Auditor Report of Vardhman Concrete Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Director is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This Responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating for ensuring 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 conducted our audit in accordance with the Standards on Auditing under Section 143(10) of the Act.

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 thereunder.

Opinion

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

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

Emphasis of Matter

a) The Company is a sick Company in terms of the Sick Industrial Companies (Special Provision) Act, 1985 but has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company. The Company has prepared their accounts on "going concern" basis. Attention of the members is invited to Note 30 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. However, as explained by the Management, the Company has large order in hand hence its ability to continue, interalia, is dependent on the generation of cash flow, profits from there execution and on the Company's ability to infuse requisite funds for meeting its obligations.

b) Confirmations are not available in respect of Trade Receivables of Rs. 595.69 Lacs. (Refer Note no. 33a).

c) Short Term Loans & Advances includes Rs. 180.51 Lacs in respect of which the confirmations are not available with the Company. These items are under close & constant recovery of management. The Management is hopeful about the recovery of the same; hence no provision has been considered necessary by the management (Refer Note No. 33b).

d) There are certain claims and matters under arbitration which may have significant impact on the net worth and the financial statements of the Company. [Refer Note 22 (a) & 22 (b)].

Consequential Impact of above on the net worth and financial statements of the Company is presently not ascertainable, hence not quantifiable.

Report on Other Legal and Regulatory Requirements

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

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

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

I. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 22 to the financial statements.

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

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

Annexure to the Auditors' Report

VARDHMAN CONCRETE LIMITED (refer our report of even date)

(i) (a) The Company is in the process of updating records showing full particulars, including quantities details and situation of Fixed Assets.

(b) As explained to us by the management, the assets have been physically verified at the end of the period at various sites by the site-in charge and no major discrepancies were noticed to the extent available records. The frequency of verification needs to be strengthened considering the size and the nature of the business of the Company.

(ii) The Company does not have any inventories hence the clause is not applicable to the Company.

(iii) In our opinion and according to the information and explanations given to us, the Company has given loan to 1 party covered in the register maintained under section 189 of the Companies Act.

a. In our opinion and according to the information and explanation given to us, the term and condition of the loans are prima facie not prejudicial to the interest of the Company.

b. Through the period of said loans are not fixed, as explained to us, it is not overdue.

(iv) In our opinion, and according to the information and explanations given to us, there are reasonable internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, during the course of our audit, we have neither come across nor have we been informed of any instances of major weakness in the internal control. However overall controls need to be strengthened.

(v) According to the information and explanations given to us, the Company has not accepted deposits as referred to in the directives issued by the Reserve Bank of India and the provisions of the section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

(vi) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under section 148 of the Companies Act in respect of any products of the Company.

(vii) (a) In our opinion and according to the explanation and information given to us the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Tax Deducted at Source, Service Tax and other statutory dues wherever applicable. The details of undisputed statutory dues outstanding for a period of more than six months from the date they became payable are as under:

Name of the statute Period to which the Amount Amount Relates (in Rs)

a) Maharashtra Value Added Tax FY 2010-11 1,11,734

b) Maharashtra Value Added Tax FY 2011-12 8,90,557

c) Service Tax FY 2010-11 34,18,521

d) Service Tax FY 2011-12 1,21,720

TOTAL 45,42,532

(b) According to the information and explanations given to us, there are no amounts of disputed statutory dues which have not been deposited with the concerned authorities.

(c) According to the information and explanations given to us, there is no amount required to be transferred to investor education and protection fund in accordance with the relevant provision of Companies Act, 1956 (1 of 1956) and rules made hereunder.

(viii) The Company has accumulated losses of more than 50% of its net worth at the end of the financial year and has incurred cash losses during the year and also in immediately preceding financial period (refer note no. 30).

(ix) Based on our audit procedures and the information and explanations given by management, we are of the opinion that during the year the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(x) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the period and hence reporting thereof does not arise.

(xi) According to the information and explanation given to us, the Company has not raised any term loans during the year.

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

For Amar Bafna & Associates Chartered Accountants FRN: 114854W

Sd/- Amar Bafna Place: Mumbai Partner Date: 29th May, 2015 M. No. : 048639

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Mar 31, 2014

We have audited the accompanying financial statements of VARDHMAN CONCRETE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Emphasis of Matter

a. The Company is a sick Company in terms of the Sick Industrial Companies (Special Provision) Act, 1985 but has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company. The Company has prepared their accounts on "going concern" basis. Attention of the members is invited to Note 30 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. However, as explained by the Management, the Company has large order in hand hence its ability to continue, interalia, is dependent on the generation of cash flow, profits from there execution and on the Company''s ability to infuse requisite funds for meeting its obligations.

b. Confirmations are not available in respect of Trade receivables of Rs. 595.44 Lacs. (Refer Note no. 33a)

c. Short Term Loans & Advances includes Rs. 180.49 Lacs in respect of which the confirmations are not available with the Company. These items are under close & constant recovery of management. The Management is hopeful about the recovery of the same, hence no provision has been considered necessary by the management (Refer Note No. 33b)

d. There are certain claims and matters under arbitration which may have significant impact on the net worth and the financial statements of the Company. [Refer Note 22

(a) & 22 (b)].

Consequential Impact of above on the net worth and financial statements of the Company is presently not ascertainable, hence not quantifiable.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

Annexure to the Auditors'' Report

VARDHMAN CONCRETE LIMITED (refer our report of even date)

(i) (a) The Company is in the process of updating records showing full particulars, including quantities details and situation of Fixed Assets.

(b) As explained to us by the management, the assets have been physically verified at the end of the period at various sites by the site-in charge and no major discrepancies were noticed to the extent available records. The frequency of verification needs to be strengthened considering the size and the nature of the business of the Company.

(c) During the year, the company has disposed off substantial part of fixed assets. However as explained by the management that it will not affect the going concern status of the company despite of the fact that its net worth is completely eroded (Refer note no. 30)

(ii) (a) As explained to us, the inventories have been physically verified by the site-in charge of the respective sites at year end. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedure of physical verification of inventory followed by the management is considered to be reasonable

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventory. In our opinion, discrepancies if any, noticed on physical verification of stocks, to the extent verified, were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, the Company has not given any secured or unsecured loans to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence reporting under clause (iii) (b), (c) and

(d) in respect of the other terms and condition is not applicable to the Company in this respect.

(e) In our opinion and according to the information and explanations given to us, the Company has taken loans from 5 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the period aggregates to Rs. 1633.06 Lacs and at the year end the outstanding balance of the said loans is Rs. 1633.06 Lacs.

(f) In our opinion and according to the information and explanation given to us, the term and condition of the loans are prima facie not prejudicial to the interest of the Company.

(g) Through the period of said loans are not fixed, as explained to us, none of them are overdue.

(iv) In our opinion, and according to the information and explanations given to us, there are reasonable internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, during the course of our audit, we have neither come across nor have we been informed of any instances of major weakness in the internal control. However overall controls need to be strengthened.

(v) (a) According to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 so have been entered. There are no transactions of sale of services in excess of Rs.5 lacs with party entered into the said register.

(b) Reporting regarding the prevailing market prices in clause (v)(b) of the said order is not applicable.

(vi) According to the information and explanations given to us, the Company has not accepted deposits as referred to in Section 58A and Section 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion and according to the explanation and information given to us, during the period under audit, the Company doesn''t have formal internal audit.

(viii) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under section 209 (i)(d) of the Companies Act, 1956 in respect of any products of the Company.

(ix) (a) In our opinion and according to the explanation and information given to us the Company has been generally irregular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Tax Deducted at Source, Service Tax and other statutory dues wherever applicable. The details of undisputed statutory dues outstanding for a period of more than six months from the date they became payable are as under:

Name of the statute Period to which Amount the Amount (in Rs) Relates

a) Maharashtra Value Added Tax FY 2010-11 1,11,734

b) Maharashtra Value Added Tax FY 2011-12 8,90,557

c) Service Tax FY 2010-11 34,18,521 d) Service Tax FY 2011-12 1,21,720

TOTAL 45,42,532

(b) According to the information and explanations given to us, there are no amounts of disputed statutory dues which have not been deposited with the concerned authorities.

(x) The Company has accumulated losses of more than 50% of its net worth at the end of the financial year and has not incurred cash losses during the year but has incurred cash losses in immediately preceding financial period. However the Company has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company.

(xi) Based on our audit procedures and the information and explanations given by management, we are of the opinion that during the year the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to the information and explanations given to us, the Company is not a chit fund Company or nidhi /mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(xv) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the period and hence reporting thereof does not arise.

(xvi) According to the information and explanation given to us, the Company has not raised any term loans during the year.

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

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

(xix) The Company does not have any outstanding debentures and therefore the question of creating securities thereon does not arise.

(xx) The Company has not raised any money by public issues during the year. Hence the question of verification and reporting in respect of use of such monies does not arise.

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

For Amar Bafna & Associates Chartered Accountants FRN:114854W

Sd/- Place: Mumbai Amar Bafna Date: 30th May, 2014. Partner M. No. 048639

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Mar 31, 2013

Report on the Financial Statements.

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Emphasis of Matter

a. The Company is a sick Company in terms of the Sick Industrial Companies (Special Provision) Act, 1985 but has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company. The Company has prepared their accounts on "going concern” basis. Attention of the members is invited to Note 31 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. However, as explained by the Management, the Company has large order in hand hence its ability to continue, interalia, is dependent on the generation of cash flow, profits from there execution and on the Company''s ability to infuse requisite funds for meeting its obligations.

b. Confirmations are not available in respect of Trade receivables of Rs. 595.44 Lacs and Short term loans and advances of Rs. 171.23 lacs. The management is constantly following up to obtain the said confirmations.(Refer Note no. 34a)

c. Trade receivables include Rs. 361.97 lacs due from a debtor, which is outstanding since long time. The management has taken necessary steps including legal recourse to recover the same. The management is hopeful for recovery of same, hence no provision has been considered necessary. (Refer Note No. 34b)

d. There are certain claims and matters under arbitration which may have significant impact on the net worth and the financial statements of the Company. [Refer Note 22 (b) & 22 (c)].

Consequential Impact of above on the net worth and financial statements of the Company is presently not ascertainable, hence not quantifiable.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

Annexure to the Auditors'' Report VARDHMAN CONCRETE LIMITED (refer our report of even date)

(i) (a) The Company is in the process of updating records showing full particulars, including quantities details and situation of Fixed Assets.

(b) As explained to us by the management, the assets have been physically verified at the end of the period at various sites by the site-in charge and no major discrepancies were noticed to the extent available records. The frequency of verification needs to be strengthened considering the size and the nature of the business of the Company.

(c) As per the information and explanations given to us, during the year, the Company has not disposed off any substantial part of fixed assets that would affect the going concern.

(ii) (a) As explained to us, the inventories have been physically verified by the site-in charge of the respective sites at year end. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedure of physical verification of inventory followed by the management is considered to be reasonable

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventory. In our opinion, discrepancies if any, noticed on physical verification of stocks, to the extent verified, were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) In our opinion and according to the information and explanations given to us, the Company has not given any secured or unsecured loans to Companies, Firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence reporting under clause (iii) (b), (c) and (d) in respect of the other terms and condition is not applicable to the Company in this respect.

(e) In our opinion and according to the information and explanations given to us, the Company has taken loans from 3 parties covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount outstanding during the period aggregates to Rs. 1757.26 Lacs and at the year end the outstanding balance of the said loans is Rs. 1757.26 Lacs.

(f) In our opinion and according to the information and explanation given to us, the term and condition of the loans are prima facie not prejudicial to the interest of the Company.

(g) Though the period of said loans are not fixed, as explained to us, none of them are overdue.

(iv) In our opinion, and according to the information and explanations given to us, there are reasonable internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, during the course of our audit, we have neither come across nor have we been informed of any instances of major weakness in the internal control. However overall controls need to be strengthened.

(v) (a) According to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 so have been entered. There are no transactions of sale of services in excess of Rs.5 lacs with party entered into the said register.

(b) Reporting regarding the prevailing market prices in clause (v)(b) of the said order is not applicable.

(vi) According to the information and explanations given to us, the Company has not accepted deposits as referred to in Section 58A and Section 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion and according to the explanation and information given to us, during the period under audit, the Company has an Internal Audit system that commensurate with size of organisation.

(viii) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under section 209 (i)(d) of the Companies Act, 1956 in respect of any products of the Company.

(ix) (a) In our opinion and according to the explanation and information given to us the Company has been generally irregular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Tax Deducted at Source, Service Tax and other statutory dues wherever applicable. The details of undisputed statutory dues outstanding for a period of more than six months from the date they became payable are as under:

(b) According to the information and explanations given to us, there are no amounts of disputed statutory dues which have not been deposited with the concerned authorities.

(x) The Company has accumulated losses of more than 50% of its net worth at the end of the

financial year and has incurred cash losses during the year and also in immediately preceding financial period. The Company has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company.

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

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to the information and explanations given to us, the Company is not a chit fund Company or nidhi /mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(xv) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the period and hence reporting thereof does not arise.

(xvi) According to the information and explanation given to us, the Company has not raised any term loans during the year.

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

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

(xix) The Company does not have any outstanding debentures and therefore the question of creating securities thereon does not arise.

(xx) The Company has not raised any money by public issues during the year. Hence the question of verification and reporting in respect of use of such monies does not arise.

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

For Amar Bafna & Associates

Chartered Accountants

FRN: 114854W

Sd/-

Amar Bafna

Partner

M. No. : 048639

Place : Mumbai

Date : 30th May,2013.

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Jun 30, 2010

1. We have audited the attached Balance Sheet of VARDHMAN CONCRETE LIMITED (formerly known as Stresscrete India ltd.) ("the Company") as on 30th June, 2010 and the related Profit and Loss Account and the 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.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements 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 in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

a. The Company is a sick Company in terms of the Sick Industrial Companies (Special Provision) Act, 1985 and has also defaulted in payment of interest to a Bank amounting Rs. 5,607,945 as referred in para (xi) of the Annexure referred in clause 3 above. The Company has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick. Company, however the Company have large order in hand hence its ability to continue, is dependent on the generation of cash flow and profits from there execution. The Company has prepared their accounts on "going concern " basis (Refer Note 13, Schedule S to notes to accounts).

b. The Company has long outstanding dues of Rs. 410.46 lacs receivable from a debtor and further dues in respect of a bank guarantee of Rs. 90.52 lacs included under the head Advance Receivable In Cash Or Kind" invoked by them, is considered doubtful and not provided for. (Refer Note 15, Schedule S to notes to accounts).

c. In the absence of individual confirmation of Sundry Debtors Rs. 59,762,792/, (including un provided non moving debtors of Rs.41,045,739/-) Loans and Advances given Rs. 40,297,620/- Sundry Creditors of Rs21,361,078/-(including unadjusted non moving creditors of lis.4,557,791/- Advance from customers Rs.29,307,742/-, Other liabilities of Rs6.562.359/- and Fixed Deposit with a bank for Rs.411,562/- all are taken correct as per books of account (Refer Note 15, Schedule S to notes to accounts). This may affect financial statements.

d. There are certain claims and matters under arbitration which may have significant impact on the net worth and the financial statements of the Company and not quantifiable. (Refer Note 1(b) & 1(c) of Schedule S to notes to accounts).

e. As referred in para i(a)of the annexure referred in paragraph 3 above, the Company has not maintained certain records in respect of fixed assets and the it the same is not totally reconcilable. These could have financial impact which can not be quantified.

Consequential Impact of above on the net worth and financial statements of the Company cannot be ascertained and is not provided for.

5. Subject to our observations in Para 4 above and further to our comments in the Annexure referred to in paragraph 3 above, we state 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 examinations of the books.

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

d. Based on the written representations received from Directors of the Company and taken on record by the Board of Directors and on the basis of information and explanations given to us, none of the directors of the Company as on 30th June, 2010 disqualify from being appointed as director within the meaning of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

e. In our opinion, the Profit and Loss Account, the Balance Sheet & the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 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 subject to Para 4 as stated above, read together with the 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 the Balance sheet, of the state of affairs of the Company as on 30th June,2010,

ii) in the case of Profit and Loss Account, of the loss for the year ended 30th June 2010 and

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

Annexure to the Auditors Report

With reference to the Annexure referred to in paragraph 3 of the report of the Auditors to the Members of VARDHMAN CONCRETE IMITED, on the accounts for the year ended 30th June, 2010 we report that:

(i) (a) The Company has not maintained proper records showing full particulars, including quantities details and situation of Fixed Assets.

(b) As explained to us by the management, the assets have been physically verified at the end of the period at various sites by the site-in charge and no major discrepancies were noticed to the extent available record. The frequency of verification needs to be strengthened considering the size and the nature of the business of the Company.

(c) No Fixed Assets have been disposed off during the period.

(ii) (a) As explained to us, the inventories have been physically verified by the site-in charge of the respective sites at year end. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedure of physical verification of inventory followed by the management is considered to be reasonable

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventory. In our opinion, discrepancies if any, noticed on physical verification of stocks, to the extent verified, were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) In our opinion and according to the information and explanations given to us, the Company has not given any secured or unsecured loans to Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 and hence reporting under clause (iii) (b), (c) and (d) in respect of the other terms and condition is not applicable to the Company in this respect.

(e) During the period the Company has taken/ repaid loans including those outstanding of earlier years of parties covered in the register maintained under section 301 of the Companies Act 1956. The numbers of parties involved are four. The maximum amount outstanding during the period aggregates to Rs.45, 697,030/- and the end of the period outstanding balance of the said loans is Rs. 45,697,030/-.

(f) In our opinion and according to the information and explanation given to us, the term and condition of the loans are prima facie not prejudicial to the interest of the Company.

(g) Though the period of said loans are not fixed, as explained to us, none of them are overdue.

(iv) In our opinion, and according to the information and explanations given to us, there are reasonable internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, during the course of our audit, we have neither come across nor have we been informed of any instances of major weakness in the internal control. However overall controls need to be strengthened.

(v) (a)According to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 so have been entered. There are transactions of sale of services in excess of Rs.5 lacs with one such party and as per the informations and explanations given, the prices in respect of the same are considered to be reasonable in the available circumstances.

(b) Transactions made in pursuance of contract have been made at prices which are reasonable having regards to prevailing market prices at the relevant time.

(vi) (a) According to the information and explanations given to us, the Company has not accepted a deposits as referred to in Section 58A and Section 58AA of the Companies Act, 1956 and the rules framed there under.

(b) According to the information and explanations given to us, there have been no proceedings before the Company Law Board, National Company Law Tribunal, Reserve Bank of India, any court and any other Tribunal in this matter.

(vii) During the period under review, the Company has an internal audit system, done by an independent Chartered Accountant, is commensurate with its size and nature of business.

(viii) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under section 209 (i) (d) of the Companies Act, 1956 in respect of any products of the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Wealth tax, , Custom Duty cess, Works Contract Tax, Service tax and TDS and other statutory dues wherever applicable and there are non undisputed dues outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no amounts of disputed statutory dues which have not been deposited with the concerned authorities.

(x) The Company has accumulated losses of more than 50% of its net worth at the end of the financial year and has incurred cash losses of during the year and also in immediately preceding financial period. The Company is a sick Company in terms of the Sick Industrial Companies (Special Provision) Act, 1985. The Company has not made an application, to Board for Industrial and Financial Reconstruction for being declared as a Sick Company.

(xi) In our opinion and according to the information and explanation given to us, during the year, the Company has defaulted in payment of interest of Rs. 5,607,945 /- to a bank. The details are as follows: AMOUNT DUE

S. NO. MONTH (Rs.) DATE

1 JULY 09 449,632 07.08.2009

2 AUG 09 447,080 07.09.2009

3 SEPT 09 437,667 07.10.2009

4 OCT 09 458,562 07.11.2009

5 NOV 09 450,055 07.12.2009

6 DEC 09 471,600 07.01.2010

7 JAN 10 478,427 07.02.2010

8 FEB 10 438,367 07.03.2010

9 MAR 10 491,664 07.04.2010

10 APRIL 10 482,674 07.05.2010

11 MAY 10 505,732 07.06.2010

12 JUNE 10 496,485 07.07.2010

5,607,945

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) Clause (xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company as the Company is not a chit fund Company or nidhi /mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xv) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the period and hence reporting thereof does not arise.

(xvi) According to the information and explanation given to us, the term loans raised have been applied for the purpose for which they were raised.

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

(xviii) The Company has not made nay preferential allotment of shares to parties or Companies covered in the register maintained under section 301 of the Companies Act. 1956.

(xix) The Company did not have any outstanding debentures during the period. Accordingly, no securities have been created.

(xx) The Company has not raised any money by public issues during the year. Hence the question of verification and reporting in respect of use of such monies does not arise.

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

For CHOKSHI & CHOKSHI

Chartered Accountants

Firm Reg. No. 101872W

D. J. Parikh

Place:Mumbai (Partner)

Dated:03th Decembert 2010 M.No.35305