Auditor Report of Purohit Construction Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Purohit Construction Limited. Ahmedabad, which comprise the Balance Sheet as at March, 31,2014, and the Statement of Profit and Loss for the period then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Ac- counting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular No 15/2013 dated 13th September 2013 issued by MCA 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the 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 assess- ments, the auditor considers the 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 Company''s Internal Control An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

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 March, 31,2014;

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

c) In the cash flow statement, of the cash flow for the year ended on that day.

Emphasis of the matter

1. Disputed Liability of Rs. 14.58 Lacs received as booking advance from a member, as a result of which Current Liabilities and Debtors both are overstated by that amount.

2. Valuation of inventory comprised in Work in progress in respect of the Construction Division being valued at realizable value and not construction thereof, the impact of which has not been quantified.

3. Disputed receivables of Rs. 7.38 lacs included in Current Assets. As a result of which Current Assets & Profit both are overstated by that amount.

However based on principles of materiality our report is not qualified in all the above cases.

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 The Companies Act,1956, 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 The Companies Act, 1956, 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 and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

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

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.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Purohit Construction Ltd. on the accounts of the company for the Period ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit,

We Report hereunder:

1. In respect of its Fixed Assets:

a. The company is in the process of updating its record showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the company has a regular program of physical verification of fixed assets by which fixed assets are verified in phased manner over a period three years. In our opinion this periodicity of physical verifica- tion is reasonable having regard to the size of the company and nature of its assets. We are informed that no material discrepancies were noticed on such verification.

c. The company has not disposed off major fixed assets involved in revenue generation during the period.

2. In respect of its inventories:

a. As explained to us, inventory has been physically verified by the management at regular intervals during the period. In our opinion, the frequency of such verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verifica- tion of Inventories followed by the management is reasonable and adequate having regard to size of the Com- pany and the nature of its business.

c. The company is maintaining proper records of inventory. As informed to us, no significant discrepancies have been noticed on physical verification of above stocks as compared to the book records.

3. As regards loans taken or granted loans, secured or unsecured, from or to companies, firms or other parties required to be listed in the register maintained under Section 301 of the Companies Act, 1956,

a. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loan from three parties required to be listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs.571.74 lacs (P.Y. 208.14 lacs) and the period end balance of loans taken from such parties was Rs. 502.95 lacs (RY. 138.04 lacs).

b. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not given loan to any party required to be listed in the register maintained under Section 301 of the Companies Act, 1956.

c. In our opinion, and according to the information and explanation given to us, these loans being interest free which along with other terms and conditions are prima facie not prejudicial to the interest of the company.

d. We are informed that these loans are repayable on demand and repayment of the same not being demanded; the same are not overdue.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In respect of transactions covered under section 301 of the Companies Act. 1956;

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the company is in the process of updating register in respect of the particulars of contracts or arrangements referred to in section 301 of the The Companies Act, 1956.

b. As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties required to be covered in the register maintained u/s 301 of the The Companies Act, 1956 and exceeding five lacs rupees in a financial year in respect of any such party during the period, could be consider to have been made at reasonable price in view of the terms of contracts entered into with them.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the internal audit functions are being strengthened by the company, keeping in view the nature and size of its business.

8. As per information & explanation given by the management, maintenance of cost records has not been pre- scribed by the Central Government under clause (d) of sub-section (1) of section 209 of the The Companies Act, 1956.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident Fund, Investor Educa- tion and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Cus- tom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.

b. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us, no amount payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. The Company does not have any balance of brought forward loss as at the end of the period nor has it incurred loss in the current year as well as that in the immediately preceding financial year.

11. Based on our audit procedures and on 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.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is trading in Shares, and securities and it has made regular entries in the records maintained in that respect.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the period.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at the year end. we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the company has not made any preferential allotment of shares to any companies, firm or other person, covered in the register maintained u/s 301 of the The Companies Act, 1956, during the period.

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any money by public issue during the period.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the period, nor have we been informed of such case by the management.

For GATTANI & ASSOCIATES, CHARTERED ACCOUNTANTS, FRN: 103097W,

Place: Ahmedabad Date: 24-05-2014

SHARAD R GATTANI. PARTNER. Membership No.:037999.

---

Mar 31, 2013

We have audited the accompanying financial statements of PUROHIT CONSTRUCTION LTD. Ahmedabad, which comprise the Balance Sheet as at March 31,2013 and the Statement of Profit and Loss 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 of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility :-

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 provide a basis for our audit opinion.

Opinion:-

We invite specific attention to, .

1. Disputed liability of Rs.14.58 Lacs received as booking advance from a member. As a result of which Current Liabilities arid Debtors both are overstated by that amount.

2. Valuation of inventory comprised in Work in Progress in respect of the Construction Division being valued at realizable value and not construction thereof, the impact of which has not been quantified.

Subject to the above,

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the 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 31,2013;

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

c) In the cash flow statement, of the cash flow for the year ended on that day.

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Centra! Government of India in terms of sub-section (4A)of section 227 of the The Companies Act,1956, 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 The Companies Act, 1956, 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 and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in sub section (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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Purohit Construction Ltd. on the accounts of the company for the year ended 31st March, 2013. -

On the basis of such checks as we considered appropriate and according to the information and ' explanation given to us during the course of our affdit, We Report hereunder:

1. In respect of its Fixed Assets:

a. The company is in the process of updating its record showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the company has a regular program of physical verification of fixed assets by which fixed assets are verified in phased manner over a period three years. In our opinion this periodicity of physical verification is reasonable having regard to the size of the company and nature of its assets. We are informed that no material discrepancies were noticed on such verification.

c. The company has not disposed off major fixed assets involved in revenue generation during the year.

2. In respect of its inventories:

a As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of Inventories followed by the management is reasonable and adequate having regard to size of the Company and the nature of its business.

c. The company is maintaining proper records of inventory. As informed to us, no significant discrepancies have been noticed on physical verification of above stocks as compared to the book records.

3. As regards loans taken or grantee! loans, secured or unsecured, from or to companies, firms or other parties required to be listed in the register maintained under Section 301 of the Companies Act, 1956,

a. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loan from three party required to be listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.208.14 (P.Y. 148.23) and the year end balance of loans taken from such parties was Rs. 138.04 lacs (P.Y. 5.31 lacs).

b. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has given loan to one party required to be listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 131.38 Lacs (P.Y. 166.38 lacs) and the year end balance of loans given to such parties was Rs. 127.75 lacs (P.Y. 131.38 lacs).

c. In our opinion, and according to the information and explanation given to us, these loans being interest free which along with other terms and conditions are prima facie not prejudicial to the interest of the company.

d. We are informed that these loans are repayable on demand and repayment of the same not being demanded; the same are not overdue.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and paym^it for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In respect of transactions covered under section 301 of the Companies Act. 1956;

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the company is in the process of updating register in respect of the particulars of contracts or arrangements referred to in section 301 of the The Companies Act, 1956.

b. As per information & explanations given to us and in our opinion,-the transaction entered into by the company with parties required to be covered in the register maintained u/s 301 of the The Companies Act, 1956 and exceeding five lacs rupees in a financial year in respect of any such party during the year, could be consider to have been made at reasonable price in view of the terms of contracts entered into with them,

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company does not have an internal audit system.

8. As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the The Companies Act, 1956.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. .

b. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us, no amount payable in respect of income tax, wealth tax, service tax, sales tax. customs duty and excise duty which'have not been deposited on account of any disputes except the following :

Nature of Financial Demand Authority where Date of Demand Year (Rs) appeal is pending Filing Appeal

Income Tax 2009-10 14,89,100 Clf(A)XI, Ahmedabad 20/03/2013

10. The Company does not ha ve any balance of brought forward loss as at the end of the year not has it incurred loss in the current year as well as that in the immediately preceding financial year.

11. Based on our audit procedures and on 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.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

14. 'According to information and explanations given to us, the Company is trading in Shares, and securities and it has made regular entries in the records maintained in that respect.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at the year end. we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures' performed Snd the information and explanations given to us by the management, we report that the company has not made any preferential allotment of shares to any companies, firm or other person, covered in the register maintained u/s 301 of the The Companies Act, 1956, during the year.

19. The Company has no outstanding debentures during the period under audit. '

20. The Company ha*not raised any mongy by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For GATTANI & ASSOCIATES Chartered Accountants FRN: 103097W

PLACE : AHMEDABAD SHARAD GATTANI DATE : 25/07/2013 Partner Membership No. 37999