Auditor Report of Petron Engineering Construction Ltd.

Mar 31, 2016

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these 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 audit opinion on the financial statements.

Basis for qualified Opinion

Attention is drawn to:

i. Note no. 32 in respect of certain suspended / delayed contracts as of 31st March, 2016 , trade receivables of Rs.1,923 lacs (net of mobilization advance of Rs.2,934 lacs) ( FY ended 31st March 2015 Rs.1,501 lacs net of mobilization advance of Rs.4,240 lacs) and unbilled revenue of Rs.6,256 lacs (FY ended 31st March 2015 Rs.7,756 lacs) receivables from customers are pending confirmation/ negotiation; trade payables w.r.t. these stated customers aggregated to Rs.819 lacs (FY ended 31st March 2015 Rs.1,323 lacs) are subject to negotiation/ confirmation, where we are unable to comment on the same and its corresponding impact on profit and assets/liabilities as at that date. This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March 2015.

ii. Note no. 33 (a), the company has recognized revenue of Rs.1,353 lacs during earlier periods (till 31st March 2015 Rs.2,555/- lacs) on account of cost overruns on certain contracts, pending acceptance / confirmation from customers and our inability to comment on the amounts ultimately receivable in respect of these contracts and its impact on the reported profit for the year ended 31st March'' 2016 and corresponding assets as on date. This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March'' 2015.

iii. Note no. 33 (b) regarding recognition revenues of Rs.1,621 lacs (till 31st March 2016 Rs.2,922 lacs) during the year ended 31st March 2016, on account of cost overruns on certain contracts, which are not in accordance with the principles set out in the Accounting Standards AS-7 ''Construction Contracts''. Accordingly the Revenue and profit for the year ended 31st March2016 is higher by Rs.1621 lacs and also balance in retained earnings and unbilled revenue balance as at 31st March 2016 is higher by Rs.2,922 lacs (as at 31st March 2015 by Rs.1,301 lacs). This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March 2015.

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

Emphasis of Matters

Attention is drawn to note no. 43 (b):

The balances of certain trade receivable, other liabilities and loan & advances are subject to confirmation/reconciliation, where the management is confident that there will not be any material impact on confirmation /reconciliation on profit for the year.

Our opinion is not modified in respect of matter stated above.

Report on Other Legal and Regulatory Requirements

1. A s 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure ''A'' a statement on the matters specified in the paragraphs 3 and 4 of the Order.

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

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

(b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

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

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014;

(e) The matters described in the basis for qualified Opinion 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 on31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) As required by section 143(3)(i) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our report on the Internal Financial Controls over Financial Reporting is as per Annexure ''B'';

(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 no. 31 and Note No. 35 to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any; on long-term contracts including derivative contracts - Refer Note No. 7 to the financial statements. The Company does not have any derivative contracts for which there were any material foreseeable losses;

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

Annexure-A referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date on the Standalone Financial Statements of Petron Engineering Construction Ltd. for the year ended 31st March, 2016

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

(b) The Company has a regular programme of Physical Verification of its Fixed assets by which fixed asset are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Ts per the records and information and explanations given to us, title deeds of immovable properties are in the name of the Company.

2. T he inventories of the Company, have been physically verified by the management at reasonable intervals and the procedures of physical verification of inventory followed by the Management are reasonable in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. According to the records and information and explanations made available to us, the Company has not granted any loans, secured or unsecured to companies, firms, LLP and other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, the Company has not granted any loans, investments, guarantees and security; accordingly, the provisions of Clause 3(iv) of the Order are not applicable.

5. In According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Section 73 to76 of the Act or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other tribunal in this regard.

6. W e have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Act, related to the manufacture of Machinery and Mechanical appliances and parts thereof and execution of projects having application of Mechanical Engineering, Fabrication, Construction and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7. a) According to the records of the Company, undisputed statutory dues including income tax, custom duty, excise duty and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been delay in some cases of tax deducted at source, provident fund, employees'' state insurance, service tax and sales-tax and there were no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2016. However, there was one instance where provident fund amounting to Rs.42,14,889/- was paid post resolution of technical issues with delay of 4 days.

b) According to the records and information & explanations given to us, there are no dues in respect of Wealth Tax, Duty of Custom that have not been deposited with the appropriate authorities to the extent applicable on account of any dispute and the dues in respect of Service Tax, Duty of Excise, Income Tax, VAT or cess that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below: -

Name of Statute	Nature of Dues	Period	Amount (in Rs.)	Forum where dispute is pending
Finance Act, 1994	Service Tax	2005-09	4,68,22,758	CESTAT, Ahmedabad
Finance Act, 1994	Service Tax	2007-08	251,566	Deputy Commissioner (Appeals) Central Excise, Panipat
Finance Act, 1994	Service Tax	2008-09	184,672	Commissioner (Appeals) of Central Excise, Haldia
Finance Act, 1994	Service Tax	2006-07	2,475,194	CESTAT, New Delhi
Central Excise Act, 1944	Excise Duty	2001-02	252,640	CESTAT, Navi Mumbai
Central Excise Act, 1944	Excise Duty	2004-05	219,156	CESTAT, Vadodara

Name of Statute	Nature of Dues	Period	Amount (in Rs.)	Forum where dispute is pending
Central Sales Tax, 1956	Central Sales Tax	2006-07	807,261	Joint Commissioner Sales Tax, West Bengal
Bombay Sales Tax Act, 1959	Sales Tax	2004-05	169,822	Joint Commissioner of Sales Tax (Appeals)
West Bengal Value Added Tax	VAT	2007-08	2,589,556	Joint Commissioner of Commercial Taxes
West Bengal Value Added Tax Act, 2003	VAT	2009-10	17,483,088	Joint Commissioner of Sales Tax
Central Sales Tax (West Bengal) Rules, 1958	Central Sales Tax	2009-10	1,514,805	Joint Commissioner of Sales Tax
West Bengal Value Added Tax Act, 2003	VAT	2010-11	16,694,017	Joint Commissioner of Sales Tax
Building and Other Construction Workers'' Welfare Cess Act, 1996	Labour Welfare Cess	2007-08	3,970,102	Bihar Building and Other Construction Workers'' Welfare Board
Income Tax Act, 1961	Income Tax	2011-12	264,790	Commissioner of Income-tax (Appeals), Mumbai
Orissa Value Added Tax, 2004	VAT	2002-03	244,655	Sales Tax Authority, Angul, Orissa
Income Tax Act, 1961	Income Tax	2009-10	29,048,080	Comm. of Income Tax (Appeals), Mumbai

(This is to be read with Note No.35)

8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us and based on the confirmation received, the Company has not defaulted in repayment of loans and borrowings to banks. The company did not have any outstanding dues in respect of debentures, financial institutions and government (both State and Central) during the year.

9. On the basis of information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The company did not raise any money by way of initial / further public offer.

10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.

11. On the basis of records and information and explanations made available and based on our examination of the records of the company, the company has paid/ provided managerial remuneration, in accordance with the requisite approvals mandated under Section 197 read with Schedule V of the Act.

12. The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 3 (xii) of the said Order are not applicable to the Company, hence we are not offering any comment.

13. As per the information and explanations and records made available by the management of the Company and audit procedure performed, for the related parties transactions entered during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable. As explained and as per records / details the related parties transactions have been disclosed as per the applicable Accounting Standards.

14. According to the information and explanations given to us, the Company has not made any preferential allotment of shares or fully / partly convertible debentures during the year in terms of provisions of Section 42 of the Act.

15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, as the provision of section is not applicable to the Company.

For LODHA & CO.,

Chartered Accountants

Firm''s Registration No. 301051E

N.K. Lodha

Place: New Delhi Partner

Date: 31st May,2016 Membership No.085155

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Mar 31, 2015

We have audited the accompanying financial statements of Petron Engineering Operations Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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

The Company's Board of Directors is responsible for the maters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards 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 of 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 the design, implementation and maintenance of adequate internal financial control 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 financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and maters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Basis for Qualified Opinion

a) We report that in respect of certain contracts, as at March 31, 2015, trade receivables and unbilled revenue of Rs. 1,501 Lacs (net of provisions and mobilization advance of Rs. 4,240 Lacs) and Rs. 7,756 Lacs respectively are doubtful of recovery as the said contracts are under suspension or are delayed and the balances receivable from the customers are subject to final confirmation due to pending negotiations. Similarly, the trade payables to vendors in respect of the above mentioned suspended contracts as recorded in the books aggregating Rs. 1,323 Lacs are also subject to negotiations and final confirmation. In the absence of such confirmations and pending final outcome of the negotiations, we are unable to comment upon the amounts ultimately receivable/payable in respect of this contract and the consequential impact on the reported profit for the year ended March 31, 2015 and corresponding assets and liabilities as at that date. Our Audit Report on the financial statements for the year ended March 31, 2014 was also modified in respect of the above mater.

b) We report that the Company has recognized revenue of Rs. 2,555 Lacs (during earlier periods) on cost overruns arising due to design changes and delay in completion on certain contracts, without change orders/customer acceptance in respect of the same. Due to the uncertainty over ultimate collection and recoverability of the said amounts, we are unable to comment on the amounts ultimately receivable in respect of these contracts including consequential adjustments that may be required in this regard and consequential impact on the reported profit for the year ended March 31, 2015 and corresponding assets as at that date. Our audit report on the financial statements for the year ended March 31, 2014 was also modified in respect of the above mater.

c) We report that the Company has recognized revenues of Rs. 1,301 Lacs during the year ended March 31, 2015 on cost overruns arising due to design changes, contract interpretation issues and delay in completion on certain contracts, which in our opinion, should not have been recognized because they are not in accordance with the revenue recognition principles set out in the Accounting Standard AS 7 Operations Contracts. Accordingly the revenue, profit and unbilled revenue balance as of and for the year ended March 31, 2015 would be lower by Rs. 1,301 Lacs.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the maters described in sub-paragraphs (a) and (b) of the Basis for Qualified Opinion paragraph above and except for the effects of the mater described in sub-paragraph (c) of the Basis for Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of Affairs of the Company as at March 31, 2015, of its profit and its cash flows for the year ended on that date.

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 1, a statement on the maters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and except for the maters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) Except for the effects of the maters described in the Basis for Qualified Opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examinaton of those books;

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

(d) Except for the effects of the mater described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) The maters described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functoning of the Company;

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial positon in its financial statements – Refer Note 31 and Note 35 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 7 to the financial statements. The Company does not have any derivative contracts for which there were any material foreseeable losses;

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

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

Re: Petron Engineering Operations Limited ('the Company')

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified by the management during the year and no material discrepancies have been noticed on such verification.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. However, the internal control system for cost estimation process needs to be strengthened in order to correct variances in costs estimated and costs subsequently incurred, to make it commensurate with the size and nature of the operations of the Company. In our opinion, this is a continuing failure to correct a major weakness in the internal control system.

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act, related to the manufacture of Machinery and Mechanical appliances and parts thereof and execution of projects having application of Mechanical Engineering, Fabrication, Operations and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including income-tax, wealth tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been serious delays in large number of cases of tax deducted at source, provident fund, employees' state insurance, service tax and sales-tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Name of the Statute Nature of Dues Year Amount (Rs. In Lacs)

Finance Act, 1994 Service Tax (net of Rs 24 2004-06 71 Lacs paid)

Finance Act, 1994 Service Tax (net of Rs 61 2005-09 428 Lacs paid)

Finance Act, 1994 Service Tax 2007-08 3

Finance Act, 1994 Service Tax 2008-09 2

Finance Act, 1994 Service Tax (net of Rs 2006-07 25 0.98 Lacs paid)

Name of Statute Forum where dispute is pending

Finance Act,1994 Commissioner of Customs, Central Excise and Service Tax, Rohtak

Finance Act.1994 CESTAT,Ahmedabad

Finance Act,1994 Deputy Commissioner (Appeals) Central Excise, Panipat

Finance Act,1994 Commissioner (Appeals) of Central Excise, Haldia

Finance Act,1994 Joint Commissioner of Customs, Central Excise and Service Tax, Bhopal

Name of Statute Nature of Dues Year Amount (Rs.In Lacs)

Central Excise Act, Excise Duty (net of Rs 2001-02 3 1944 0.50 lacs paid)

Central Excise Act, Excise Duty (net of Rs 2004-05 2 1944 1.69 Lacs paid)

Central Sales Tax, Central Sales Tax 2006-07 8 1956

Bombay Sales Tax Sales Tax (net of Rs 2.35 2004-05 2 Act, 1959 Lacs paid)

West Bengal Value VAT 2007-08 26 Added Tax Act, 2003

West Bengal Value VAT 2009-10 182 Added Tax Act, 2003

Rajasthan Entry Tax - VAT (net of Rs 4.89 Lacs 2008-09 8 Goods Act, 2003 paid)

Central Sales Central Sales Tax 2009-10 15 Tax (West Bengal) Rules, 1958

West Bengal Value VAT 2010-11 167 Added Tax Act, 2003

West Bengal Value VAT 2011-12 3 Added Tax Act, 2003

Building and Other Labour Welfare Cess 2007-08 40 Constructon Workers' Welfare Cess Act, 1996

Income Tax Act,1961 Income Tax 2011-12 3

Income Tax Act,1961 Tax Deducted at Source 2006-11 39

Name of Statute Forum Where dispute is pending

Central Excise Act, CESTAT, Navi Mumbai 1944

Central Excise Act, CESTAT, Vadodara 1944

Central Excise Act, Deputy Commissioner Sales Tax, 1956 West Bengal

Bombay Sales Tax Joint Commissioner of Sales Tax Act,1959 (Appeals)

West Bengal Value Addded Tax,2003 Joint Commissioner of Commercial Taxes

West Bengal Value Added Tax,2003 Joint Commissioner of Sales Tax

Rajastan Entry Tax- Deputy Commissioner (Appeals) Goods Act,2003 Sales Tax, Kota

Central Sales Tax Joint Commissioner of Sales Tax Act(West Bengal) Rules,1958

West Bengal Value Added Tax Act,2003 Joint Commissioner of Sales Tax

West Bengal Value Added Tx Act,2003 Commissioner (Appeals) Sales Tax, West Bengal

Building and Other Bihar Building and Other Operations Operations Workers' Welfare Worker's Welfare Board Cess Act,1996

Income Tax Act,1961 Commissioner of Income-tax (Appeals), Mumbai

Income Tax Act,1961 Commissioner of Income-tax (Appeals), Mumbai

(d) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) Without considering the consequential effects, if any, of the maters stated in paragraph (a), (b) and (c) of the Basis of Qualified Opinion paragraph in our auditors' report, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding fnancial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, there have been 8 instances of delays in repayment of dues to a bank aggregating to Rs. 494 Lacs (delays ranging from 03 to 30 days). The delays observed were for the period up to September 30, 2014 and dues have been fully paid by the Company before September 30, 2014. The Company did not have any outstanding dues in respect of a financial institutions or debentures during the year.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E

per Shyamsundar Pachisia

Partner Mumbai, 13 July 2015 Membership Number: 49237

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Mar 31, 2014

We have audited the accompanying financial statements of Petron Engineering Construction Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a Summary of significant 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 accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. 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 entity''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.

Basis for Qualified Opinion

a) We report that in respect of a contract, as at March 31, 2014, trade receivables (net of mobilization advance of Rs. 2,926 Lacs), unbilled revenue and trade payables of Rs. 1,267 Lacs, Rs. 6,256 Lacs and Rs. 1,826 Lacs respectively, are subject to final confirmation as the said contract is under negotiation. In the absence of such confirmations and pending final outcome of the negotiations, we are unable to comment upon the amounts ultimately receivable/payable in respect of this contract and the consequential impact, if any, on the reported profit for the year ended March 31, 2014 and corresponding assets and liabilities as at that date. Our Audit Report on the financial statements for the year ended March 31, 2013 was also modified in respect of the above matter.

b) The Company has recognised revenue and receivables of Rs. 3,811 Lacs on certain projects arising out of design changes and/or scope variations for which acceptances by the clients are awaited. The amount of such acceptances cannot therefore be measured reliably. In the absence of sufficient appropriate audit evidence regarding the extent to which such claims /scope variations will be accepted by the clients, we are unable to comment on the appropriateness of such revenues as recorded in the financial statements, the amounts that will be ultimately realised and the consequential impact, if any, on the reported profit for the year ended March 31,2014 and corresponding assets and liabilities as at that date.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in sub paras (a) and (b) of the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Companies Act, 1956 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

(a) We draw attention to Note X in the financial statements, which describes the uncertainty related to the outcome of the winding up petition filed against the Company by a vendor, more fully described therein. Our opinion is not qualified in respect of this matter.

(b) We draw attention to Note XI in the financial statements, which discusses liquidity issues being faced by the Company and management''s plan and other mitigating factors to counter these issues. These conditions, along with other matters as set forth in aforesaid note, indicate the existence of a material uncertainty that may cast a doubt about the Company''s ability to continue as a going concern. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government 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) Except for the matters described in sub paras (a) and (b) of the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;

(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 Act.

Annexure referred to in paragraph 1 under the heading "Report on other Legal and regulatory requirements" of our report of even date Re: Petron Engineering Construction Limited (''the Company'')

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

(b) ALL fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(e) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. However, the internal control system for cost estimation process needs to be strengthened in order to correct variances in costs estimated and costs subsequently incurred, to make it commensurate with the size and nature of the operations of the Company. In our opinion, this is a major weakness in the internal control system.

(v) (a) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

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

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Act, related to the manufacture of Machinery and Mechanical appliances and parts thereof and execution of projects having application of Mechanical Engineering, Fabrication, Construction and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Undisputed statutory dues including income-tax, wealth tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been slight delays in few cases of tax deducted at source.

Undisputed statutory dues including provident fund, employees'' state insurance, service tax and sales-tax have not been regularly deposited with the appropriate authorities and there have been some delays in few cases of sales tax and serious delays in large number of cases of provident fund, employees'' state insurance and service tax. There are no dues payable on account of Investor Education and Protection Fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Statute Nature of Dues Year Amount (Rs)

Finance Act, 1994 Service Tax (net of 2004-06 7,132,888 Rs. 2,377,625 paid)

Finance Act, 1994 Service Tax (net of 2005-09 42,759,239 Rs. 6,063,519 paid)

Finance Act, 1994 Service Tax 2008-09 184,672

Finance Act, 1994 Service Tax 2006-07 2,626,200

Central Excise Excise Duty (net of 2001-02 252,640 Act, 1944 Rs. 50,000 paid)

Central Excise Excise Duty (net of 2004-05 388,314 Act, 1944 Rs. 169,156 paid)

Central Excise Excise Duty 2009-11 157,946 Act, 1944

Central Sales Central Sales Tax 2006-07 807,261 Tax, 1956

Maharashtra Work Contract Tax 2003-04 323,573 Value Added Tax Act, 2002

Bombay Sales Sales Tax (net of 2004-05 169,822 Tax Act,1959 Rs. 235,000 paid)

West Bengal VAT 2007-08 2,589,556 Value Added Tax Act, 2003

Rajasthan Entry VAT (net of 2008-09 773,244 Tax -Goods Rs. 489,396 paid) Act, 2003

West Bengal VAT 2009-10 18,178,990 Value Added Tax Act, 2003

Central Sales Central Sales Tax 2009-10 1,514,805 Tax (West Bengal) Rules, 1958

West Bengal VAT 2010-11 16,694,016 Value Added Tax Act, 2003

Building and Other Labour Welfare Cess 2007-08 3,970,102 Construction Workers'' Welfare Cess Act, 1996

Income Tax Income Tax 2010-11 2,137,074 Act,1961

Income Tax Tax Deducted at 2006-11 952,344,432 Act, 1961 Source

Name of the Statute Forum where dispute is pending

Finance Act, 1994 Commissioner of Customs, Central Excise and Service Tax, Rohtak

Finance Act, 1994 CESTAT, Ahmedabad

Finance Act, 1994 Commissioner (Appeals) of Central Excise, Haldia

Finance Act, 1994 Joint Commissioner of Customs, Central Excise and Service Tax, Bhopal

Central Excise CESTAT, Navi Mumbai Act, 1944

Central Excise CESTAT, Vadodara Act, 1944

Central Excise Appellate Tribunal, Ahmedabad Act, 1944

Central Sales Deputy Commissioner Sales Tax, West Tax, 1956 Bengal

Maharashtra Joint Commissioner of Sales Tax Value Added (Appeals) Tax Act, 2002

Bombay Sales Joint Commissioner of Sales Tax Tax Act,1959 (Appeals)

West Bengal Joint Commissioner of Commercial Value Added Taxes Tax Act, 2003

Rajasthan Entry Deputy Commissioner (Appeals) Sales Tax -Goods Tax, Kota Act, 2003

West Bengal Joint Commissioner of Sales Tax Value Added Tax Act, 2003

Central Sales Joint Commissioner of Sales Tax Tax (West Bengal) Rules, 1958

West Bengal Joint Commissioner of Sales Tax Value Added Tax Act, 2003

Building and Other Bihar Building and Other Construction Construction Workers'' Welfare Board Workers'' Welfare Cess Act, 1996

Income Tax Commissioner of Income-tax Act,1961 (Appeals), Mumbai

Income Tax Commissioner of Income-tax Act, 1961 (Appeals), Mumbai Source

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has delayed repayment of dues to financial institutions and banks during the year and Rs. 2,870,685 of such dues were in arrears as on the balance sheet date. Following are the details of such delays:

Particulars Delays 1- 60 days No. of instances of delays

Term Loan (INR) 34,305,798 14

Interest Liability (INR) 42,130,105 25

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

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

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

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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

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

(xx) According to the information and explanations given to us, the Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Co. LLP Chartered Accountants ICAI Firm Registration Number: 301003E

per Hemal Shah Partner Mumbai, May 29, 2014 Membership Number: 42650

---

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

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 auditopinion.

Basis for Qualified Opinion

We report that as at March 31,2013 Trade receivables of Rs. 1,278 Lacs (net of mobilization advance of Rs. 2,926 Lacs), unbilled revenue, being dues receivable from a customer amounting to X 6,256 Lacs and trade payables of Rs. 1,866 Lacs relating to a contract, are subject to final confirmation from the respective parties as the matter is under negotiation. In the absence of such confirmations and pending final outcome of the negotiations, we are unable to comment upon the amounts ultimately receivable/payable in respect of this contract and the consequential impact, if any, on the reported profit for the year ended March 31,2013 and corresponding Assets and Liabilities as at that date.

Qualified opinion

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

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

b) in the case of the Statement of Prof it and Loss, of the profit/loss for the yea r ended on that date; and

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

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 forthe purpose of ouraudit;

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) Except for the matter described in the Basis for Qualified Opinion paragraph, In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

¦ Annexure referred to in paragraph 3 of our report of even date Re: Petron Engineering Construction Limited (''the Company'')

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

b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) There was no disposalof a substantial part of fixed assets during the year.

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

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

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed onphysicalverification.

(iii) a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

b) The Company had taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 84,488,118 and the year-end balance of loan taken from such party was Rs. 14,247,601.

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

d) The loan taken is re-payable along with interest on demand. As informed, the lenders have not demanded repayment of any such loan during the year, thus, there has been no default on the part ofthe company.

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

(v) a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

b) None of the transactions made in pursuance of such contracts or arrangements exceed the value of Rupees five lakh in respect of any one such party in the financialyear.

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

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956, related to the manufacture of Machinery and Mechanical appliances and parts thereof z execution of projects having application of Mechanical Engineering, Fabrication, Construction and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of thesame.

ix) a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other materialstatutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax , wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding f inancialyear.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bankor debenture holders.

(xii) According to the information and explanations given to us and based on the documents and recordsproduced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in ortrading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bankorfinancial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied forthe purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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

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

(xx) According to the information and explanations given to us, the Company has not raised any money through public issue during theyear.

(xxi) Based upon the audit procedures performed forthe purpose of reporting the true and fair view of thefinancialstatementsand as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during theyear.

For S.R. Batliboi and Co. LLP

Firm registration number: 301003E

Chartered Accountants

per Hemal Shah

Partner

Membership no.: 42650

Mumbai, May 29, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Petron Engineering Construction Limited ('the Company') as at March 31, 2012 and also the Statement of profit and loss and the cash flows statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph k and 5 of the said Order.

The balances of the Trade payables are in the process of confirmation/reconciliation. Consequently we are unable to comment on the carrying values of these balances as recorded in these financial statements and accordingly the impact of the consequential adjustments, if any, on the Profit and Assets/Liabilities cannot be ascertained.

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

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit, except for our comments on paragraph 4 above relating to information in respect of pending balances confirmation/reconciliation.

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

iii. The balance sheet, Statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, Statement of profit and loss and cash flows statement dealt with by this report comply with the accounting standards referred to in sub-section [30 of section 211 of the Companies Act, 1956, except for comments in paragraph 4 above;

v. On the basis of the written representations received from all the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the director are disqualified from being appointed as a director in any other public company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts except for the possible effect of the matter in paragraph A, give the information required by the Companies Act, 1956, in the manner so required and, give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

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

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

*ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE* Re: Petron Engineering Construction Limited ('the Company')

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

b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

c) There was no disposal of a substantial part of fixed assets during the year.

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

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

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii] a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

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

v) a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lacs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

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

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )ld) of the Companies Act, 1956, related to the manufacture of Machinery and Mechanical appliances and parts there of and execution of projects having application of Mechanical Engineering, Fabrication, Construction and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix) a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee's state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess 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 provident fund, investor education and protection fund, employee's state insurance, income tax , wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of Dues Year Statute

Bombay Sales tax act, Work Contract Tax 2003-04 1959

Bombay Sales tax act, Sales Tax 2004-05 1959

Central Sales Tax Central Sales Tax 2006-07 (West Bengal) Rules, 1958

Kolkata Sales Tax Act Sales Tax 2007-08

Uttar Pradesh Sales Sales Tax 2002-04 Tax Act

Central Sales Tax 2002-04

Entry Tax 2003-04

Central Excise Act Excise Duty 2001-02

Excise Duty 2004-05

Finance Act, 1994 Service Tax 2004-05

Service Tax 2008-09

Income Tax Act, Tax deducted at 2006-11 1961 source



The Building and Other Worker Welfare Cess 2007-08 Construction Workers Welfare Cess Act, 1996

Worker Welfare Cess 2007-08

Maharashtra Value Added Value Added Tax 2005-08 Tax Act, 2002

Central Sales Tax Act, Central Sales Tax 2005-08 1956



Name of the Amount Forum where dispute Statute is pending

Bombay Sales tax, act 323,573 Joint Commissioner of 1959 Sales Tax (Appeals)

Bombay Sales Tax 169,822 Joint Commissioner of 1959 Sales Tax (Appeals)

Central Sales Tax 807,261 Deputy Commissioner of (West Bengal) Rules,1958 Sales Tax

Kolkata Sales Tax Act 2,589,556 Joint Commissioner of Commercial Tax

Uttar Pradesh Sales 6,368,000 Assistant Commissioner Tax Act of Sales Tax

20,000 Assistant Commissioner of Sales Tax

20,500 Assistant Commissioner of Sales Tax

Central Excise Act 640,954 CESTAT

Finance Act,1994 7,842,788 Commissioner, Central Excise, Rohtak

622,703 Deputy Commissioner of Central Excise & Service Tax Division, Sitapur

Income Tax Act,1961 952,344,432 Commissioner of Income Tax (Appeals)

The Building and other 3,970,102 Bihar Building & Other Construction Workers Welfare Board Construction Workers Welfare Board

*24,073,648 High Court (Madhya Pradesh)

Maharashtra Value Added 39,388,724 Deputy Commissioner Tax Act,2002 (Large Tax Payer Unit) Sales Tax

Central Sales Tax Act, 33,544,370 Deputy Commissioner 1956 (Large Tax Payer Unit) Sales Tax

* Includes amount paid under Protest Rs. 22,421,066

x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

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

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained undersection301 of the Companies Act, 1956.

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

xx) According to the information and explanations given to us, the Company has not raised any money through public issue during the year.

xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Co.

Firm Registration No.: 301003E

Chartered Accountants

per Hemal Shah

Partner

Membership no.: 42650

Mumbai, 18th May, 2012

---

Mar 31, 2011

We have audited the attached Balance Sheet of PETRON ENGINEERING CONSTRUCTION LIMITED, as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting, the amounts and 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.

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure, a Statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) As per the information and explanations given to us and written representations received from the directors of the Company, we report that none of the Directors of the Company is disqualified as on 31st March 2011 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) Without qualifying our report, we draw attention to note no. B20(c) of schedule 21 regarding pending approval of the Central Government for managerial remuneration paid in earlier years as stated in the said note.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with accounting policies and note no. B8 of schedule 21 regarding inclusion of service tax as part of the revenue as stated in the said note, and read together with other notes to accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our Report of even date of PETRON ENGINEERING CONSTRUCTION LIMITED for the year ended 31st March 2011)

i) a) The Company has maintained proper records in respect of fixed assets showing full particulars including quantitative details and situation of fixed assets except in respect of certain fixed asset acquired during the year where the same is in process of updation.

b) As explained to us, certain fixed assets have been physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. As explained, reconciliation of the book records and the physical assets has been done and there is no material discrepancy.

c) As per the records and information and explanations given to us, Fixed Assets disposed off during the year were not substantial.

ii) a) As explained to us, inventories have been physically verified by the Management at reasonable intervals.

b) In our opinion, 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) On the basis of our examination of the records of the Company, we are of the opinion that the Company is maintaining proper records of inventory (read with note no. B9 of schedule 21). The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

iii) a) According to the information and explanation given to us, the company has not granted any loans, secured or unsecured loan to companies, firms or other parties as covered in the register maintained u/s 301 of the Act. Accordingly, the clause 4 (iii) (b) to (d) of the order are not applicable.

b) The Company has not taken secured or unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Maximum outstanding balance during the year was Rs. 2,120 Lacs and year end balance was Nil pertains to loans taken in the previous year.

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which aforesaid loan has been taken are not, prima facie, prejudicial to the interest of the company.

d) The repayment of principal amounts and interest during the year is as per stipulations.

iv) In our opinion and according to the information and explanations given to us, certain items purchased/ sold/ services rendered are of special nature for which, as explained, suitable alternative sources, do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services (read with note no. B7(a) & B9 of schedule 21). Further, on the basis of examinations of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have been we informed of any instance of major weaknesses in aforesaid internal control systems.

v) a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in 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, read with our comment in para (iv) above, transactions made in pursuance of contracts and arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A, 58AA and rules framed there under and the directives issued by Reserve Bank of India and other relevant provision of the Act. We have been informed that no order has been passed by the Company Law Board or National Company law Tribunal or the Reserve bank of India or any Court or any other Tribunal in this regard.

vii) In our opinion, the Companys internal audit system is commensurate with the size of the company and nature of its business.

viii) To the best of our knowledge and as explained to us, the Central Government has not prescribed the maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956.

ix) a) in our opinion, and according to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess and other material Statutory dues to the extent applicable with the appropriate authorities. On the basis of audit procedures followed, test checks of the transactions and the representations from the Management there are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable as at 31st March.

b) According to the records and information and explanations given to us, there are no dues in respect of Custom Duty and Wealth Tax that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Service Tax, Excise Duty, Income Tax & Cess that have not been deposited with the appropriate authorities on account of dispute and the Forum where the dispute is pending are given below:

Name of Statute Nature of Year Amount Forum where dispute the dues (Rs.) is pending

Orissa Sales Sales Tax 2004-05 2,096,675 Deputy Commissioner Tax Act of Sales Tax (Appeals)

Tamilnadu General Sales Tax 2002-04 2,130,150 High Court (Chennai)

Bombay Sales Sales Tax 2003-04 493,395 Joint Commissioner Tax Act of Sales Tax (Appeals) 2006-07 100,000 Asst. Commissioner of Sales Tax

Kolkata Sales Sales Tax 2006-08 3,396,817 Joint Commisioner Tax Act of Commercial Tax

Uttar Pradesh Sales Tax 2002-04 3,757,602 Asst. Commissioner Sales Tax of Sales Tax

Central Excise Excise 2001-02 Act Duty 640,954 CESTAT 2004-05

Finance Act, Service 2004-06 7,132,888 Commissioner, Central 1994 Tax Excise, Rohtak 2008-09 622,703 Dy. Commissioner, of Central Excise & Service Tax Division, Sitapur

Income Tax Act, Income 2006-09 765,840,340 Commissioner of 1961 Tax income Tax (Appeals)

The Building and Worker 2007-08 3,970,102 Bihar Building & Other Construct- Welfare Other Construction ion Workers Cess Workers Welfare Board Welfare Cess 2007-08 23,475,514 High Court Act, 1996 (Madhya Pradesh)

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

xi) In our opinion, on the basis of audit procedure and on the basis of information and explanation given to us, the Company has not defaulted in repayment of dues to financial institutions or banks.

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

xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of the Order is not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Order is not applicable to the Company.

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

xvi) In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the Company were applied for the purpose for which the loans were obtained where such end use has been stipulated by the lender.

xvii) According to the information and explanations given to us and on an overall examination of financial statements of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of usages of funds, we are of the opinion that, prima facie, as at the close of the year, short term funds have not been utilized for long term purposes.

xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under Section 301 of the Act during the year.

xix) Based on the examination of the documents and records made available and information and explanations given to us, the Company has not issued any debentures during the year.

xx) The Company has not raised money through public issue during the year.

xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management, no material fraud on or by the Company has been noticed or reported during the course of our audit nor we have been informed about any such instance.

For LODHA & CO., Chartered Accountants FRN-301051E

N.K. Lodha Partner Membership No. 85155

New Delhi, 17th May, 2011