Auditor Report of Marg Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MARG LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance, cash flows and changes in Equity 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s’ Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS 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 Ind AS financial statements.

Basis for Qualified Opinion

1) Attention is invited to note 28; the company has not provided for interest for the year ended 31^st March, 2018 on certain loans that are assigned to Asset Reconstruction Companies (ARCs), which in our opinion, the Company has not followed accrual system of accounting and Disclosure of accounting policy is not in accordance with Ind AS 1-Presentation of Financial Statement to this extent. The Company has signed a settlement plan with Edelweiss Asset Reconstruction Company Ltd (EARC) for loans assigned to EARC and the same will be finalised only on signing of definitive agreement and fulfilment of conditions precedent in the settlement plan. We are unable to comment upon the settlement of finance cost on the aforesaid loans and carrying value of the aforesaid loans and the consequential impact, if any that may arise on the above said matters.

2 Attention is invited to note 34(c); The Company has not provided for Rs. 9.71 Crores relating to work in progress for EPC work done which remain unbilled as on 31st March, 2018 and Management fee of Rs. 4.80 Crores not acknowledged by one of its subsidiaries. Consequently, the loss for the year ended 31st March, 2018 are understated by Rs. 14.51 Crores Accumulated Reserves and Current assets as on 31st March, 2018 are overstated by the same amount.

3 Attention is invited to note 35 regarding invocation of shares held in M/s Karaikal Port Private Limited amounting to Rs. 202.39 Crores as on 31st March, 2018 by the lending banker. Edelweiss ARC has restructured KPPL loan and signed a settlement plan, whereby shares held by Marg Limited in KPPL will be reinstated thereupon will be pledged back to EARC. As per the EARC terms of settlement plan, they have to be allotted equity shares in KPPL for their partial debt outstanding. KPPL will not be a subsidiary of Marg Limited on post conversion of debt in to equity shares. We are unable to comment upon the consequential impact, if any that may arise on the above said matters.

4 Attention is invited to note 36; Regarding confirmation/reconciliation of some of the equipment loans availed by the company, which was not obtained/carried out for the balances as on 31st March, 2018. The differences arising out of the reconciliation, if any, together with the unreconciled amount of Rs. 6.52 Cr relating to the same loan accounts as on 31st March, 2016 continues to be unascertained for the year ended 31st March, 2018.Such differences, if any, will impact the losses for the year ended 31st March 2018, accumulated revenue reserves and balances of such loan accounts as on 31st March 2018.

5 Attention is invited to note 37; The Company did not obtain / receive statements, balance confirmation for most of the current and other accounts maintained with various banks. The company’s bank accounts were attached by Income Tax Investigation Wing during search conducted at the various premises/sites of the company during the year under review. The company has taken steps to lift the bank attachment. However, debit release approval is obtained from the Income Tax Department for staff salary and other related payments.

6 The company did not obtain/ receive balance confirmation from Banks/ARCs, most of the customers/creditors and other parties including loans and advances other than related parties for the balances as on 31^st March, 2018. Hence, we could not obtain external confirmations as required in SA-505, Standards on Auditing and are unable to comment on adjustments or disclosures, if any, that may arise.

7 The company has considered M/s Future Parking Private Limited as its subsidiary and accordingly made disclosures in the Standalone Ind AS financial statements for the year ended 31st March, 2018.Due to change in control and management of M/s Future Parking Private Limited the said company ceased to be a subsidiary of the company; further as per the unaudited financial statements of M/s Future Parking Private Limited, it has not recognised the company as its Holding Company as on 31st March, 2018. Hence, in our opinion the disclosures made in Note 55 of the standalone Ind AS financial statements are not in accordance with Accounting Standard 18-“Related Party Disclosures" and Schedule III of the Act.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the afore said standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Standalone Ind AS financial position of the Company as at 31st March, 2018, and its loss (financial performance including other Comprehensive Income), Changes in Equity and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to the following notes to Standalone Ind AS financial statements:

1) Note 30, regarding preparing Standalone Ind AS financial statements on ‘Going concern’ basis. The accompanying Standalone Ind AS financial statements have been prepared on a going concern basis, after giving due considerations to all matters more fully explained in the said note.

2) Note 31-33, regarding investments in and advances and receivables due from its subsidiaries aggregating to Rs.1131.90 Crores (PY Rs.1096.29 Crores) as on 31st March, 2018. No provision for diminution/recoverability is considered necessary for reasons stated therein.

3) Note 34, regarding deductions made/amount withheld by some customers aggregating to Rs.1.06 Crores (PY Rs.1.06 Crores) which are being carried as trade receivables. The company is also carrying work-in-progress/inventory of Rs.16.67 Crores (PY Rs.16.67 Crores) and assets withheld at site of Rs.1.51 Crores (PY Rs.1.51 Crores) relating to these customers. These balances are subject matter of Arbitration and ultimate outcome of the above matters cannot presently be determined. However, the Company is of the view that such amounts are recoverable and hence no provision is required there against.

Report on Other Legal and Regulatory Requirements

1.As required by the Companies (Auditor’s Report) Order, 2016 (‘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 paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

b) In our opinion, except for the matters described in the Basis of qualified opinion paragraph, 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, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, except for the effect of the matters described in Basis of qualified opinion paragraph above, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The Going Concern matter described in the paragraph (1), under the Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

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

h) With respect to the adequacy of the internal financial controls over financial reporting of the company and operating effectiveness of such controls as on 31st March, 2018, refer to our separate report in Annexure B.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 (e) and (f), Note 34 and Note 35 to the standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. Rs.3,85,486/- is required to be transferred, to the Investor Education and Protection Fund by the Company and the same is yet to be transferred at the Balance Sheet date.

ANNEXURE-A TO AUDITORS’ REPORT REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF MARG LIMITED:

1) a) The fixed assets register of the company needs to be updated as on the date of our audit report.

b) The fixed assets were physically verified during the year by the management, as per the programme of physical verification of fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no serious discrepancies have been noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of records of the company, the title deeds of the immovable properties are held in the name of the company. However, the same was offered as collateral for the loan taken by the Company.

2) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year. In our opinion, the frequency of physical verification is reasonable. The material discrepancies noticed on verification have been properly dealt with the books of account.

3) a) The Company has granted unsecured loans to parties covered in the register maintained under section 189 of the Companies Act, 2013. According to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the interests of the company.

b) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is subordinated to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans.

c) There is no overdue amount in respect of such loans granted to such companies.

4) According to the information and explanations given to us, the company has complied with the provisions of section 185 and section 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.

5) In our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and doesn’t have any unclaimed deposits. Therefore, provisions of clause 3 (v) of the Order are not applicable to the company.

6) On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under section 148 (1) of the Companies Act, 2013 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

7) a) According to the information and explanations given to us and as per the records produced by the company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee’s State Insurance, Income Tax, Value added Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us and as per the records produced by the company, undisputed amounts payable in respect of Tax deducted at source, Service Tax, Value added Tax and Works Contract Tax, Provident fund & State Insurance and Professional Tax to the extent of Rs.4.11 Crores (PY Rs.2.91 crores), Rs.12.14 Crores (PY Rs.7.31 Crores), Rs.1.24 Crores (PY Rs.1.21 Crores), Rs.0.50Crores (PY Rs.0.81 Crores) and Rs.0.18 Crores (PY Rs.0.16 Crores) respectively, were in arrears as at 31st March 2018, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Tax deducted at source, which are in dispute, are as follows:-INCOME TAX:

	Details of Demand
Asst.		Amount Paid under Protest			Forum Where
Year	Demand Raised By Dept.	Till 31st March 2017	During 201718	Total	Dispute is Pending
2002-03	86,89,565	96,59,367	-	96,59,367	ITAT-Chennai
2009-10	36,00,000	-	-	-	ITAT-Chennai
2008-09	52,76,990	52,76,990		52,76,990	Madras High Court
2009-10	38,96,457	38,96,457		38,96,457	Madras High Court
2010-11	1,99,19,645	1,12,52,732	-	1,12,52,732	Madras High Court
2011-12	1,76,92,108	1,76,89,798	-	1,76,89,798	Madras High Court
Total	5,90,74,765	4,77,75,344	-	4,77,75,344

TAX DEDUCTED AT SOURCE

Asst. Year	Demand	Amount paid under Protest	Forum where Dispute is pending
1996- 97	21,503	4,931	ITO - TDS - 1 (4)
1997- 98	23,68,619	23,17,682	ITO - TDS - 1 (4)
1998- 99	16,28,830	8,42,934	ITO - TDS - 1 (4)
1999- 00	18,57,640	5,81,282	ITO - TDS - 1 (4)
2000- 01	4,42,820	65,440	ITO - TDS - 1 (4)
Total	63,19,412	38,12,269

8) According to the information and explanations given to us and as per the records produced by the company, the outstanding defaults as on 31st March, 2018 in respect of loans taken from Banks/FIs are as follows:

Bank Name	(Amount in Rs. In Crore)
	Period of default
	Less than 90 days	More than 90 days
ICICI Bank	-	45.09
Allahabad Bank	-	6.07
Standard Chartered Bank	-	65.07
IFCI Venture Capital Funds Ltd	-	16.76
L&T Finance Ltd	-	0.62
SREI	-	91.26
SICOM	-	29.48
Loans transferred to ARC*	-	989.38
Total	-	1,243.73

*includes Cash Credit facilities, FITL, WCTL and other Term loans transferred to Asset Reconstruction Companies (ARCs) Refer note 29 to Standalone Ind AS financial statements.

9) The company has not raised money by way of public offer during the year under review. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

10) According to the information and explanations given to us and to the best of our knowledge and belief, no material fraud on or by the company has been noticed or reported during the course of

11) The company has not paid or provided for managerial remuneration. Hence clause 3 (xi) of the Order is not applicable to the company.

12) The company is not a Nidhi Company. Hence, clause 3 (xii) of the order is not applicable.

13) All transactions with related parties are in compliance with section 177 and section 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

14) The company hasn’t made preferential allotment or private placement of shares or fully/partly convertible debentures during the year under review. Hence clause 3 (xiv) of the Order is not applicable to the company.

15) The company has not entered into non-cash transactions with the directors or persons connected with them during the year under review.

16) The company is not required to register under section 45-IA of the Reserve Bank of India Act, 1934. Hence clause 3(xvi) is not applicable to the company.

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF MARG 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 MARG Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS 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, deemed to be prescribed under Section 143(10) of the Act, 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 judgement, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Standalone Ind AS financial statements for external purposes in accordance with generally 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 Standalone Ind AS 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 standalone Ind AS 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.

Qualified Opinion

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:

There were delays in a) recording of transactions relating to sale of fixed assets and b) recording of expenses transactions met out of staff Imprest Advances. The Internal Financial Controls were not operating effectively to this extent.

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.

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of 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 March 31, 2018 standalone Ind AS financial statements of the Company, and these material weaknesses do not affect our opinion on the standalone Ind AS financial statements of the Company.

For A.R.KRISHNAN & ASSOCIATES

Chartered Accountants

Firm’s Reg. No:009805S

A SENTHIL KUMAR

Partner

Membership No: 214611

Place :Chennai

Date :30^th May, 2018

---

Mar 31, 2016

To

The Members of MARG LIMITED

Report on the Standalone Financial Statements

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

Management’s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 preparation of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s’ Responsibility

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

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

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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis of Qualified Opinion

1) Attention is invited to note 28; the company has not provided for interest for the year ended 31st March, 2016 on certain loans that are assigned to Asset Reconstruction Companies (ARCs), which in our opinion, the Company has not followed accrual system of accounting and Disclosure of accounting policy is not in accordance with AS 1-Disclosure of accounting policies to this extent. Consequently, the Finance cost, Net loss for the year ended 31st March, 2016 are understated by Rs, 154.98 Crores and loan liability is understated and accumulated reserves are overstated by Rs, 154.98 Crores as on 31st March, 2016.

2) Attention is invited to note 34; The Company has not provided for Rs, 53.92 Crores relating to work in progress for EPC work done which remain unbilled as on 31st March, 2016 and Management fee of Rs, 4.8 Crores not acknowledged by one of its subsidiaries. Consequently, the loss for the year ended 31st March, 2016 are understated by Rs, 58.72 Crores Accumulated Reserves and Current assets as on 31st March, 2016 are overstated by the same amount.

3) Attention is invited to note 35 regarding investment in shares of a subsidiary of Rs, 202.39 Crores as on 31st March, 2016 given as security for loan raised by the Subsidiary company, which were invoked by the Bank; Pending final outcome of the case and continuation of stay granted by the Hon''ble High Court the Company continues to carry the investment cost without any provision and consider the said company its subsidiary. However considering the significant uncertainty in this matter we are unable to comment, a) whether the company will be able to recover the Investment having carrying cost ofRs, 202.39 Crores and b) whether the company continues to be the Holding Company of the said company.

4) Attention is invited to note 36;Regarding confirmation/reconciliation of some of the equipment loans availed by the company, which was not obtained/carried out for the balances as on 31st March, 2016. The differences arising out of the reconciliation, if any, together with the unreconciled amount of Rs, 6.52 Cr relating to the same loan accounts as on 31st March, 2015 continues to be unascertained for the year ended 31st March, 2016. Such differences, if any, will impact the losses for the year ended 31st March 2016, accumulated revenue reserves and balances of such loan accounts as on 31st March 2016. This matter was also qualified in our report for the year ended 31st March 2015.

5) The company has considered M/s Future Parking Private Limited as its subsidiary and accordingly made disclosures in the financial statements for the year ended 31st March,

2016.Due to change in control and management of M/s Future Parking Private Limited the said company ceased to be a subsidiary of the company; further as per the audited financial statements of M/s Future Parking Private Limited, it has not recognized the company as its Holding Company as on 31st March, 2016. Hence, in our opinion the disclosures made in Note 46 of the financial statements are not in accordance with Accounting Standard 18-"Related Party Disclosures” and Schedule III of the Act.

6) The company didn''t obtain/ receive balance confirmation from Banks/ARCs, most of the customers/creditors and other parties for the balances as on 31st March, 2016. Hence, we could not obtain external confirmations as required in SA-505, Standards on Auditing and are unable to comment on adjustments or disclosures, if any, that may arise.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except or the effects of the matter described in the Basis for Qualified Opinion paragraph above, the afore said standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to the following notes to financial statements:

1) Note 30, regarding preparing financial statements on ''Going concern'' basis. The accompanying financial statements have been prepared on a going concern basis, after giving due considerations to all matters more fully explained in the said note.

2) Note 31, regarding investments in and advances and receivables due from its subsidiaries aggregating to Rs, 1023.14 (PY Rs, 954.10 Crores) as on 31st March, 2016. No provision for diminution/recoverability is considered necessary for reasons stated therein.

3) Note 33, regarding deductions made/amount withheld by some customers aggregating to Rs, 11.82 Crores (PY Rs, 8.10

Crores) which are being carried as trade receivables. The company is also carrying work-in-progress/inventory of Rs, 25.46 Crores (PY Rs, 27.85 Crores) and assets withheld at site of Rs, 1.75 Crores (PY Rs, 1.99 Crores) relating to these customers. These balances are subject matter of Arbitration and ultimate outcome of the above matters cannot presently be determined. However the Company is of the view that such amounts are recoverable and hence no provision is required there against.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (''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 paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

b) In our opinion, except for the matters described in the Basis of qualified opinion paragraph, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

d) In our opinion, except for the effect of the matters described in Basis of qualified opinion paragraph above, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The Going Concern matter described in the paragraph (a), under the Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

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

h) With respect to the adequacy of the internal financial controls over financial reporting of the company and operating effectiveness of such controls as on 31st March, 2016, refer to our separate report in Annexure B.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 27 (e) and (f) , Note 33 and Note 35to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

1) a) The fixed assets register of the company needs to be updated as on the date of our audit report.

b) The fixed assets were physically verified during the year by the management, as per the programme of physical verification of fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no serious discrepancies have been noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of records of the company, the title deeds of the immovable properties are held in the name of the company.

2) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year. In our opinion, the frequency of physical verification is reasonable. The material discrepancies noticed on verification have been properly dealt with the books of account.

3) a) The Company has granted unsecured loans to parties covered in the register maintained under section 189 of the Companies Act, 2013. According to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the interests of the company.

b) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinate to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans.

c) There is no overdue amount in respect of such loans granted to such companies.

4) According to the information and explanations given to us, the company has complied with the provisions of section 185 and section 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.

5) In our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and doesn''t have any unclaimed deposits. Therefore, provisions of clause 3 (v) of the Order are not applicable to the company.

6) On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under section 148 (1) of the Companies Act, 2013 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

7) a) According to the information and explanations given to us and as per the records produced by the company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income Tax, Value added Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us and as per the records produced by the company, undisputed amounts payable in respect of Tax deducted at source, Service Tax, Value added Tax and Works Contract Tax, Provident fund and Professional Tax to the extent of Rs, 2.25Crores (PY Rs, 7.43 crores), Rs, 5.33 Crores (PY Rs, 1.70 Crores), Rs, Nil (PY Rs, 2.12 Crores), Rs, 0.63 Crores (PY Rs, 0.26 Crores) and Rs, 0.13 Crores (PY Rs, 0.11 Crores) respectively, were in arrears as at 31st March

2016, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Tax deducted at source, which are in dispute, are as follows:-

Income Tax:				(Amount in Rs,
Asst. Year	Demand Raised by Dept.	Details of Demand Amount Paid under Protest Forum Where Till Diring Total Dispute is 31-Mar-15 2015-16 Pending
2001 - 02	1,15,65,317	Nil	Nil	Nil ITAT-Chennai
2002 - 03	89,26,848	96,59,367	Nil	96,59,367 ITAT-Chennai
2008 - 09	52,76,990	52,76,990	Nil	52,76,990 CIT (Appeals)-8
2009 - 10	38,96,457	38,96,457	Nil	38,96,457 ITAT-Chennai*
2010 - 11	2,13,34,868	Nil	228,06,996	228,06,996 ITAT-Chennai*
2011 - 12	10,80,37,110	Nil	65,00,000	65,00,000 ITAT-Chennai*
2011 - 13	31,56,45,360	Nil	60,00,000	60,00,000 ITAT-Chennai*

Total 474,682,950 18,832,814 353,06,996 541,39,810

*as informed to us the company is in the process of filing appeal with High Court of Madras

Tax Deducted at source:			(Amount in Rs,)
Asst.	Department	Amount paid	Forum where
Year	Demand	under protest
1996-97	21,503	4,931	ITO-TDS
1997-98	2,368,619	2,317,682	ITO-TDS
1998-99	1,628,830	842,934	ITO-TDS
1999-00	1,857,640	581,282	ITO-TDS
2000-01	442,820	65,440	ITO-TDS

8) According to the information and explanations given to us and as per the records produced by the company, the outstanding defaults as on 31st March, 2016 in respect of loans taken from Banks/FIs are as follows:

Income Tax:_(Amount in Rs,)

Bank Name	Period of default Less than 90 days More than 90 days
ICICI	.	46.34
IFCI Venture Capital Funds Ltd	0.38	9.42
Standard Chartered Bank	2.84	-
State Bank of Hyderabad	-	0.19
HDFC	-	1.10
Loans transferred to ARC*	-	1,169.37

*includes Cash Credit facilities, FITL, WCTL and other Term

loans transferred to Asset Reconstruction Companies (ARCs)

Refer note 29 to financial statements.

14) The company hasn''t made preferential allotment or private placement of shares or fully/partly convertible debentures during the year under review. Hence clause 3 (xiv) of the Order is not applicable to the company.

15) The company has not entered into non-cash transactions with the directors or persons connected with them during the year under review.

16) The company is not required to register under section 45-IA of the Reserve Bank of India Act, 1934. Hence clause 3(xvi) is not applicable to the company.

For K RAMKUMAR & CO.,

Chartered Accountants

Firm’s Reg No:02830S R M V BALAJI

Partner

Membership No: 027476

Place : Chennai

Date : 31st May, 2016

9) The company has not raised money by way of public offer during the year under review. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

10) According to the information and explanations given to us and to the best of our knowledge and belief, no material fraud on or by the company has been noticed or reported during the course of audit.

11) The company has not paid or provided for managerial remuneration. Hence clause 3 (xi) of the Order is not applicable to the company.

12) The company is not a Nidhi Company. Hence, clause 3 (xii) of the order is not applicable.

13) All transactions with related parties are in compliance with section 177 and section 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

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 MARG Limited ("the Company”) as of March 31,

2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

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, deemed to be prescribed under Section 143(10) of the Act, 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Qualified Opinion

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, 2016:

There were delays in a) recording of transactions relating to sale of fixed assets and b) recording of expenses transactions met out of staff Impress Advances. The Internal Financial Controls were not operating effectively to this extent.

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.

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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 March 31, 2016 standalone financial statements of the Company, and these material weaknesses do not affect our opinion on the standalone financial statements of the Company.

For K Ramkumar & Co

Chartered Accountants

Firm Registration no: 02830S

R M V Balaji

Partner

Membership no: 027476

Place : Chennai

Date : 31^st-May-16

---

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 preparation of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's' Responsibility

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

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

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 control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis of Qualified Opinion

Attention is invited to note 34 regarding un-reconciled amount of Rs, 6.52 Crores relating to the equipment loan availed by the company, whereby, the loan liability as per the Company as on 31st March, 2015 is short by Rs, 6.52 Crores. Pending reconciliation of this loan account, the effect on the loss, if any, for the year ended 31st March, 2015 and accumulated revenue reserves/loan liability of the company as on 31st March, 2015 could not be ascertained.

Qualified Opinion

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to the following notes to financial statements:

a) Note 29, regarding preparing financial statements on 'Going concern' basis. The accompanying financial statements have been prepared on a going concern basis, after giving due considerations to all matters more fully explained in the said note.

b) Note 30, regarding investments in and advances and receivables due from its subsidiaries aggregating to Rs, 954.10 Crores (PY Rs, 901.75 Crores) as on 31st March, 2015. No provision for diminution/recoverability is considered necessary for reasons stated therein.

c) Note 31, regarding deductions made/amount withheld by some customers aggregating to Rs, 8.10 Crores which are being carried as trade receivables. The company is also carrying work-in-progress/inventory of Rs, 27.85 Crores and assets withheld at site of Rs, 1.99 Crores relating to these customers. These balances are subject matter of Arbitration and ultimate outcome of the above matters cannot presently be determined although the Company is of the view that such amounts are recoverable and hence no provision is required there against.

d) Note 32, regarding Work in progress of Rs, 53.92 Crores relating to the EPC work done by the company to one of its subsidiary, which is yet to be billed as on 31st March, 2015. No provision for recoverability is considered necessary for reasons stated therein.

e) Note 33, regarding investment in shares of a subsidiary of Rs, 202.39 Croresas on 31st March, 2015 given as security for loan raised by the Subsidiary company, which were invoked by the Bank; such shares continues to be included in investments due to the reasons stated therein.

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 paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

b) In our opinion, except for the matters described in the Basis of qualified opinion paragraph, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

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

e) The Going Concern matter described in the paragraph (a), under the Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 27 (e) and (f), Note 31 and Note 33to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

1) a) The fixed assets register of the company needs to be updated as on the date of our audit report.

b) The fixed assets were physically verified during the year by the management, as per the programme of physical verification of fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no serious discrepancies have been noticed on such verification.

2) a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3) a) The Company has granted unsecured loans to parties covered in the register maintained under section 189 of the Companies Act.

b) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinate to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans. c) There is no overdue amount in respect of such loans granted to such companies.

4) In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) In our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and doesn't have any unclaimed deposits. Therefore, provisions of clause 3 (v) of the Order are not applicable to the company.

6) On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under section 148 (1) of the Companies Act, 2013 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

7) a) According to the information and explanations given to us and as per the records produced by the company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Value added Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us and as per the records produced by the company, undisputed amounts payable in respect of Tax deducted at source, Service Tax, Value added Tax and Works Contract Tax, Provident fund and Professional Tax to the extent of Rs, 7.43 crores (PY Rs, 2.01 Crores), Rs, 1.70 Crores (PY Rs, 0.93 Crores), Rs, 2.12 Crores (PY Rs, 1.91 Crores), Rs, 0.26 Crores (PY Rs, Nil) and Rs, 0.11 (PY Rs, 0.07 Crores) respectively, were in arrears as at 31st March 2015, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Customs Duty/Cess, which are in dispute, are as follows:-

Details of Demand (Amount in Rs,)

Amount Paid under Protest

Forum Where Asst. Demand Raised by Till During Total Dispute is Year Dept. 31-Mar-14 2014-15 Pending

2001 - 02 1,15,65,317 Nil Nil Nil CIT (Appeals)-8

2002 - 03 89,26,848 96,59,367 Nil 96,59,367 CIT (Appeals)-8

2008 - 09 52,76,990 52,76,990 Nil 52,76,990 CIT (Appeals)-8

2009 - 10 38,96,457 38,96,457 Nil 38,96,457 CIT (Appeals)-8

2010 - 11 2,13,34,868 Nil Nil Nil CIT (Appeals)-8

2011 - 12 10,80,37,110 Nil Nil Nil CIT (Appeals)-8

2011 - 13 31,56,45,360 Nil Nil Nil CIT (Appeals)-8

Total 474,682,950 18,832,814 Nil 18,832,814

Income Tax Deducted At Source: (Amount in Rs,)

Asst. Department Amount paid Forum where Year Demand under protest Dispute is pending

1996-97 21,503 4,931 ITO-TDS

1997-98 2,368,619 2,317,682 ITO-TDS

1998-99 1,628,830 842,934 ITO-TDS

1999-00 1,857,640 581,282 ITO-TDS

2000-01 442,820 65,440 ITO-TDS

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Customs Duty/Cess, which are in dispute, are as follows:- 8) The Company has no accumulated losses as on 31st March, 2015. The company has incurred cash loss of Rs, 152.37 Crores during the financial year covered by audit and Rs, 223.09 Crores in the immediately preceding financial year.

9) According to the information and explanations given to us and as per the records produced by the company, the outstanding defaults as on 31st March, 2015 were Rs, 54.98 Crores (PY Rs, 227.49 Crores) for a period less than 90 days and Rs, 1172.17 Crores (PY Rs, 56.72Crores) for a period exceeding 90 days.

10) According to the information and explanations given to us, the Company has given guarantees aggregating to Rs, 3247.67 Crores (PY Rs, 3290.54 Crores) for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are prima facie not prejudicial to the interests of the company.

11) In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

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

For K RAMKUMAR & CO.,

Regn No: 02830S

Chartered Accountants



R M V BALAJI

Partner

Membership No: 27476



Place : Chennai

Date : 31-May-15

---

Mar 31, 2014

We have audited the accompanying financial statements of MARG Limited ("the Company"), which comprise the Balance Sheet as at 31-Mar-14, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31-Mar-14;

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to the following notes to financial statements:

a) Note 29, regarding preparing financial statements on ''Going concern'' basis. The accompaying financial statements have been prepared on a going concern basis, after giving due considerations to all matters more fully explained in the said note.

b) Note 30, regarding investments in and advances and receivables due from some of its subsidiaries aggregating to Rs. 901.75 Crores as on 31st March, 2014. No provision for dimunition/receoverability is considered necessary for reasons stated therein.

c) Note 31, regarding deductions made/amount withheld by some customers aggregating to Rs. 2.62 Crores which are being carried as trade receivables. The company is also carrying work-in-progress inventory of Rs. 15.03 Crores and assets withheld at site of Rs. 4.15 Crores relating to these customers. The ultimate outcome of the above matters cannot presently be determined although the Company is of the view that such amounts are recoverable and hence no provision is required thereagainst.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

ANNEXURE TO AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 OF OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF MARG LIMITED

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

b) The Company has a programme of Physical verification of Fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and no serious discrepancies have been noticed on such verification.

c) During the year, the company has not disposed off substantial part of fixed assets.

2. a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3. a) The Company has taken unsecured loans from six parties, covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs. 24.58 Crores (PY Rs. 20.60 Crores) and the year-end balance of loans granted to such companies was Rs. 22.43 (PY Rs. 19.62 Crores).

b) The Company has granted unsecured loans to 39 parties, covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs. 512.57 Crores (PY Rs. 510.01 Crores) and the year-end balance of loans granted to such companies was Rs. 439.71 Crores (PY Rs. 456.27 Crores).

c) The Company did not charge interest on loans given to its wholly owned subsidiaries, excepting three companies,for the period under review, which in our opinion, is prima facie prejudicial to the interests of the company. According to the information and explanations given to us, other terms and conditions of the loans given/taken are not prima facie, prejudicial to the interest of the company.

d) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinated to the secured loans from Banks and Finan- cial Institutions availed by such subsidiaries and accord- ingly the obligation to repay does not arise during the pendency of said secured loans.

4. In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. b) In our opinion and according to the information and explanations given to us the transaction in pursuance of contracts or arrangements entered in the register maintained U/s 301 of The Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at rates or value which are reasonable having regard to the prevailing market rates or values at the relevant time.

6. The Company has not accepted any deposits from the public in terms of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

7. In our opinion, the Company has an internal audit system, which is not commensurate with the size of the company and nature of its business.

8. On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

9. a) According to the information and explanations given to us and as per the records produced by the company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee''s State Insurance, Tax deducted at source, Value added Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us and as per the records produced by the company, undisputed amounts payable in respect of Tax deducted at source, Service Tax, Value added Tax and Works Contract Tax, Provident fund and Professional Tax to the extent of Rs. 2.01 crores (PY Rs. 6.71 Crores), Rs. 0.93 Crores (PY Rs. 18.55 Crores), Rs. 1.91 Crores (PY Rs. 3.92 Crores), Nil (PY Rs. 0.20 Crores) and Rs. 0.07 (PY Rs. 0.14 Crores) respectively, were in arrears as at 31st March 2014, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Customs Duty/Cess, that are in dispute are as follows:- (Amount in Rs.)

Details of Demand (Amount in Rs.)

Amount Paid under Protest Forum Where Demand Asst. Raised by Till During Till Dispute is Year Dept. 31-Mar-13 2012-14 31-Mar-14 Pending

2001- 03 89,26,848 96,59,367 - 96,59,367 CIT (A) (V)

2002- 09 52,76,990 52,76,990 - 52,76,990 CIT (A) (V)

2009- 10 38,96,457 38,96,457 - 38,96,457 CIT (A) (V)

2011- 12 10,80,37,110 - - - CIT (A) (V)

Total 12,61,37,405 1,88,32,814 - 1,88,32,814

Income Tax Deducted At Source: (Amount in Rs.)

Asst. Department Amount paid Forum where Year Demand under protest Dispute is pending

1996-97 21,503 4,931 ITO-TDS

1997-98 2,368,619 2,317,682 ITO-TDS

1998-99 1,628,830 842,934 ITO-TDS

1999-00 1,857,640 581,282 ITO-TDS

2000-01 442,820 65,440 ITO-TDS

10. The Company has no accumulated losses as on 31st March, 2014. The company has incurred cash loss of Rs. 223.09 Crores during the financial year covered by audit and Rs. 48.45 Crores in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the records produced by the company, the company has defaulted by delaying the repayment of principal/interest to Banks and Financial institutions during the year to the extent of Rs. 105.60 Crores (PY Rs. 30.32 Crores) for a period less than 90 days and Rs. 20.73 Crores (PY Rs. 25.31 Crores) for a period exceed- ing 90 days. The outstanding defaults as on 31st March, 2014 were Rs. 227.49 Crores (Rs. 15.03 Crores) for a period less than 90 days and Rs. 56.72 Crores (PY Rs. 15.67 Crores) for a period exceeding 90 days.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees aggregating to Rs. 3290.54 Crores (PY Rs. 3170.22 Crores) for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are prima facie not prejudicial to the interests of the company.

16. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company we report that no funds raised on short-term basis have been used for Long Term investment.

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained U/s 301 of the Companies Act, 1956 during the year.

19. During the year, the company has not issued any debentures and therefore the question of creating security or charge in respect thereof does not arise.

20. The Company has not made any public issue during the year covered under audit.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company was noticed or reported during the year.

For K RAMKUMAR & CO., Regn No: 02830S Chartered Accountants

R M V BALAJI Partner Membership No: 27476

Place : Chennai Date : 30-May-14

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MARG Limited ("the Company"), which comprise the Balance Sheet as at 31-Mar-13, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31-Mar-13;

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

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

Emphasis of Matter

Without qualifying our opinion we draw attention to Note 43 to the financial statements. The accompanying financial statements have been prepared on a going concern basis after giving due considerations to all matters more fully explained in aforesaid note.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31-Mar-13, and taken on record by the Board of Directors, none of the directors is disqualified as on 31-Mar-13, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 OF OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF MARG LIMITED

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

b) The Company has a programme of Physical verification of Fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and no serious discrepancies have been noticed on such verification.

c) During the year, the company has not disposed off substantial part of fixed assets.

2. a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3. a) The Company has taken unsecured loans from five parties, covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs.20.60 Crores and the year end balance of loans granted to such companies was Rs.19.62 Crores.

b) The Company has granted unsecured loans to forty one parties, covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs.510.01 Crores and the yearend balance of loans granted to such companies was Rs.456.27 Crores.

c) According to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given are not prima facie, prejudicial to the interests of the company.

d) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinated to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans.

4. In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us the transaction in pursuance of contracts or arrangements entered in the register maintained U/s 301 of The Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at rates or value which are reasonable having regard to the prevailing market rates or values at the relevant time.

6. The Company has not accepted any deposits from the public in terms of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

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

8. On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

9. a) According to the records of the Company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income Tax, Value added Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the records of the company, undisputed amounts payable in respect of Income Tax, Service Tax, Value added Tax and Works Contract Tax , Provident fund and Professional Tax to the extent of Rs.6.71 Crore, Rs.18.55 Crore Rs.3.92 Crore Rs.0.20 Crore and Rs.0.14 Crore respectively, were in arrears as at 31st March 2013, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Customs Duty/Cess, that are in dispute are as follows:- Tax on Income:

(Amount in Rs.)

Amount Paid under Protest Asst. Forum Where Year Tax Till During Till Dispute is Demand 31-Mar-12 2012-13 31-Mar-13 Pending

2001 - 02 16,785,003 16,879,719 - 16,879,719 Madras High Court

2002 - 03 8,926,848 9,659,367 - 9,659,367 CIT(Appeal)

2008 - 09 5,276,990 5,276,990 - 5,276,990 CIT(Appeal)

2009 - 10 3,896,457 3,896,457 - 3,896,457 CIT(Appeal)



Income Tax Deducted At Source: (Amount in Rs.)

Asst. Department Amount paid Forum where Year Demand under protest Dispute is pending

1996-97 21,503 4,931 ITO-TDS

1997-98 2,368,619 2,317,682 ITO-TDS

1998-99 1,628,830 842,934 ITO-TDS

1999-00 1,857,640 581,282 ITO-TDS

2000-01 442,820 65,440 ITO-TDS

10. The Company has no accumulated losses as on 31st March, 2013. The company has incurred cash loss of Rs.48.45 Crores during the financial year covered by audit. There are no cash losses in the immediately preceding financial year.

11. a) According to the information and explanations given to us and as per the records produced by the company, the company has defaulted by delaying the repayment of principal/interest to Banks during the year to the extent of Rs.30.32 Crores for a period less than 90 days and Rs.25.31 Crores for a period exceeding 90 days. The outstanding defaults as on 31st March, 2013 was Rs.30.70 Crores out of which Rs.9.82 Crores was paid on or before the date of the audit report.

b) Devolved letters of credit of Rs.419.48 Crores was converted into Working Capital Term Loan (WCTL) as part of the restructuring scheme.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees aggregating to Rs.3170.22 Crores for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are prima facie not prejudicial to the interests of the company.

16. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company we report that no funds raised on short-term basis have been used for Long Term investment.

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained U/s 301 of the Companies Act, 1956 during the year.

19. During the year, the company has not issued any debentures and therefore the question of creating security or charge in respect thereof does not arise.

20. The Company has not made any public issue during the year covered under audit.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company was noticed or reported during the year.



For K RAMKUMAR & CO.,

Regn No: 02830S

Chartered Accountants



R M V BALAJI Partner

Membership No: 27476



Place : Chennai

Date : 30-May-13

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s MARG LIMITED as on 31st March 2012 and the annexed Profit & Loss Account and Cash Flow Statement for the year ended 31st March 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to this Company.

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

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

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

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

d. According to the best of our information and explanations given to us, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the accounting standards referred to in Section 211(3C) of The Companies Act 1956, in so far as they are applicable to the Company.

e. On the basis of written representations received from the Directors of the company and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2012 from being appointed as a director U/s 274(1)(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the accounts read with the notes give the information required by the Companies Act, 1956 in the manner required and give a true and fair view,

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2012;

ii. in the case of Profit and Loss Account of the Profit for the year ended 31st March 2012; and

iii. in the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st March 2012.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF MARG LIMITED

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

b) The Company has a programme of Physical verification of Fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and no serious discrepancies have been noticed on such verification.

c) During the year, the company has not disposed off substantial part of fixed assets.

2. a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3. a) The Company has not taken any loan from parties covered in the register maintained under section 301 of the Companies Act.

b) The Company has granted unsecured loans to 41 Subsidiary companies, covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs. 508.13 Crores and the year end balance of loans granted to such companies was Rs. 420.68 Crores.

c) According to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given are not prima facie, prejudicial to the interests of the company.

d) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinated to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans.

4. In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us the transaction in pursuance of contracts or arrangements entered in the register maintained U/s 301 of The Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at rates or value which are reasonable having regard to the prevailing market rates or values at the relevant time.

6. The Company has not accepted any deposits from the public in terms of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

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

8. On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 have been maintained. We have not carried out a detailed examination of such accounts and records, as we are required to conduct only a general review of the cost records.

9. a) According to the records of the Company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Wealth Tax, Custom Duty, Cess, Sales Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the records of the company, undisputed amounts payable in respect of Income Tax, Service Tax and Value Added Tax to the extent of Rs. 4.29 Crore, Rs. 1.49 Crore and Rs. 0.32 Crore respectively, were in arrears as at 31st March 2012, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Sales Tax/Customs Duty/Cess, that are in dispute are as follows:

Income Tax Deducted At Source:

Asst. Department Amount paid Forum where Year Demand under protest Dispute is pending

1996-97 21,503 4,931 ITO-TDS

1997-98 2,368,619 2,317,682 ITO-TDS

1998-99 1,628,830 842,934 ITO-TDS

1999-00 1,857,640 581,282 ITO-TDS

2000-01 442,820 65,440 ITO-TDS

10. The Company has no accumulated losses and has no cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. As per the records produced, the company has defaulted in repayment of principal/interest to Banks during the year to the extent of Rs. 177.83 Crores for a period less than 90 days and the same has been since paid.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees aggregating to Rs.3101.31 Crores for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are prima facie not prejudicial to the interests of the company.

16. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company we report that no funds raised on short-term basis have been used for Long term investment.

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained U/s 301 of the Companies Act, 1956 during the year.

19. During the year, the company has not issued any debentures and therefore the question of creating security or charge in respect thereof does not arise.

20. The Company has not made any public issue during the year covered under audit.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company was noticed or reported during the year.

For K RAMKUMAR & CO., Regn No: 02830S

Chartered Accountants

R M V BALAJI Partner

Membership No. 27476

Place : New Delhi Date : 05-Sep-12

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s MARG LIMITED as on 31st March 2011 and the annexed Profit & Loss Account and Cash Flow Statement for the year ended 31st March 2011. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to this Company.

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

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

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

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

d. According to the best of our information and explanations given to us, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the accounting standards referred to in Section 21K3C) of The Companies Act 1956, in so far as they are applicable to the Company.

e. On the basis of written representations received from the Directors of the company and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2011 from being appointed as a director U/s 274(l)(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the accounts read with the notes give the information required by the Companies Act, 1956 in the manner required and give a true and fair view,

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2011;

ii. in the case of Profit and Loss Account of the Profit for the year ended 31st March 2011; and

iii. in the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st March 2011.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF MARG LIMITED

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

b) The Company has a programme of Physical verification of Fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and no serious discrepancies have been noticed on such verification

c) During the year, the company has not disposed off a substantial part of fixed assets.

2. a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3. a) The Company has not taken any loan from parties covered in the register maintained under section 301 of the Companies Act.

b) The Company has granted unsecured loans to 79 Subsidiary companies covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs. 677.39 Crores and the year end balance of loans granted to such companies was Rs. 504.82 Crores.

c) According to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given are not prima facie, prejudicial to the interest of the company.

d) According to the information and explanations given to us, the principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies, except three subsidiaries, is repayable on call.

The Subsidiaries have made repayments during the year as and when calls were made by the Company. In respect of three subsidiaries, the loan given by the company is sub-ordinated to the secured loans from Banks and Financial Institutions availed by such subsidiaries and accordingly the obligation to repay does not arise during the pendency of said secured loans.

4. In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us the transaction in pursuance of contracts or arrangements entered in the register maintained U/s 301 of The Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at rates or value which are reasonable having regard to the prevailing market rates or values at the relevant time.

6. The Company has not accepted any deposits from the public in terms of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

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

8. We have been informed that the Central Government has not prescribed the maintenance of Cost Records under the provisions of Section 209(l)(d) of the Companies Act, 1956.

9. a) According to the records of the Company, apart from certain instances of delays, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Wealth Tax, Custom Duty, Cess, Sales Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and cess were in arrears as at 31st March 2011, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Sales Tax/Customs Duty/Cess, which have not been deposited on account of any dispute, are as follows:-

Income Tax Dues

Income Tax

Asst. Departmen Amount paid Forum where Year Demand under protest Dispute is pending

2001-02 16,785,003 16,879,719 Madras High Court

2002-03 8,926,848 9,659,367 CIT

2007-08 1,340,625 13,40,625 ITAT, Chennai

2008-09 52,76,990 52,76,990 CIT(Appeal)

Tax Deducted at Source

Asst. Departmen Amount paid Forum where Year Demand under protest Dispute is pending

1996-97 21,503 4,931 ITO-TDS

1997-98 2,368,619 2,317,682 ITO-TDS

1998-99 1,628,830 842,934 ITO-TDS

1999-00 1,857,640 581,282 ITO-TDS

2000-01 442,820 65,440 ITO-TDS

10. The Company has no accumulated losses and has no cash losses during the financial year covered by our audit and the immediately preceding financial year.

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

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees aggregating to Rs. 2277.16 Crores for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are prima facie not prejudicial to the interests of the company.

16. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company we report that no funds raised on short-term basis have been used for Long Term investment.

18. The Company has made preferential allotment of shares to parties and companies covered in the register maintained U/s 301 of the Act during the year. The price at which the shares have been issued is not prejudicial to the interest of the company.

19. During the year, the company has not issued any debentures and therefore the question of creating security or charge in respect thereof does not arise.

20. The Company has not made any public issue during the year covered under audit.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company was noticed or reported during the year.

For K RAMKUMAR & CO.,

Reg no:02830S

Chartered Accountants

R M V BALAJI

Partner

Membership no: 27476

Place: Chennai

Date : 29th August 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s MARG LIMITED as on 31st March 2010 and the annexed Profit & Loss Account and Cash Flow Statement for the year ended 31st March 2010. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to this Company.

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

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

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

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

d. According to the best of our information and explanations given to us, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the accounting standards referred to in Section 211(3C) of The Companies Act 1956, in so far as they are applicable to the Company.

e. On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director U/s 274(1)(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the accounts read with the notes give the information required by the Companies Act, 1956 in the manner required and give a true and fair view,

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2010;

ii. in the case of Profit and Loss Account of the Profit for the year ended 31st March 2010; and

iii. in the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st March 2010.

Annexure to Auditors Report referred to in paragraph 3 of Our Report of even date to the Shareholders of Marg Limited

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

b) The Company has a programme of Physical verification of Fixed assets over a period of three years which is, in our opinion, reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and no serious discrepancies have been noticed on such verification.

c) During the year, the Company has disposed off a substantial part of fixed assets, Dredger. Based on the information and explanation given by the management and on the basis of audit procedures performed by us, we are of the opinion that the sale of the said part of fixed assets has not affected the going concern status of the Company.

2. a) As explained to us, physical verification of inventory has been conducted by the management, at the end of the year.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory and the discrepancies noticed on verification between physical stocks and book stocks were not material.

3. i) The Company has granted unsecured loans to 80 Subsidiary Companies covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year was Rs. 373.25 Crores and the year end balance of loans granted to such companies was Rs.276.84 Crores.

ii) According to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given are not, prima facie, prejudicial to the interest of the Company.

iii) The principal amount of the loan along with interest in respect of loan granted to the Subsidiary Companies is repayable on call. The Subsidiaries have made repayments during the year as and when calls were made by the Company.

4. In our opinion and according to the explanation given to us there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us the transaction in pursuance of contracts or arrangements entered in the register maintained U/s 301 of The Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at rates or value which are reasonable having regard to the prevailing market rates or values at the relevant time.

6. The Company has not accepted any deposits from the public in terms of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

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

8. We have been informed that the Central Government has not prescribed the maintenance of Cost Records under the provisions of Section 209(1)(d) of the Companies Act, 1956.

9. a) According to the records of the Company, apart from certain instances of delays, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Cess, Sales Tax, Service Tax, and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and cess were in arrears as at 31st March 2010, for a period of more than six months from the date they became payable.

c) According to the records of the Company and the information and explanation given to us, the dues of Income Tax/Sales Tax/Customs Duty/Cess, which have not been deposited on account of any dispute, are as follows:- Income Tax Dues Income Tax

Asst. Department Amount Forum where Year Demand paid under Dispute is protest pending

2001 - 02 16,785,003 16,879,719 Madras High Court

2002 - 03 8,926,848 9,659,367 CIT

2007 - 08 1,340,625 - CIT

TDS

Asst. Department Amount Forum where Year Demand paid under Dispute is protest pending

1996 - 97 21,503 4,931 ITO-TDS

1997 - 98 2,368,619 2,317,682 ITO-TDS

1998 - 99 1,628,830 842,934 ITO-TDS

1999 - 00 1,857,640 581,282 ITO-TDS

2000 - 01 442,820 65,440 ITO-TDS

Sales Tax

Financial Department Amount Forum where Year Demand paid under Dispute is protest pending

2004 - 05 150,972 - Asst. Commissioner Sales Tax

2005 - 06 469,014 - Asst. Commissioner Sales Tax

2006 - 07 1,123,972 - Asst. Commissioner Sales Tax

10. The Company has no accumulated losses and has no cash losses during the financial year covered by our audit and the immediately preceding financial year.

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

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees aggregating to Rs 2017.10 Crores for loans raised by others from Banks. In our opinion, the terms and conditions of the guarantees are not prejudicial to the interests of the Company.

16. In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company we report that no funds raised on short-term basis have been used for Long Term investment. No long-term funds have been used to finance short-term assets.

18. The Company has made preferential allotment of shares to parties and companies covered in the register maintained U/s 301 of the Act during the year. The price at which shares have been issued is not prejudicial to the interest of the Company.

19. During the year, the Company has not issued any debentures and therefore the question of creating security or charge in respect thereof does not arise.

20. The Company has not made any public issue during the year covered under audit.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company was noticed or reported during the year.

For K Ramkumar & Co., Reg No: 02830S Chartered Accountants

R M V Balaji

Partner

Membership no: 27476

Place: Chennai

Date : 11th August 2010