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Auditor Report of Shah Construction Company Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Shah Construction Company Limited (''the Company'') which comprise the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and cash flow statement for the year ended on that date and 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 Accounting Standards notified under the Companies Act,1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to PARAGRAPH 3 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" below, 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 31stMarch 2014;

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

c) In the case of the Cash Flow Statement, of the 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, 2003 ("the Order"), as amended, 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 and Statement of Profit and Loss and Cash flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, subject to Note 26(iv) regarding valuation of Current Assets, Current Liabilities and Loans in Foreign currency at the rate Prevailing as on 30-06-1984, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with Accounting Standards notified under the Companies Act,1956 (the Act) read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013.

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

3. Attention is also invited to the following notes in Note "27"

a. Note No. 23 : Unascertained profit of Joint Venture.

b. Note No. 24 : Sale of land at Amboli Andheri (W)

c. Note No. 26: (iii) : Delay in realization of Foreign Assets book Value Rs. 19,16,10,755/-

d. Note No.26 (iv) : Difference in Loans, Assets & liabilities arising due to adoption of rate of exchange as on 30/06/1984.

e. Note No. 26: (v) : Old & disputed outstanding amounting to Rs.5,46,107/-(Previousyear Rs. 5,54,532/-)

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:-

a) The Company has maintained proper records showing full particulars including quantitative detail and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physical verified by the management during the year, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. There were no material discrepancies noticed on such verifications. Fixed Assets at Foreign sites costing Rs. 7.32 crores in Iraq are not physically verifiable.

c) In our opinion, the Company has not disposed off a substantial part of Fixed assets during the year and accordingly the going concern status is not affected.

2. In respect of its inventories:

a. The Company is a Construction Company having a central stores Department in Mumbai. The Management has claimed to have conducted physically verification of stores & materials required for local jobs at reasonable intervals during accounting year. In our opinion, the frequency of verification is reasonable. The valuation of stock is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the earlier years.

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

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories, and the discrepancies noticed on physical verification of the inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loan, secured or unsecured to companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans, from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In respect of the said loan from ten parties, the maximum amount outstanding at any time during the year is Rs. 23,19,98,656 and the year end balance is Rs. 22,45,38,417. The rate of interest and terms and conditions of the loans taken are not prejudicial to the interest of the company. The repayment of the said loans is not scheduled.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and also for the sale of goods. During the course of audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) According to information and explanation given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register required to be maintained under referred to in section 301 of the Companies Act. 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information with the company.

6. According to information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. The central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act. 1956.

9. In respect of statutory dues:

According to the records of the company. undisputed statutory dues including Provident Fund, Investor education and protection fund, Employee''s state insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and Explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

10. The Company has got accumulated losses not less than fifty percent of its net worth. The company has incurred cash losses during the Financial Year covered by the audit and in immediately preceding financial year.

11. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in the repayment of dues to the financial institutions, Banks or Debenture holders.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause (XIII) of para 4 of the companies (Auditor'' reports) order, 2003 are not applicable to the Company.

14. The Company has not entered into any transactions and contracts in respect of trading in securities, debentures and other investments.

15. According to the information and explanations given to us and the representations made by the management, company has not given any guarantee for loans taken by others from any banks or financial institutions during the year.

16. The Company has not obtained any term loan during the year.

17. According to the information and Explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the Company has not utilized any amount from short term sources towards repayment of long-term borrowing and acquisition of fixed assets.

18. During the Financial Year 2013-14, the Company has not made any allotment shares.

19. The Company has not issued any debenture and hence the question of creating securities in respect of debenture does not arise.

20. The Company has not raised any monies by way of public issue during the year.

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

For N. B. Purohit & Co. Place - Mumbai Chartered Accountants Date - 30th May, 2014 Firm Regn. No. 108241W

(N. B. Purohit) Proprietor M. Ship No. 31999


Mar 31, 2013

Report on the Financial Statements

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

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 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, subject to PARAGRAPH 3 UNDER THE HEADING " REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS " below, 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 31stMarch 2013;

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

c) In the case of the Cash Flow Statement, of the 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, 2003 ("the Order"), as amended, 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 and Statement of Profit and Loss and Cash flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, subject to Note 26(iv) regarding valuation of Current Assets, Current Liabilities and Loans in Foreign currency at the rate Prevailing as on 30-06-1984, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the accounting standards refer to in section (3C) of section 211 of the Companies Act, 1956.

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

3. Attention is also invited to the following notes in Note "27"

a. Note No. 23 :Unascertained profit of Joint Venture.

b. Note No. 24(a) :Sale of land at Amboli Andheri (W)

c. Note No. 24(b) :Termination of Sale of land at

Amboli Andheri (W)

d. Note No. 26: (iii) :Delay in realization of Foreign Assets

book Value Rs. 19, 16, 10,755/=

e. Note No.26(iv) :Difference in Loans, Assets & liabilities

arising due to adoption of rate of exchange as on 30/06/1984.

f. Note No. 26: (v) : Old & disputed outstanding amounting to

Rs.5,54,532/=(Previous year Rs.5,46,107)

ANNEXURE TO INDEPENDENT AUDITORS REPORTREFERRED TO IN PARAGRAPH 1 UNDER THE HEADING " REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS " OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:- a) The Company has maintained proper records showing full particulars including quantitative detail and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physical verified by the management during the year, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. There were no material discrepancies noticed on such verifications. Fixed Assets at Foreign sites costing Rs. 7.32 crores in Iraq are not physically verifiable.

c) In our opinion, the Company has not disposed off a substantial part of Fixed assets during the year and accordingly the going concern status is not affected.

2. In respect of its inventories :

a. The Company is a Construction Company having a central stores Department in Mumbai. The Management has claimed to have conducted physically verification of stores & materials required for local jobs at reasonable intervals during accounting year. The valuation of stock is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the earlier years

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

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories, and the discrepancies noticed on physical verification of the inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loan, secured or unsecured to companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans, from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In respect of the said loan from eleven parties, the maximum amount outstanding at any time during the year is Rs.28,88,00,152 and the year end balance is Rs. 21,40,58,656. The rate of interest and terms and conditions of the loans taken are not prejudicial to the interest of the company. The repayment of the said loans is not scheduled.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) According to information and explanation given to us, contracts or arrangements referred to in section 301 of the Companies Act. 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information with the company.

6. The Company has not accepted any deposit from the public.

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

8. The central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act. 1956

9. In respect of statutory dues:

According to the records of the company. Undisputed statutory dues including Provident Fund, Investor education fund, Employee''s state insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statory dues have been generally regularly deposited with the appropriate authorities. According to the information and Explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than six months from the date of becoming payable.

10. The Company has got accumulated losses not less than fifty per cent of its net worth. The company has incurred cash losses during the Financial Year covered by the audit and in immediately preceding financial year.

11. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in the repayment of dues to the financial institutions, Banks or Debenture holders.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (XIII) of para 4 of the companies (Auditor'' reports) order 2003 are not applicable to the Company.

14. The Company has not entered into any transactions and contracts in respect of trading in securities, debentures and other investments.

15. According to the information and explanations given to us and the representations made by the management, company has not given any guarantee for loans taken by others from any banks or financial institutions during the year.

16. The Company has not obtained any term loan during the year.

17. According to the information and Explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the Company has not utilized any amount from short term sources towards repayment of long-term borrowing and acquisition of fixed assets.

18. During the Financial Year 2011-12, the Company had made preferential allotment of 48,20,000 7% Cumulative Redeemable Preference Shares of Rs. 100 each at face value to Anchor Leasing Pvt. Ltd. , a company covered in the Register maintained under section 301 of the Companies Act. 1956. The price at which preferential allotment is made is not prejudicial to the interest of the company.

19. The Company has not issued any debenture and hence the question of creating securities in respect of debenture does not arise.

20. The Company has not raised any monies by way of public issue during the year.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.



For N. B. Purohit & Co.

Chartered Accountants

Firm Regn. No. 108241W



Place – Mumbai

Date – 30th May, 2013

(N. B. Purohit)

Proprietor

M.Ship No.31999


Mar 31, 2012

We have audited the attached Balance Sheet of Shah Construction Company Limited as on 31st March' 2012' the Statement of Profit & Loss and Cash Flow Statement of the company 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.

1) We conduct 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 about whether the financial statements are free of material misstatement. An audit includes examining' on a test check 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.

2) As required by the Companies (Auditor's Report) Order 2003 issued by the central Government of India in terms of Section 227 (4A) of the Companies Act 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us' we give in the Annexure' hereto a statement on the matters specified in the paragraphs 4 & 5 of the said order.

3) Further to our comments in the Annexure referred to in paragraph 2 above and subject to the notes to the Balance sheet we report that :-

a) We have obtained all the information & explanations which to the best of our knowledge & 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 for our examination of such books.

c) The Balance Sheet' Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account.

d) In our opinion' subject to Note 27(iv) regarding valuation of Current Assets ' Current Liabilities and Loans in Foreign currency at the rate Prevailing as on 30-06-1984' the Balance Sheet' Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the accounting standards refer to in section (3C) of section 211 of the Companies Act' 1996.

e) On the basis of written representations received from the directors' and taken on record by Board of Directors' we report that none of the Directors are disqualified as on 31st March' 2012 from being appointed as directors in terms of clause (g) of sub section (1) of section 274 of the Companies Act' 1956.

4. Attention is also invited to the following notes in Note "27"

a. Note No. 24 .Unascertained profit of Joint Venture.

b. Note No. 25(a) .Sale of land at Amboli Andheri (W)

c. Note No. 27 (Hi) -.Termination of Sale of land at

Amboli Andheri (W)

d. Note No. 27: (Hi) : Delay in realization of Foreign Assets

book ValueRs. 19'16' 10'755/=

e. Note No.27(iv) .Difference in Loans' Assets & liabilities

arising due to adoption of rate of exchange as on 30/06/1984.

f. Note No. 27: (v) Old & disputed outstanding amounting to

Rs.5'46'1077=(Previous year Rs.5'46'107)

5. In our opinion and to the best of information and according to explanations given to us' subject to para 4 above' the said accounts read together with Significant Accounting Policies and notes thereon' 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' 2012;

(ii) In the case of the Statement of Profit and Loss' of the Loss of the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement of the Cash Flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:-

a) The Company has maintained proper records showing full particulars including quantitative detail and situation of fixed assets on the basis of available information.

b) As explained to us' the fixed assets have been physical verified by the management during the year' which in our opinion is reasonable' having regard to the size of the company and nature of its assets. There were no material discrepancies noticed on such verifications. Fixed Assets at Foreign sites costing Rs. 7.32 crores_in Iraq are not physically verifiable.

c) In our opinion' the Company has not disposed off a substantial part of Fixed assets during the year and accordingly the going concern status is not affected.

2. In respect of its inventories :

a. The Company is a Construction Company having a central stores Department in Mumbai. The Management has claimed to have conducted physically verification of stores & materials required for local jobs at reasonable intervals during accounting year. The valuation of stock is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the earlier years

b. In our opinion and according to the information and explanations given to us' the procedures of physical verification of the inventory by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. In our opinion and according to the information and explanations given to us' the company has maintained proper records of its inventories' and the discrepancies noticed on physical verification of the inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3 (a) The Company has not granted any loan' secured or unsecured to companies' firms and other parties covered in the Register maintained under Section 301 of the Companies Act' 1956.

(b) The Company has taken unsecured loans' from companies' firms and other parties covered in the Register maintained under Section 301 of the Companies Act' 1956. In respect of the said loan from six parties' the maximum amount outstanding at any time during the year is Rs.79'87'25'619 and the year end balance is Rs.20'23'40'583. The rate of interest and terms and conditions of the loans taken are not prejudicial to the interest of the company. The repayment of the said loans is not scheduled.

4) In our opinion and according to the information and explanations given to us' there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and also for the sale of goods. During the course of audit' we have not observed any major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act' 1956:

(a)According to information and explanation given to us' contracts or arrangements referred to in section 301 of the Companies Act. 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us' the transactions made in pursuance of contracts / arrangements entered in the register maintained under section 301 of the Companies Act' 1956 and exceeding the value of Rs.5'00'000/- in respect of each party during the year have been made at prices which appear reasonable as per information with the company.

6. The Company has not accepted any deposit from the public.

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

8. The central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act. 1956

9. In respect of statutory dues:

According to the records of the company. Undisputed statutory dues including Provident Fund' Investor education fond' Employee's state insurance' Income Tax' Sales Tax' Wealth Tax' Custom Duty' Excise Duty' Cess and other statory dues have been generally regularly deposited with the appropriate authorities. According to the information and Explanations given to us' no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March' 2012 for a period of more than six months from the date of becoming payable.

10. The Company has got accumulated losses not less than fifty per cent of its net worth. The company has incurred cash losses during the Financial Year covered by the audit and in immediately preceding financial year.

11. Based on our audit procedure and according to the information and explanations given to us' we are of the opinion that the company has not defaulted in the repayment of dues to the financial institutions' Banks or Debenture holders.

12. In our opinion and according to the information and explanations given to us' no loans and advances have been granted by the company on the basis of security by way of pledge of shares' debentures and other securities.

13. In our opinion' the company is not a chit fond or a nidhi / mutual benefit fund / society. Therefore' the provisions of clause (XIII) of para 4 of the companies (Auditor' reports) order 2003 are not applicable to the Company.

14. The Company has not entered into any transactions and contracts in respect of trading in securities' debentures and other investments.

15. According to the information and explanations given to us and the representations made by the management' company has not given any guarantee for loans taken by others from any banks or financial institutions during the year.

For N. B. Purohit & Co.

Chartered Accountants

Firm Regn. No. 108241W (N. B. Purohit)

Proprietor

M.Ship No.31999

Place - Mumbai

Date -31/08/2012


Mar 31, 2010

We have audited the attached Balance Sheet of Shah Construction Company Limited as on 31st March 2010, the profit & Loss Account and Cash Flow Statement of the company 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.

1) We conduct 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 about whether the financial statements are free of material misstatement. An audit includes examining, on a test check 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.

2) As required by the companies (Auditors Report) Order 2003 issued by the central Government of India in terms of Section 227 (4A) of the Companies Act 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us. we give in the Annexure, hereto a statement on the matters specified in the paragraphs 4 & 5 of the said order.

3) Further to our comments in the Annexure referred to in paragraph 2 above and subject to the notes to the Balance sheet we report that :-

a) We have obtained all the information & explanations which to the best of our knowledge & 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 for our examination of such books.

c) The Balance Sheet & Profit & Loss Account referred to in this report are in agreement with the books of account.

d) In our opinion, subject to Note 8 to the Account in Schedule I regarding valuation of Current Assets , Current Liabilities and Loans in Foreign currency at the rate Prevailing as on 30-06-1984, the Profit & Loss A/c and Balance Sheet comply with the accounting standards refer to in section 3 (C) of section 211 of the Companies Act. 1996.

e) On the basis of written representations received from the directors, and taken on record by Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2010 from being appointed as directors in terms of caluse (g) of sub section (1) of section 274 of the Companies Act, 1956.

4. Attention is also invited to the following notes in Schedule "H"

a) NoteNo.B-2 Joint Venture unascertained profit

b) Note No. B-3 (a) Sale of land atAmboli Andheri (W)

c) Note No. B-3 (b) Sale of land atAmboli Andheri (W)

d. Note No. 5: (iii) Delay in realization of Foreign Assets book Value Rs. 19, 16, 10,755/=

e. Note No. 5: (v) Old & disputed outstanding amounting to Rs. 5,46,107/= (Previous year Rs.5,46,107/ = )

f. Note No. 7: Difference in reduction in liability arising due to adoption of 30/06/1 984 rates of exchange cannot be ascertained due to UN Embargo.

5. In our opinion and to the best of information and according to explanations given to us , the said accounts read with significant accounting policies and other notes thereon, 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 on 31 st March, 2009.

(ii) In the case of the Profit and Loss Account of the Loss of the Company for the year ended on that date. I and

(iii) In the case of the Cash Flow Statement of the Cash Flow of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE

1) In respect of its fixed assets:-

a) The Company has maintained proper records showing full particulars including quantitative detail and situation of fixed assets on basis of available information.

b) As explained to us. The fixed assets have been physical verified by the management during the year. Which in our opinion is reasonable, having regard to the size of the company and nature of its assets. There were no material discrepancies noticed on such verifications Fixed Assets at Foreign sites costing Rs. 7.32 crores in Iraq are not physically verifiable.

c) In our opinion, the company has not disposed of substantial part of Fixed assets during the year and accordingly the going concern is not affected.

2. In respect of its inventories:

a. The Company is a Construction Company has a central stores Department in Mumbai. The Management has claimed to have conducted physically verification of stores & materials required for local jobs at reasonable intervals during accounting year. The valuation of stock is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the same basis as in the earlier years.

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

c. In our opinion and according to the information and explanations given to us, The company has maintained proper records of its inventory, and the discrepancies noticed on physical verification of the inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. According to the information and explanation given to us, The Company has neither taken nor granted any loan secured or unsecured, from / to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us. There are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and also for the sale of goods. During the course of audit. We have not observed any major weaknesses in internal controls.

5. In respect of the transaction covered under section 301 of the Companies Act, 1956.:

a) In our opinion and according to the information and explanation given to us the transaction made in pursuance of contracts or arrangement that needed 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 explanation given to us there are no transactions in pursuance of contract or arrangement entered in the register maintained under section 301 of the Companies Act. 1956 aggregating during the year to Rs.5 Lacs ( Rupees Five Lacs Only) or more in respect of any party.

6. The Company has not accepted any deposit from the public.

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

8. The central Government has not prescribed maintenance of cost records under section 209 (1) (d) of 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 fund, Employees state insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statory dues have been generally regularly deposited with the appropriate authorities. According to the information and Explanations given to us, no undisputed amouni payable in respect of the aforesaid dues were outstanding as at 31 st March, 2010 for a period of more than six months from the date of becoming payable.

10. Based on our audit procedure and according to the information and explanations given to us, we are of the. • opinion that the company has not defaulted in the repayment of dues to the financial institutions, Banks or Debenture holders.

11. In our opinion and according to the information and explanations given to us. No loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

12. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society, therefore, clause 4 (XIII) of the companies (Auditor reports) order 2003 is not applicable to the Company.

13. The Company has not entered into any transactions and contracts in respect of trading in securities", debentures and other investments. All shares, debentures and other investments have been held by the company in its own name.

14. According to the information and explanations given to us, and the representations made by the management, company has not given any guarantee for loans taken by others from any banks or financial institutions, during the year.

15. The Company has not obtained any term loan during the year.

16. According to the information and Explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the Company has not utilized any amount from short term sources towards repayment of long-term borrowing and acquisition of fixed assets.

17. During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act. 1956.

18. The Company has not issued any debenture and hence the question of creating securities in respect of debenture does notarise.

19. The Company has not raised any money by way of public issue during the year.

20. To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For N. B. Purohit & Co.

Chartered Accountants

Firm Regn. No. 108241W

Place : Mumbai (N.B. Purohit)

Dated: 02/12/2010 Proprietor

M.ShipNo.31999

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