Auditor Report of Vijay Shanthi Builders Ltd.

Mar 31, 2016

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF Vijay Shanthi Builders Limited Report on the Financial Statements

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

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraphs “Emphasis of Matter”,the afore said financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March 2016, its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

I. The Company has adopted selective accounting policy by deviating from Guidelines prescribed by ICAI in respect of revenue recognition of Accounting for Real Estate transactions, in the matter of one of its projects. In this regard, all significant risks & rewards are transferred to the buyers and it is not unreasonable to expect ultimate collection with no significant uncertainty existing regarding the amount of consideration. However the Company has added the profit quantum in its WIP-Closing Stock instead of recognizing the revenue by booking sale of constructed flats.

II. Refer No.18 (a) (ii) & 18 (b) to the financial Statements: In absence of confirmation from the concerned banks, we are unable to comment about the correctness of balances grouped under Bank Accounts which amounts to Rs.106874.22/- and balances grouped under Earmarked Balances which amounts to Rs.197683/-

Our opinion is not modified in respect of the matters mentioned above.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

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 it appears from our examination of those books.

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

(d) 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 except Accounting Standard 15 - Employee Benefits, where the Company has not accounted for the Provision for Gratuity on the basis of Actuarial Valuation.

(e) On the basis of the written representations received from the directors as on 31^st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st 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”; and

(g) 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 27.1 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. The below mentioned is the instance of delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

Financial Year	Date of declaration of dividend	Unclaimed amount as on March 31, 2016	Due Date for transfer to Investor Education and protection Fund	Actual date of transfer to Investor Education and protection Fund	Amount of Transfer to Investor Education and protection Fund
2007-08	29.09.2008	9,68,706.20	28.10.2015	04.11.2015	9,68,376.00

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the financial statements for the year ended 31 March 2016, we report that:

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

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

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are not held in the name of the Company.

(ii) As explained to us, the inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of verification is reasonable. 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. No material discrepancy noticed on verification between the physical stocks and the book records.

(iii) The Company has granted loans to three entities covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’).

(a) The loan granted is repayable on demand. The loan is given interest free which is not prima facie prejudicial to the interest of the Company considering Company’s economic interest in such entity.

(b) We are informed that the Company has not demanded repayment of any such loan during the year and thus, there has been no default on the part of the parties to whom the money has been lent.

(c) There are no overdue amounts in respect of the loan granted to body corporate/firms/other parties listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits in contravention of Directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under, where applicable . No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) We have broadly reviewed the books of accounts and records maintained by the company pursuant to the rules prescribed under section 148(1) of the Act for maintenance of cost records in respect of materials, labour and other items and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the

records of the company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have not been regularly deposited during the year by the Company with the appropriate authorities.

The undisputed amounts payable in respect of income tax, service tax, and Dividend Distribution Tax that were in arrears, as 31^st March, 2016 for a period of more than six months from the date they became payable are given below:

Name of the Statute	Amount of Default (Rs.)	Period of Default
INCOME TAX	1,13,60,750	AY 2014-15
INCOME TAX	55,34,782#	AY 2015-16
SERVICE TAX	20,57,317*	APRIL-SEP 2016
DIVIDEND DISTRIBUTION TAX	33,99,095	FY 2012-13

# The amount is based on the provision created for the year.

* The said amount has been paid on 19.05.2016

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax ,Excise Duty and Cess that have not been deposited with appropriate authorities on account of any dispute except the following:

Name of the Statute	Nature of dues	Amount (in Rs)	Period to which the amount relates	Forum where dispute is Pending
Service tax	Service tax and Penalty	15,00,01,000	April 2009 to June 2010	CESTAT, Chennai
ESI	ESI contribution and Interest	2,96,010	January 2012 to December 2012	Hon’ble Principal Labour Court, Chennai

(viii) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion, the company has not defaulted in repayment of dues to a financial institution, Government or dues to debenture holders. However, the Company has defaulted in repayment of dues to Bank, the details of which are given as under:

Particulars Amount of Default (Rs.)	Period of Default	Paid on
ICICI - Hire Purchase Loan 3,26,422	March 2016	29.04.2016

(ix) The company has not raised money by way of initial public offer or further public offer (including debt instrument). However the moneys were raised by way of term loans which were applied for the purposes for which those were raised.

(x) Based upon the audit procedures performed and according to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the course of our audit, that causes the financial statements to be materially misstated.

(xi) The Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act

(xii) The company is not a Nidhi Company hence this clause is not applicable. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) Based upon the audit procedures performed and according to the information and explanations given to us, All transactions with 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 standards.

(xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

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 Vijay Shanthi Builders Limited (“the Company”) as of 31 March 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 (‘ICAI’). 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 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, both applicable to an audit of Internal Financial Controls and, both 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 authorisations 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 internal financial controls system over financial reporting and such internal financial controls over financial reporting needs to be improved upon as at 31 March 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 Vinodh Kothari & Co.,

Chartered Accountants

Firm’s Registration Number: 012717S

Vinodh Kothari

Partner

Membership Number: 221340

Place: Chennai

Date: 27^th June 2016

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Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Vijay Shanthi Builders 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 the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraphs "Emphasis of Matter",the afore said financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

I. Refer No. 27.1 in Financial Statements: The Appeal filed before the Commissioner of Income Tax has been dismissed during the year. In our opinion, provisioning needs to be made against the outstanding tax demand. Had the same been provided for, the profit for the year would have been decreased by Rs. 1,10,17,350/-

II. The Company has adopted selective accounting policy by deviating from Guidelines prescribed by ICAI in respect of revenue recognition of Accounting for Real Estate transactions, in the matter of one of its projects. In this regard, all significant risks & rewards are transferred to the buyers and it is not unreasonable to expect ultimate collection with no significant uncertainty existing regarding the amount of consideration. Despite this fact, the Company has not accounted for Sale of Constructed Flats. Had the accounting policy been followed consistently and revenue is accounted for, the profit for the year would have been increased by Rs.14,54,11,378/- III. Refer No. 18 (a) (ii) in Financial Statements: In absence of confirmation from the concerned Bank(s), we are unable to comment about the correctness of balances grouped under Bank Accounts. The said value amounts to Rs.2,66,796/- Our opinion is not modified in respect of the matters mentioned above. 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 in terms sub-section (11) of section 143 of the Act, we give in Annexure a statement on matters specified in paragraph 3 & 4 of the said order.

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 it appears from our examination of those books.

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

(d) 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 except Accounting Standard 15 – Employee Benefits, where the Company has not accounted for the Provision for Gratuity on the basis of Actuarial Valuation.

(e) On the basis of the 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 adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we are of opinion that internal controls needs to be strengthened on the basis stated in paragraph "Emphasis of Matter" & "Point (d) of Report on Other Legal and Regulatory Requirements".

(g) 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. 27.1 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.

The Annexure referred to in paragraph 1 in Other Legal and Regulatory Requirements of Our Report of even date to the members of Vijay Shanthi Builders Limited on the accounts of the company for the year ended 31st March, 2015.

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

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

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

2. (a) The inventory has been physically verified during the year 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) On the basis of our examination of the records of Inventory, we are of the opinion that the company is maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) There are three entities covered in the register maintained under section 189 of the Companies Act, 2013 to which the company has granted loans.

(b) The loan granted is repayable on demand. We are informed that the Company has not demanded repayment of any such loan during the year, and thus, there has been no default on the part of the parties to whom the money has been lent. The loan is given interest free which is not prima facie prejudicial to the interest of the Company considering Company's economic interest in such entity.

(c) There is no overdue amount of loans granted to companies / firms / other parties listed in the register maintained under section 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, with regards to the purchase of inventories & fixed assets and with regards to sale of goods & services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits within the meaning of provisions of sections 73 & 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 with regard to deposits accepted from the public & from the members. No Order has been passed by the Company Law Board or the National Company Law Tribunal or by any Court or by any other Tribunal with regard to such deposits.

6. We have broadly reviewed the Books of Account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for maintenance of Cost Records under section 148 (1) of the Companies Act, 2013 and we are of the opinion, that prima facie the prescribed accounts and records have been made and maintained.

7. (a) According to the records of the company, the company is not regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Sales-tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess & other statutory dues applicable to it. However, we are unable to quantify the extent of arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of six months from the date they become payable. However, in case of Dividend Distribution Tax, an amount of Rs.33,99,095 /- is outstanding for a period exceeding six months.

(b) According to the records of the company, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Value Added Tax, Service Tax, Excise Duty or Cess which have not been deposited on account of any dispute except the following:

Particulars Amount (Rs.) Forum where it is pending

Income Tax - Assessment 1,10,17,350 Income Tax Tribunal Assessment Year 2010-11

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

8. The Company does not have any accumulated losses as at the end of the financial year under Audit. Further the company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9. As per the information and records produced & verified by us, the Company has not defaulted in repayment of dues to financial institutions. However, the Company has defaulted in repayment of dues to Bank, the details of which are given as under:

Particulars Amount of Default (Rs.) Period of Default Paid on

ICICI - Hire Purchase Loan 3,26,442 March 2015 07.04.2015

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

11. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

12. Based upon the audit procedures performed and 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 V. Ramaratnam & Co.,

Chartered Accountants

Firm's Registration No. : 002956S

R SUNDAR

Place: Chennai Partner

Date: 11th June 2015 Membership No. 012339

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Mar 31, 2014

We have audited the accompanying financial statements of Vijay Shanthi Builders Limited ("the Company"), which comprises 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 Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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:

* In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

* In the case of the Statement of Profit and Loss Account, of the profit for the year ended on that date; and

*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

* 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.

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

* 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;

* 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;

* 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;

* 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 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, 2013except the following:

* Accounting Standard 15 on Employee Benefits, the company has been providing for gratuity liability on an ad-hoc basis but not as stipulated by the standard (Refer Note 29.2.ii) ; and

* 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, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Vijay Shanthi Builders Limited on the accounts of the company for the year ended 31st March, 2014.

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

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the company has disposed its fixed assets during the year but such disposal is not substantial and does not affect the going concern assumption.

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(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 granted loan to companies, listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has granted loan and advances in nature of Project Advance to 2 parties that are covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year-end balance of such loans aggregates to Rs.3,65,74,749/- & Rs.45,76,963/- respectively.

The Company has taken loan from the party that is covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year-end balance of such loans aggregates to Rs.2,05,48,627/-& Rs.5,92,21,719/- respectively.

(c) In our opinion the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the registers maintained under Section 301 are not, prima facie, prejudicial to the interest of the company.

(d) The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest.

(e) There is no overdue amount of loans granted to companies listed in the registers maintained under section 301 of the Companies Act, 1956.

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

a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act exceeds five lacs rupees in a financial year are made under any contracts or arrangements at the price at which it is made are reasonable to prevailing market price.

The Company has not accepted any deposits covered under section 58A of the Companies Act, 1956 during the year under review.

As per information & explanations given by the management, there is no formal internal audit department. In our opinion and according to the information and explanations given to us the company has an internal audit system that needs to be strengthened to make it commensurate with its size and the nature of its business.

As per information & explanation given by the management and in our opinion, the company has maintained the required cost records as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

(a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales-tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable except the following:

Sl.No. Particulars Amount Outstanding 1. Tax Deducted at Source 30,13,250 2. Dividend Tax (Relating to accounting year 2011 - 2012 &2012-2013) 67,98,191 (b) According to the information and explanations given to us, there is no amounts payable in respect of wealth tax, service tax, sales tax, customs

duty and excise duty which have not been deposited on account of any disputes except the following:

Particulars Amount Forum in which it is pending

Income Tax - Assessment Year 2010-11 89,52,230 CIT - Appeals * The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

* Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution and bank.

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

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

* According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Hence, we are commenting upon the records & timely entries have been maintained in this regard & further investments specified are held in their own name.

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

* Based on our audit procedures and on the information given by the management, we report that, the loan has been utilised only for the purpose for which it is sanctioned.

* Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

* Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

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

* The Company has not raised any money by public issue during the year.

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

For V. Ramaratnam & Co Chartered Accountants FRN:002956S

Place: Chennai Date: 28th May 2014

R. Sundar Partner Membership No. : 012339

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Vijay Shanthi Builders 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 financia statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of account- ng policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financia 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 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

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;

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Vijay Shanthi Builders Limited on the accounts of the company for the year ended 31st March, 2013.

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

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification

(c) In our opinion and according to the information and explanations given to us, the company has disposed its fixed assets during the year but such disposal is not substantial and does not affect the going concern assumption

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories fol lowed 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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records

3. (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 granted loan to companies, listed in the register maintained under Section 301 of the Companies Act, 1956

(b) The Company has granted loan and advances in nature of Project Advance to 2 parties that are covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year-end balance of such loans aggregates to Rs.2,54,14,771/- & Rs.67,24,511/- respectively.

The Company has taken loan from the party that is covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year-end balance of such loans aggregates to Rs.53,00,000/-& Rs.5,70,11,454/- respectively

(c) In our opinion the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties isted in the registers maintained under Section 301 are not, prima facie, prejudicial to the interest of the company

(d) The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest

(e) There is no overdue amount of loans granted to companies listed in the registers maintained under section 301 of the Companies Act, 1956

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

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act exceeds five lacs rupees in a financial year are made under any contracts or arrangements at the price at which it is made are reasonable to prevailing market price

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

7. As per information & explanations given by the management, there is no formal internal audit department but the Company has an internal audit system which commensurate with its size and the nature of its business. External Audit Firm is doing Internal Audit periodically and their scope of the audit carried out is adequate

8. As per information & explanation given by the management and in our opinion, the company has maintained the required cost records as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales-tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable except the following:

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the mmediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution and bank

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

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

14. According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name

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

16. Based on our audit procedures and on the information given by the management, we report that, the loan has been utilised only for the purpose for which it is sanctioned.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year

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

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

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

For V. Ramaratnam & Co

Chartered Accountants FRN: 002956S R. Sundar

Place: Chennai Partner

Date : 28th May 2013 Membership No. : 012339

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Mar 31, 2012

We have audited the attached Balance Sheet of VIJAY SHANTHI BUILDERS LIMITED Chennai as at 31st March 2012 and the 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 Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the manufacturing and other Companies (Auditor's report) order 2003 and (Amendment) Order 2004 issued by the Company Law Board in terms of section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order.

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

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

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

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

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

e) Based on the written representation received from Directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as Director under section 274(1)(g) of 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, read together with the Significant Accounting Policies and Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view:-

In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March 2012

In so far as it relates to the Profit and Loss Account, of the profit for the year ended on that date And

In so far as it relates to cash flow statement, the cash flow of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS OF VIJAY SHANTHI BUILDERS LIMITED ON THE ACCOUNTS FOR THEYEARENDED MARCH 31, 2012

I. a) The Company has maintained proper records showing particulars, including quantitative details and situation of Fixed Assets.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noted on such verification.

c) During the year, the Company has disposed off the fixed assets, which are not substantial to the main business of the Company. During the year the Company disposed off Mineral Water Division assets. According to the information and explanations given to us, we are of the opinion that the sale of Mineral Water Division assets has not affected the going concern status of the Company.

II. a) The Inventory has been physically verified during the year 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 its nature of business.

c) The Company is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records.

III. a) The Company has taken loans from Companies, firms covered in the register maintained under section 301 of the Companies Act, 1956.The unsecured loans is taken from five persons and the amount outstanding on 31st March, 2012 is Rs 8,95,70,988/-.

b) In our opinion, the terms and conditions on which loans was taken from the parties listed in the register maintained under section 301 of the Companies act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c) There is no stipulation regarding payment of principal amounts and interest.

d) The Company has given loans in nature of projects/rental advance to firms covered in the register maintained under section 301 of the Companies Act, 1956.The unsecured loans is given to three persons and the amount outstanding on 31st March, 2012 is Rs 1,08,85,606/-

e) In our opinion, the terms and conditions on which loans were given to the parties listed in the register maintained under section 301 of the Companies act, 1956 are not, prima facie, prejudicial to the interest o the Company.

IV. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory and assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V. a) According to the information and explanations given to us, we are of the opinion, that the transactions need to be entered into the register maintained under section 301 of the Companies Act, 1956have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made exceeding the value of Rs 5,00,000/- with parties maintained under section 301 of the Companies Act, 1956 are not made under any contracts of arrangements but at the price at which it is made are reasonable to prevailing market price.

VI. The Company has not accepted any fixed deposits during the year in respect of which Section 58A of the Companies Act, 1956 is applicable. However the company has taken long term unsecured loans from related parties and short term loans from unrelated parties.

VII. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. External audit firm is doing internal audit and they are giving periodical report to the management and the scope of the audit is in-adequate.

VIII. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the Maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the construction of buildings/ structures and other related activities, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

IX. a) The Company is regular in depositing with appropriate authorities statutory dues including provident fund, investor education and protection fund, employee's state insurance, sales tax, custom duty, excise duty, Cess and other material statutory dues applicable to it except income tax payable for the assessment year 2011-12 for an amount of Rs.10,948,100

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, exercise duty and Cess were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable, except the following:

Sl Act Under which the Amount pertaining to Amount No. amount is payable

1. Income Tax Act Regular tax for asst year 2011-12 1,09,48,100

2. Income Tax Act Fringe Benefit Tax for asst year 2009-10 2,53,895

c) According to the information and explanations given to us, there is no undisputed tax pending for payment. However the company has disputed tax pending for payment is Rs 151 lacs pertaining the financial year 2003-04 &2004-05

X In our opinion, there is no accumulated loss. The Company has not incurred any cash loss during the financial year covered under the audit and also immediately preceding financial year.

XI According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks and Financial institutions. The Company has not issued any debentures.

XII Based on our examination of the records and of 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 or other securities.

XIII In our opinion the company is not a chit fund or Nidhi / Mutual benefit fund/ Society. Therefore the provisions of clause 4(Xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XIV In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(XVI) 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 and Financial Institutions.

XVI In our opinion, the Company has availed term loan for Rs.20 Crores and vehicle loans from ICICI Bank Ltd for Rs 6,59,000/- during the year in addition to previously sanctioned Loans carried over to this year and these loans were utilized only for the purpose for which it is sanctioned.

XVII According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

XVIII During the year the Company did not make any preferential allotment to any persons covered under the register maintained under section 301 of the Companies Act, 1956.

XIX According to the information and explanations given to us, the company has not issued any debentures during the year and hence the provisions of clause no 4(XIX) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

XX According to the information and explanations given to us, the company has not raised the money by way of public issues during the year.

XXI According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

Place: Chennai For V.Ramaratnam & Co

Date : 30-05-2012 Chartered Accountants

R. Sundar

Partner

Firm Regn No.002956S

PRN 005295

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Mar 31, 2011

We have audited the attached Balance Sheet of VIJAY SHANTHI BUILDERS LIMITED Chennai as at 31st March 2011 and the 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 Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the manufacturing and other Companies (Auditor's report) order 2003 and (Amendment) Order 2004 issued by the Company Law Board in terms of section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order.

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

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

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

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

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

e) Based on the written representation received from Directors as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2011 from being appointed as Director under section 274(1)(g) of 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 so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March 2011.

In so far as it relates to the Profit and Loss Account, of the profit for the year ended on that date.

And In so far as it relates to cash flow statement, the cash flow of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS OF VIJAY SHANTHI BUILDERS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2011

a) The Company has maintained proper records showing particulars, including quantitative details and situation of Fixed Assets.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noted on such verification.

c) During the year, the Company has disposed off the fixed assets, which are not substantial. According to the information and explanations given to us, we are of the opinion that the sale of fixed assets has not affected the going concern status of the Company.

II a) The Inventory has been physically verified during the year 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 its nature of business.

c) The Company is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records.

III a) The Company has taken loan from Companies, firms covered in the register maintained under section 301 of the Companies Act, 1956.The unsecured loan is taken from ten persons and the maximum amount outstanding during the year is Rs 49270376/-

b) In our opinion, the terms and conditions on which loans was taken from the parties listed in the register maintained under section 301 of the Companies act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c) There is no stipulation regarding payment of principal amounts and interest.

IV a) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory and assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V a) According to the information and explanations given to us, we are of the opinion, that the transactions 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 transactions made exceeding the value of Rs 5,00,000/- with parties maintained under section 301 of the Companies at., 1956 are not made under any contracts of arrangements but at the price at which it is made are reasonable to prevailing market price.

VI a) The company has not accepted any fixed deposits during the year in respect of which Section 58A of the Companies Act, 1956 is applicable. However the company has taken short term loan which is repayable within a period of 11 months.

VII a) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. Outside audit firm is doing internal audit and they are giving periodical report to the management and it is quiet adequate.

VIII a) The maintenance of cost records has not been prescribed by the Central Government under section 209(1) of the Companies Act, 1956

IX a) The Company is regular in depositing with appropriate authorities statutory dues including provident fund, investor education and protection fund, employee's state insurance, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, exercise duty and cess were in arrears as at 31st March 2011 for a period of more than six months from the date they became payable. However the company has not remitted the FBT Tax for the financial year 2008-09 of Rs 253895 on the date of signing this report,

c) According to the information and explanations given to us, there is no undisputed tax pending for payment. However the company has disputed tax pending for payment is Rs 151 lacs pertaining the financial year 2003-04 &2004-05

X a) In our opinion, there is no accumulated loss. The Company has not incurred any cash loss during the financial year covered under the audit and also immediately preceding financial year.

XI a) According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks and Financial institutions. The Company has not issued any debentures.

XII a) Based on our examination of the records and of 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 or other securities.

XIII a) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4(Xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

XV a) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

XVI a) In our opinion, the Company has availed term loan for 55 Crores and vehicle loans from ICICI Bank Ltd for Rs 3910385/- during the year in addition to previously sanctioned Loans carried over to this year and these loans were utilized only for the purpose for which it is sanctioned.

XVII a) According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

XVIII a) Allotment of shares to the parties was made and it is covered in the register maintained under section 301 of the companies Act, 1956. According to the information and explanations given to us, the company has made preferential allotment of 13465070 equity shares of Rs 10 each at premium of Rs20/- per share. These allotments were made as per the High Court Order approving scheme of amalgamation.

XIX a) According to the information and explanations given to us, the company has not issued any debentures during the year and hence the provisions of clause no 4(XIX) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

XX a) According to the information and explanations given to us, the company has not raised the money by way of public issues during the year.

XXI a) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For V.Ramaratnam & Co Chartered Accountants R. Sundar Partner Firm Registration No: 002956S PRN 005295

Place Chennai Date 30.05.2011

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Mar 31, 2010

We have audited the attached Balance Sheet of VIJAY SHANTHI BUILDERS LIMITED Chennai as at 31st March 2010 and the 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.

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 whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the manufacturing and other Companies (Auditors report) order 2003 and (Amendment) Order 2004 issued by the Company Law Board in terms of section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order.

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

A) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

B) In our opinion, the Company, as required by law, has kept proper books of accounts so far as appears from our examination of those books.

C) The Balance Sheet and Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

D) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement comply with the Accounting Standards as referred to in sec 211(3C) of the Companies Act, 1956.

E) Based on the written representation received from Directors as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as Director under section274(1)(g) of 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 themanner so

required and give a true and fair view:- In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March 2010

In so far as it relates to the Profit and Loss Account, of the profit for the year ended on that date And In so far as it relates to cash flow statement, the cash flow of the Company for the year ended on that date.

ANNEXURE FOR AUDITORS REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS OF VIJAY SHANTHI BUILDERS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

I A) The Company has maintained proper records showing particulars, including quantitative details and situation of Fixed Assets.

B) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noted on such verification.

C) During the year, the Company has disposed off the fixed assets, which is not substantial. According to the information and explanations given to us, we are of the opinion that the sale of fixed assets has not affected the going concern status of the Company.

II A) The Inventory has been physically verified during the year 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 its nature of business.

C) The Company is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records.

III A) The Company has taken loan from Companies, firms covered in the register maintained under section 301 of the Companies Act, 1956.The unsecured loan is taken from eight persons and the maximum amount outstanding during the year is Rs. 40856437/- B) In our opinion, the terms and conditions on which loans was taken from the parties listed in the register maintained under section 301 of the Companies act, 1956 are not, prima facie, prejudicial to the interest of the Company.

C) There is no stipulation regarding payment of principal amounts and interest.

IV A) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory and assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V A) According to the information and explanations given to us, we are of the opinion, that the transactions 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 transactions made exceeding the value of Rs 5,00,000/- with parties maintained under section 301 of the Companies at., 1956 are not made under any contracts of arrangements but at the price at which it is made are reasonable to prevailing market price.

VI A) The company has not accepted any fixed deposits during the year in respect of which Section 58A of the Companies Act, 1956 is applicable.

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

VIII A) The maintenance of cost records has not been prescribed by the Central Government under section 209(1) of the Companies Act, 1956

IX A) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, custom duty, excise duty, Cess and other material statutory dues applicable to it.

B) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, exercise duty and Cess were in arrears as at 31st March 2010 for a period of more than six months from the date they became payable.

C) According to the information and explanations given to us, there is no undisputed tax pending for payment. However the company has disputed tax pending for payment which is Rs.151 Lakhs pertaining to the financial year 2005 – 2006 and 2006 – 2007.

X A) In our opinion, there is no accumulated loss. The Company has not incurred any cash loss during the financial year covered under the audit and also immediately preceding financial year.

XI A) According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks and Financial institutions. The Company has not issued any debentures.

XII A) Based on our examination of the records and of 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 or other securities.

XIII A) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4(Xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

XIV A) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(XVI) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

XV A) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

XVI A) In our opinion, the Company has availed car loans from Kotak Mahindra Prime Ltd during the year in addition to previously sanctioned Loans carried over to this year and these loans were utilized only for the purpose for which it is sanctioned.

XVIIA) According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

XVIIIA) According to the information and explanations given to us, the company has not made any preferential allotment of shares to the parties covered in the register maintained under section 301 of the companies Act, 1956 during the year.

XIX A) According to the information and explanations given to us, the company has not issued any debentures during the year and hence, the provisions of clause no 4(XIX) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company.

XX A) According to the information and explanations given to us, the company has not raised the money by way of public issues during the year.

XXI A) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For V.Ramaratnam & Co

Chartered Accountants

Sd/-

R. Sundar

Partner

Firm Registration No: 0029568

Place: Chennai

Date: 29.05.2010