Partners for Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Registration No. 307068E) (Registration No. 008072S)

R. N. Chaturvedi K. Rajasekhar

Partner Partner

(Membership No. 092087) (Membership No. 23341)

Hyderabad, May 28, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of IVRCL Infrastructures & Projects Limited ("the Company") as at March 31, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the unaudited Returns from Dubai Branch. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Attention is invited to Note B-27 of Schedule 19 forming part of the financial statements. The Companys branch accounts have not been audited by virtue of an exemption provided under rule 3 of Companies (Branch Audit Exemption) Rules, 1961. Accordingly, the branch returns incorporated in the financial statements of the Company are as certified by the Management.

5. Attention is invited to Note B-9 of Schedule 19 forming part of the financial statements regarding the Companys claim for the benefit of Rs. 1,409.03 million and in respect of which no provision had been made in the previous year as the matter was under appeal. During the year, necessary provision has been made by transfer from the Special Reserve account, as the tax relief available to the Company was withdrawn with retrospective effect.

6. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the unaudited Branch Returns;

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

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

7. On the basis of the written representations received from the Directors as on March 31, 2010 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Companys business/activities, clauses (viii), (x), (xii), (xiii), (xiv) and (xviii) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the 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 the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

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

(b) In our opinion and according to the information and explanation 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 its inventories and no material discrepancies were noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 337.24 million to two parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs. 828.19 million and the maximum amount involved during the year was Rs. 828.19 million.

(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 accordance with the terms of the loan, the principal, along with interest thereon is receivable in five annual instalments after a moratorium of five years. Accordingly no receipt of principal or interest was due during the year.

(d) The company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, paragraphs (iii) (e), (f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is generally an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions (other than the loans reported under paragraph (iv) above) have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except for certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provision of Sections 58A & 58AA or any other relevant provisions of the Companies Act, 1956 except for a delay in filing the annual return for the year ending March 31, 2009, required under Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

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

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on March 31, 2010 on account of disputes are given below:

Statute Nature of Forum where dues Dispute is pending

Andhra Pradesh Sales Sales Tax General Sales Tax Tax Appellate Act 1957 Tribunal

Andhra Pradesh Entry Sales Tax Tax on entry of Motor Tax Appellate Vehicles Act, 1996 Tribunal

Central Sales Tax Sales Tax The Applellate Act 1956 Deputy Commissioner Joint Commissioner of Commerical Tax, Appeals

Gujarat Sales Tax Sales Tax Deputy Commissioner Act of Commercial Tax Appeals

Kerala General Sales Sales Tax Sales Tax Appellate Tax Act Tirbunal Deputy Commissioner, Appeals

Statute Period to which Amount Involved the amount relates (Rs. Million)

Andhra Pradesh 2003- 2005 2.86 General Sales Tax Act 1957

Andhra Pradesh 2001-2002 0.83 Tax on entry of Motor Vehicles Act,1996

Central Sales Tax 2005-2008 9.34 Act 1956

2006-2007 25.23

Gujarat Sales Tax 2004-2005 3.82 Act

Kerala General Sales 1999-2001 2.42 Tax Act 2001-2002 0.34

Statute Nature of Forum where dues Dispute is pending

Value Added Value Added Deputy Commissioner Tax Laws Tax Appeals The Joint Commissioner, Appeals The Joint Excise & Taxation Commissioner, Appeals Sales Tax Appellate Tribunal

Finance Act 1994 Service Tax Central Excise and Service Tax Appellate

Commissioner Appeals

Joint Commissioner Appeals

Statute Period to which Amount Involved the amount relates (Rs. Million)

Value Added 2005-2006 1.22 Tax Laws 2005-2007 4.34

2004-2005 28.24

2006-2007 0.70

Finance Act 1994 2005-2009 412.39

2005-2010 1,230.23

2007-2008 5.65

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.

(xi) 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 and financial institutions are not prima facie prejudicial to the interests of the Company.

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xiv) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 1,200 non convertible debentures of Rs. 1,000,000 each and has created security in respect of 1,050 debentures.

(xv) The Management has disclosed in note B-22 of schedule 19 to the financial statements the end use of money raised by public issues in the previous years and we have verified the same.

(xvi) 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 Chaturvedi & Partners For Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

(Registration No. 307068E) (Registration No. 008072S)

R. N. Chaturvedi K. Rajasekhar

Partner Partner

(Membership No. 092087) (Membership No. 23341)

Hyderabad, May 29, 2010

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