Auditor Report of SKIL Infrastructure Ltd.

Mar 31, 2016

TO THE MEMBERS OF SKIL INFRASTRUCTURE LIMITED Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters 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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 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 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 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 true and fair view 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 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.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

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

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

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 Annexure a statement on matters specified in Paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

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

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

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

g) With respect to the other matters included in the Auditor''s Report and to our best of our information and according to the explanations given to us :

i. The Company does not have any pending litigations which would impact its financial position

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

iii. There were no amounts which required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditors’ Report

The Annexure referred to in our report to the members of SKIL INFRASTRUCTURE LIMITED (“the Company”) for the year ended on 31^st March, 2016. We report that:

1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the fixed assets has been physically 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 fixed assets and no material discrepancies were noticed on such physical verification.

(c) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the title deed of immovable properties aggregating to Rs, 21,945.39/- lacs are not held in the name of the company but in the name of Amalgamating Company for which an Application has been filed for change of name with the Land Authority and is in the process of change.

2. The Company doesn''t have any inventory, hence the clause of the Para 3 (ii) is Not Applicable.

3. 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 Companies Act. And hence the clause of the Para 3 (iii) (a), (b) and (c) is Not Applicable.

4. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

5. According to information and explanation given to us, the company has not accepted any public deposits, and hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable for the year under audit.

6. We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company under sub-section (1) of section 148 of the Companies Act, 2013. Therefore the provision of clause (vi) of para 3 is Not Applicable.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2016, for the period of more than six months from the date becoming payable except Income tax liability of Rs, 71.46 Lacs, Income Tax (TDS) of Rs, 783.13 Lacs, Wealth Tax of 3.60 Lacs, Interest on TDS Payable of Rs, 732.89 Lacs and Stamp duty payable of Rs, 2,500/- Lacs.

(b) According to the information and explanations given to us there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, VAT and cess on account of any dispute which have not been deposited except in certain cases. The disputed statutory dues aggregating to Rs, 2,195.30 Lacs have not been deposited on account of disputed matters pending before the appropriate authorities as under:

Name of the Statue	Nature of the dues	Year	Amount (Rs, in lacs)	Forum where dispute is pending
Income Tax Act, 1961	Income Tax Block Assessment dues	Assessment Year 2007-08	90.49	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2009-10	613.45	ITAT-Mumbai Bench
Income Tax Act, 1961	Income Tax Block Assessment dues	Assessment Year 2009-10	106.39	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2010-11	172.49	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2010-11	21.21	ITAT-Mumbai Bench
Income Tax Act, 1961	Income Tax Block Assessment dues	Assessment Year 2010-11	291.41	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2011-12	180.77	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2011-12	140.89	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2012-13	77.68	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Income Tax Regular Assessment dues	Assessment Year 2013-14	430.52	CIT (Appeals)- Mumbai
Income Tax Act, 1961	Interest on TDS u/s 201(IA)	Assessment Year 2012-13	70.01	ACIT (TDS)-3(2)
Total			2,195.30

8. According to the records of the company examined by us and the information and explanations given to us by the Management and considering the extension letters received from the lenders, we are of the opinion that as on 31^st March 2016, the Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders except for amount payable to banks aggregating to Rs,17,313 Lacs/-. The lender wise details are tabulated as under:

Sr.no.	Particulars	Principal Default (Rs, in lacs)	Period of default since	Interest Default (Rs, In lacs)	Period of default since
1	Loan From Central Bank of India II	7,500.00	Sep-15	1,305.51	Jul-15
2	Loan From Union Bank of India	-	-	75.67	Jan-16
3	Loan From Central Bank of India III	5,000.00	Mar-16	587.92	July-15
4	Loan From IDBI - CC	150.00	Jan-16	-	-
5	Loan From IDBI Bank	333.00	Jan-16	510.45	Aug-15
6	Loan From IDBI FITL I	400.00	Aug-15	83.65	Aug-15
7	Loan From IDBI FITL II	235.00	Aug-15	-	-
8	Loan From Yes Bank - I	356.79	Mar-16	194.72	Feb-16
9	Loan From Yes Bank Ltd - II	-	-	580.36	Feb-16
	Total	13,974.79		3,338.29

9. In our opinion, and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer ( including Debt Instruments) and term loans applied for the purpose for which they were raised. Therefore the provision of clause (ix) of para 3 is Not Applicable.

10. During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

11. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013 except as below:

Name of the Director to whom remuneration is provided which is not in accordance with Section 197	Total Remuneration provided/(paid) (Rs, In Lacs)	Remarks
Ajay Khera	66.67 (10)	The Company has filed an Application with the Central Government, the approval of which is pending as on date

12. The company is not a Nidhi Company. Therefore the provision of clause (xii) of para 3 is not applicable.

13. In our opinion, and according to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the financial statements etc, as required by the applicable accounting standard.

14. In our opinion, and according to the information and explanations given to us, the Company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures under review. Therefore the provisions of clause (xiv) of para 3 is not applicable.

15. The company has not entered into any non-cash transactions with directors or persons connected with him. Therefore the provision of clause (xv) of para 3 is not applicable.

16. In our opinion, and according to the information and explanations given to us, the Company is not required to be registered under section 45IA of The Reserve Bank of India Act, 1934. Therefore the provision of clause (xvi) of para 3 is not applicable.

ANNEXURE B TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF SKIL INFRASTRUCTURE LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of SKIL INFRASTRUCTURE LIMITED (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We have conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and as issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For BHARAT SHAH & ASSOCIATES

Chartered Accountants

(Firm Reg. No:. 101249W)

(BHARAT A. SHAH)

PROPRIETOR

Membership No.32281

PLACE : MUMBAI

DATED : May 26, 2016

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Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters 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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 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 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 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 fnancial 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 true and fair view 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 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.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

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

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

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

AS PER OUR REPORT OF EVEN DATE

For BHARAT SHAH & ASSOCIATES

Chartered Accountants

Firm Registration No.: 101249W

BHARAT A. SHAH PROPRIETOR Membership No. 32281

PLACE: Mumbai DATE : 30/05/2015

The Annexure referred to in our report to the members of SKIL INFRASTRUCTURE LIMITED ("the Company.) for the year ended on 31st March, 2015. We report that:

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

(b) All the fixed assets have been physically 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 fixed assets and no material discrepancies were noticed on such physical verification.

2) The Company doesn't have any inventory, hence the clause of the Para 3 (ii)(a), (b) and (c ) is Not Applicable

3) In respect of loans, secured or unsecured, granted by the Company to companies, forms or other parties covered in the register maintained under Section 189 of the Companies Act 2013:

(a) The Company has granted loans to companies covered in the register maintained under Section 189 of the Companies Act, 2013.

(b) In case of loans granted to the companies listed in the registered maintained under Section 189 of the Act, the Company has granted loans to certain group companies and hence considering the long term business interest of the Company, no interest has been charged. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, this clause is not applicable to the Company in respect of repayment of the principal amount.

(c) In case where the overdue amount is more than rupees one lakh, reasonable steps have been taken by the Company for recovery of principal amount and interest.

4) 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, no major weakness has been noticed in the internal control system in respect of these areas.

5) According to information and explanations given to us, the Company has not accepted any public deposits, and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable for the year under audit.

6) We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company under sub-section (1) of Section 148 of the Companies Act, 2013. Therefore the provision of clause (vi) of para 3 is not applicable.

7) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,

the Company is generally regular in depositing the undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2015, for the period of more than six months except Income Tax liability of Rs.233.40 lacs, Income Tax (TDS) of Rs.1482.79 lacs and Wealth tax of Rs. 2.04 lacs.

(b) According to the information and explanations given to us, there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, VAT and cess on account of any dispute which have not been deposited except in certain cases. The disputed statutory dues aggregating to Rs. 2,468.70 lacs have not been deposited on account of disputed matters pending before the appropriate authorities as under:

Name of the Statute Nature of the dues Year Amount (Rs. inlacs)

Income Tax Act, 1961 Income Tax Block Assessment dues Assessment Year 2007-08 193.13 Income Tax Act, 1961 Income Tax Block Assessment dues Assessment Year 2008-09 121.25

Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2009-10 306.72

Income Tax Act, 1961 Income Tax Block Assessment dues Assessment Year 2009-10 241.46

Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2010-11 172.49

Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2010-11 401.93

Income Tax Act, 1961 Income Tax Block Assessment dues Assessment Year 2010-11 565.57

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Ac,1961 ITAT-Mumbai Bench

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 ITAT-Mumbai Bench

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Name of the Statute Nature of the dues Year Amount (Rs. in lacs)

Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2011-12 180.77 Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2011-12 137.70

Income Tax Act, 1961 Income Tax Regular Assessment dues Assessment Year 2012-13 77.68

Income Tax Act, 1961 Interest on TDS u/s 201(IA) Assessment Year 2012-13 70.01

Total 2,468.70

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 CIT (Appeals)- Mumbai

Income Tax Act, 1961 ACIT (TDS)-3(2)

(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company and hence this clause is not applicable.

8) The Company has accumulated losses as on March 31,2015, which is less than fifty percent of its net worth and has incurred cash loss of Rs.18,112.59/- lacs during the current financial year Rs. 17,064.62/- during the preceding financial year.

9) As per the information and explanations given to us by the management and considering the extension letters received from the lenders, we are of the opinion that as on 31st March, 2015, the Company has not defaulted in repayment of dues to banks, financial institutions and debenture/ bond holders except for amount payable to banks aggregating to Rs. 4,150.84 Lacs & amount payable to Financial Institutions aggregating to Rs. 10,988.25 Lacs.

10) The Company has given Corporate Guarantees aggregating to Rs. 13,37,000 Lacs for loans taken by its Subsidiary, Associates and other parties from Banks and Financial Institutions as at 31st March, 2015. The management is of the opinion that the terms and conditions thereof are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

11) To the best of our knowledge and belief and according to information and explanations given to us, the term loans raised have prima facie been applied for the purposes for which they were raised.

12) During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For BHARAT SHAH & ASSOCIATES

Chartered Accountants

Firm Registration No.: 101249W



BHARAT A. SHAH

PROPRIETOR

Membership No. 32281

PLACE: Mumbai

DATE : 30/05/2015

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Horizon Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the fnancial 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 the Management, as well as evaluating the overall presentation of the fnancial statements. We believe that the audit evidence we have obtained is suffcient 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 fnancial 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 Proft and Loss, of the proft of the Company for the year ended on that date, and

(c) in the case of the Cash Flow Statement, of the cash fows of the Company 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") 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 specifed in paragraphs 4 and 5 of the Order.

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

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

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

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

(d) In our opinion, the Balance Sheet, Statement of Proft and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2013 taken on record by the Board of Directors, none of the directors is disqualifed 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 Act.

AEfNrNaNDsAEXU RE TO AUDITORS'' REPORT

( lRSi ptefneedt r Chrareondsds t i tLo oa in pa trrhta g ram rpab nha ci 3 o 0of tf teh3 m.e Aud itors'' Report of even date)

1al. e(tain)g fT t he S choarmehpoladenrys is hme aCintmapainin bgenpg rohpeled r recorddays, showing full particulars, including quantitative details and situation of fxed

(b) Al l t hSehafre xe d assets has been physically verifed by the management during the year which in our opinion is reasonable having regard to the size of the company and nature of its fxed assets and no material discrepancies were noticed on such pihenys ic al verifcation.

(c) In ou r opinion and according to the information and explanations given to us, the company has not disposed off any fxed assets during the year.

2. (a) T(hJoein inHvoeldnertories have been physically verifed during the period by the management. In our opinion, the frequency of verifcation is reasonable.

(obld) The procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company is maintaining proper records of iEnRvEentory. The discrepancies noticed on verifcation between the physical stocks and book records were not material and have been properly dealt within the books of accounts.

3. In respect of Loans Secured or Unsecured, Granted or taken by the Company to/from Companies, Firms or Other Parties Covered in Register maintained under Section 301 of the Companies Act 1956.

(a) The Company has given loan to its three Subsidiaries. In respect of said Loan, the maximum Amount Outstanding at any time during the year is Rs. 1,29,45,21,378/- and the year end balance is Rs. 1,29,16,84,558/-. (t bC)ro ILnanoe,u F r o p inionai 4a0n0 d02 a3. ccording to the Information and Explanations given to us, the Rate of Interest & other terms & conditions fo r s uch L oans are not Prima Facie Prejudicial to the Interest of the Company considering the Long Term Business interest of the Company.

(c) The said loan is repayable on demand and there is no repayment Schedule.

(d) As the said loan is repayable on demand and therefore the question of overdue amount does not arise.

(e) The company has taken loan fro om two companies covered u/s 301 of Companies Act, 1956. The maximum amount outstanding balances are Rs. 23,99,55,091/- and yearend balances are Rs. 16,40,57,733/-.

(f) Ientin ogu orf tohpe iCnoiomnpa an nd abeccheoldrd oing tod Informeamtiboenr a n, d Explanation given to us, interest and other terms & conditions are not prima facie prejudicial to the interest of the company.

(g) The said loan is repayable on fdfxe mand.

4. In our opinion and according to tehve iuneformation and explanations given to us, there is an adequate internal control system commens2u01rate with the size of the tCamopmpany and the nature of its business for the purchase of Inventory and Fixed Assets and f R o er ti h st e er sale c o ef o g f o th o eds and servie s c se t s h . a D 4 u 8rinu g r the e fo c re ourse of our audit, no major weakness has been noticed in the internal control systee m d n io n t resph e a c ret h o o f ld te h r e o s f t e h arem a p s a .

5. (a) To the best of our knowledge and belief an4d7 according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act,1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction in pursuance of contract or agreement, entered in the register maintained under section 301 of the Companies Act, 1956, & exceeding the value of rupees fve lakhs in respect of any 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.

6. The Company has not accepted any deposits from the public to which provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the companies (acceptance of deposits) Rule 1975 apply.

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

8. We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company Under Section 209(1)(d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable with the appropriate authorities except Income Tax TDS, According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2013, for the period of more than six months from the date becoming payable except a Income Tax TDS of Rs. 2,82,45,844/-.

10. The Company does not have accumulated loss as at March 31, 2013 and has not incurred any cash losses during the fnancial year covered by our Audit and in the preceding fnancial year.

11. According to the records of the company examined by us and the information and explanations given to us, the company has generally not defaulted in repayment of dues to any fnancial institution or bank or debenture holders as at the balance sheet date, Except the defaults mentioned in Note No. 4 and 5 of the Balance Sheet.

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

13. The provision of any special statute applicable to chit fund /nidhi /mutual beneft fund / societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. The Company has given corporate guarantee for loans taken by subsidiary company from bank during the year. According to information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. In our opinion, the term loan has been applied for the purpose for which it was raised.

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

18. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the records of the company examined by us and the information and explanations given to us, the Company has not created securities in respect of debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For BHARAT SHAH & ASSOCIATES,

Chartered Accountant

Firm Reg. No. 101249W

(BHARAT A. SHAH)

PROPRIETOR Membership No.32281

Place : Mumbai

Dated : May 29, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Horizon Infrastructure Limited as at March 31, 2012, Profit & Loss Account and Cash Flow 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 about whether the financial statements are free of material mis-statement. 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 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956(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, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. In accordance with the provision of Section 227 of the Companies Act, 1956, we report as under:

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, Profit & Loss Account & Cash Flow Statement referred to in this Report is in agreement with the books of accounts ;

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

e. On the basis of written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2012 from being appointed as a director under Section 274(1)(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles Generally Accepted in India:

(i) In the case of the Balance Sheet of the state of affairs of the Company as at March 31, 2012.

(ii) In the case of Profit & Loss Account of the Profit of the Company 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 AUDITORS' REPORT (Referred to in paragraph 3 of the Auditors' Report of even date)

1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the fixed assets has been physically 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 fixed assets and no material discrepancies were noticed on such physical verification.

(c) In our opinion and according to the information and explanations given to us, the company has not disposed off any fixed assets during the year.

2. (a) The inventories have been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanation given to us, the company is Maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt within the books of accounts.

3. In respect of Loans Secured or Unsecured, Granted or taken by the Company to/from Companies, Firms or Other Parties Covered in Register maintained under Section 301 of the Companies Act, 1956.

(a) The Company has given loan to its three Subsidiaries. In respect of said Loan, the maximum Amount Outstanding at any time during the year is Rs. 2,07,40,60,044/- and the year end balance is Rs. 5,81,97,915/-.

(b) In our opinion and according to the Information and Explanations given to us, the Rate of Interest & other terms & conditions for such Loans are not Prima Facie Prejudicial to the Interest of the Company considering the Long Term Business interest of the Company.

(c) The said loan is repayable on demand and there is no repayment Schedule.

(d) As the said loan is repayable on demand and therefore the question of overdue amount does not arise.

(e) The company has taken loan from two companies covered u/s 301 of Companies Act, 1956. The maximum amount outstanding balances are Rs. 53,66,73,165/- and yearend balances are Rs. 48,61,14,756/-.

(f) In our opinion and according to Information and Explanation given to us, interest and other terms & conditions are not prima facie prejudicial to the interest of the company.

(g) The said loan is repayable on demand.

4. 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, no major weakness has been noticed in the internal control system in respect of these areas.

5. (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 transactions that need to be entered into the register maintained under Section 301 of the Companies Act,1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction in pursuance of contract or agreement, entered in the register maintained under Section 301 of the Companies Act, 1956, & exceeding the value of rupees five lakhs in respect of any 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.

6. The Company has not accepted any deposits from the public to which provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975 apply.

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

8. We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company under Section 209(1)(d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable with the appropriate authorities, According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012, for the period of more than six months from the date becoming payable except a TDS from works contract Rs. 49,38,368/-.

(b) According to the information and explanations given to us there are outstanding dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excess Duty and cess on account of any dispute are as follows:-

Sr. Name of the Statute Nature No. of Demand Amount Period for which Forum where Dispute Amount Related is Pending

1 Income Tax Act, 1961 Income Tax Rs. 15,06, 632 Financial Year Commissioner of Income Assessment Dues 2008-09 tax Appeals (Appeal-I) Mumbai

10. The Company does not have accumulated loss as at March 31, 2012 and has not incurred any cash losses during the financial year covered by our Audit and in the preceding financial year.

11. According to the records of the company examined by us and the information and explanations given to us, the company has generally not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The provision of any special statute applicable to chit fund /nidhi /mutual benefit fund / societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. The Company has given corporate guarantee for loans taken by subsidiary company from bank during the year. According to information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. In our opinion, the term loan has been applied for the purpose for which it was raised.

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

18. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the records of the company examined by us and the information and explanations given to us, the Company has not created securities in respect of debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For BHARAT SHAH & ASSOCIATES,

Chartered Accountant (FRN No. 101249W)

(BHARAT A. SHAH) PROPRIETOR

Membership No.32281

Place: Camp New Delhi Dated: May 31, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Horizon Infrastructure Ltd as at 31st March, 2011, Profit & Loss Account and 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.

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 about whether the financial statements are free of material mis-statement. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956(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 , we give in the Annexure , a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. In accordance with the provision of Section 227 of the Companies Act, 1956, we report as under:

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, Profit & Loss Account & Cash Flow Statement referred to in this Report is in agreement with the books of accounts ;

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

e. On the basis of written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2011 from being appointed as a director under section 274(1 )(g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles Generally Accepted in India:

(i) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2011.

(ii) In the case of Profit & Loss Account of the Profit of the Company 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 AUDITORS REPORT (Referred to in paragraph 3 of the Auditors Report of even date)

1. (a) The company is maintaining proper records showing full particulars, including quantitative details and

situation of fixed assets.

(b) All the fixed assets has been physically 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 fixed assets and no material discrepancies were noticed on such physical verification.

(c) In our opinion, the and according to the information and explanations given to us, the company has not disposed off any fixed assets during the year.

2. (a) The inventories have been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt within the books of accounts.

3. In respect of loans secured or unsecured, granted or taken by the Company to/from Companies, Firms or other parties covered in register maintained under Section 301 of the Companies Act 1956.

(a) The Company has given loan to its three subsidiaries. In respect of said loan, the maximum amount outstanding at any time during the year is Rs. 20563.98 lacs and the year end balance is Rs. 20558.13 lacs .

(b) In our opinion and according to the information and explanations given to us, the rate of interest & other terms & conditions for such loans are not prima facie prejudicial to the interest of the Company considering the long term business interest of the Company.

(c) The said loan is repayable on demand and there is no repayment schedule.

(d) As the said loan is repayable on demand and therefore the question of overdue amount does not arise.

(e) The Company had not taken any unsecured loan during the year, however the maximum amount outstanding and year end balance is Rs. 4000 lacs in respect of outstanding loan taken from one of its Associate Company.

(f) In our opinion & according to information & explanation given to us, interest and other terms & conditions are not prima facie prejudicial to the interest of the company.

(g) The said loan is repayable on demand.

4. 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, no major weakness has been noticed in the internal control system in respect of these areas.

5. (a) To the best of our knowledge & belief & according to the information & explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion & according to the information & explanations given to us, the transaction in pursuance of contract or agreement, entered in the register maintained under section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time, where such market prices are available.

6. The Company has not accepted any deposits from public to which provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the companies (acceptance of deposits) Rule 1975 apply.

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

8. We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company under Section 209(1 )(d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable with the appropriate authorities,according to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2011, for the period of more than six months from the date becoming payable.

(b) According to the information and explanations given to us there are outstanding dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excess Duty and Cess on account of any dispute are as follows:-

Sr. no. Name of the Nature of Amount Period for which Forum where Statute Demand (In Lacs) Amount Related Dispute is Pending

1) Income Tax Act 1961 Income Tax 15.07 Financial Year Commissioner of Assessment 2008-09 Income tax Appeals Dues Mumbai

2) Income Tax TDS 102.01 Financial Year Commissioner of Act 1961 from 2008-09 Income tax Appeals Salaries Mumbai

10. The Company does not have accumulated loss as at March 31, 2011 and has not incurred any cash losses during the financial year covered by our Audit, and in the immediately preceding financial year.

11. According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The provision of any special statute applicable to chit fund /nidhi /mutual benefit fund / societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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 during the year.

16. In our opinion, the term loan has been applied for the purpose for which it was raised.

17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis.

18. The company has not made any preferential allotment of shares to parties during the year.

19. According to the records of the company examined by us and the information and explanations given to us, the Company has not created securities in respect of debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For BHARAT SHAH & ASSOCIATES Chartered Accountants Firm Reg. No. 101249W

BHARAT A. SHAH PROPRIETOR Membership No.32281 Place : Mumbai Date : May 30, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Horizon Infrastructure Ltd as at 31st March, 2010, Profit & Loss Account and 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.

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 about whether the financial statements are free of material mis-statement. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 (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, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. In accordance with the provision of Section 227 of the Companies Act, 1956, we report as under:

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, Profit & Loss Account & Cash Flow Statement referred to in this Report is in agreement with the books of accounts ;

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

e. On the basis of written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director under section 274(1)(g) of the Companies Act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles Generally Accepted in India:

(i) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010.

(ii) In the case of Profit & Loss Account of the Profit of the Company 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 AUDITORS REPORT (Referred to in paragraph 3 of the Auditors Report of even date)

1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the fixed assets has been physically 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 fixed assets and no material discrepancies were noticed on such physical verification.

(c) In our opinion and according to the information and explanations given to us, the company has not disposed off any fixed assets during the year.

2. (a) The inventories have been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt within the books of accounts.

3. (a) As informed, 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, sub-clause (b), (c) and (d) are not applicable.

(e) The Company had taken a Unsecured Loan of Rs. 40 crores from one of its Associate Company.

(f) In our opinion & according to Information & Explanation given to us, Interest & other terms & conditions are not prima facie prejudicial to the Interest of the company.

(g) The said Loan is repayable on Demand after Two & half years.

4. 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, no major weakness has been noticed in the internal control system in respect of these areas.

5. (a) To the best of our knowledge & belief & according to the information & explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act,1956 have been so entered.

(b) In our opinion & according to the information & explanations given to us, the transaction in pursuance of contract or agreement, entered in the register maintained under section 301 of the Companies Act, 1956, & exceeding the value of rupees five lakhs in respect of any 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.

6. The Company has not accepted any deposits from the public to which provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the companies (acceptance of deposits) Rule 1975 apply.

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

8. We have been informed by the management that the Central Government has not prescribed maintenance of cost records for the Company Under Section 209(1)(d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including Provident Fund, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2010, for the period of more than six months from the date becoming payable.

(b) According to the information and explanations given to us there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excess Duty and cess on account of any dispute which have not been deposited.

10. The Company does not have accumulated loss as at March 31, 2010 and has not incurred any cash losses during the financial year covered by our Audit.

11. According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The provision of any special statute applicable to chit fund /nidhi /mutual benefit fund / societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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 during the year.

16. In our opinion, the term loan have been applied for the purpose for which it was raised.

17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis.

18. The company has not made any preferential allotment of shares to parties during the year.

19. According to the records of the company examined by us and the information and explanations given to us, the Company has not created securities in respect of debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination 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 to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For BHARAT SHAH & ASSOCIATES

Chartered Accountants

BHARAT A. SHAH

PROPRIETOR

Membership No.32281

Place: Mumbai

Date: May 21, 2010