Auditor Report of VKS Projects Ltd.

Mar 31, 2015

Report on the Financial Statements

1. We have audited the accompanying financial statements of VKS PROJECTS LIMITED (CIN - L74210MH1998PLC113596) ("The Company"), which comprises 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 the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. 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 to 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 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.

Auditors' Responsibility

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

4. 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.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute if Chartered Accountants of India. Those Standards and pronouncements 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.

6. 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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.

7. 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.

Emphasis of Matter

8. We invite attention to Note no 24 (ii) to the financial statements regarding non reconciliation and non availability of balance confirmation from Various Lenders, Sundry Creditors, Trade Receivables and parties to whom Loans and Advances and Deposits have been made.

9. As referred in Note 24 (iiii) to the financial statement, the company have not complied with section 203 & section 134 (1) of Companies Act, 2013.

Opinion

10. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the above matter and subject to our remarks as stated in notes hereunder vide Annexure "A", aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

11. As required by "the Companies (Auditor's Report) Order, 2015 ("the Order")", issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we consider appropriate and according to the information and explanation given to us, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

12. 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;

e. On the basis of the written representations received from the directors as on March 31, 2015 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; and

f. With respect to the other matters to be included in the Auditors 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:

- The Company has disclosed the impact, if any, of pending litigations as at March 31, 2015 on its financial position in its financial statements - Refer Note No. 24

- the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts i.e Nil; and

the Investor Education and Protection Fund by the Company during the year ended March 31, 2015 - NA.

(Referred to in our report of even date)

1) In respect of Fixed Assets:

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

b) As explained to us, the assets have been physically verified by the management in accordance with a phased program of verification of its Fixed Assets including Capital Work in Progress adopted by the Company which, in our opinion, is reasonable, considering the size and the nature of its business. No material discrepancies have been noticed on such physical verification, however no such report provided to us for verification;

2) INVENTORIES

a) According to the information and explanations given to us, the inventory has been physically verified by the management during and at the close of the year.

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

c) The company is maintaining proper records of inventory. As explained to us, no discrepancies were noticed on physical verification between physical stocks and book records. However, physical verification reports are not produced before us for verification.

3) In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013: a) According to the information and explanations given to us, the company has granted unsecured loan. The amount and number of parties involved are INR 7527000/- and

2 parties respectively with closing balance being INR 6829000/- of 2 parties respectively.

b) The company has granted aforementioned advances as non-interest bearing advances.

c) Terms and conditions for the repayment of the loan granted at clause (a) above is not specified, hence regularity of receipt of loan amount could not be commented upon.

d) In view of clause 3(c) above, clause 3(d) are not applicable.

e) According to the information and explanations given to us, the company has taken unsecured loan. The amount and number of parties involved are INR 8569486/- and 1 parties respectively with closing balance being INR 14407556/- of 2 parties respectively.

f) The company has taken aforementioned advances as non-interest bearing advances.

g) Terms and conditions for the repayment of the loan granted at clause (a) above is not specified, hence regularity of receipt of loan amount could not be commented upon.

h) In view of clause 3(c) above, clause 3(d) are not applicable.

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

However the internal controls over accounting of consumptions, wastage, material reconciliation needs further strengthening.

5) In our opinion and according to the information and explanations given to us, the company has not complied with the provision of section 76 or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2013 with regard to the deposits accepted from the public and the directives issued by the

Reserve Bank of India in this matter. According to the information and explanation given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard.

6) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Sub- Section (1) of Section 148 of the act and are of the opinion that prima facie the , prescribed cost records have been maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7) In respect of Statutory dues:

a) The Company is not regular (defaulted) in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, custom duty, excise duty and other statutory dues, applicable to it with a closing balance as on March 31, 2015 for Service Tax, Sales Tax and Income Tax. Service Tax dues as at the end of the year were Rs. 2,86,58,152/- Sales Tax were of Rs. 6,92,851, TDS were of Rs. 1,37,88,531/- and Income tax were Rs.2,76,17,021/-.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, custom duty, sales tax, excise duty and other statutory dues were outstanding, as at March 31, 2015 for a period of more than six months from the date were they became payable except the followings.

Sr. No. Particulars Amount Outstanding for more than 6 months as on March 31, 2015

1 Income Tax 2,76,17,021

2 Service Tax 2,86,58,152

3 Sales Tax 6,92,851

4 Tax Deducted at Source 1,37,88,531

Note: The sales tax department has initiated proceedings for various financial years starting from 2006-07 to 2012-13 on the company, in the absence of the detailed information and explanation in respect of Tax Liability, Interest and Penalty thereon, we are unable to comment upon the impact of the same on the statement of profit and loss account.

c) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth tax, service tax and cess which have not been deposited on account of any dispute however the demand raised by the sales tax departments are still pending for deposition however exact demand amount is not provided to us by the management hence impact of the same is not commented.

8) The Company does not have accumulated losses at the end of the financial year and the company has incurred cash losses amounting to INR 13.66 Lacs during financial year and INR 561 Lacs in the immediately preceding financial year.

9) In our opinion and according to the information and explanations given to us and based on the documents and records produced to us that the company has defaulted in repayment of dues to financial institution and banks during the financial year covered under audit.

10) According the information and explanation given to us and records produced before us, the Company has not given any guarantee for loans taken by others from banks or financial institution during the year. Accordingly this clause is not applicable to the Company.

11) In our opinion and according to information and explanation given to us, the Company has not raised any Terms Loans during the year under audit hence this clause is not applicable to the Company.

12) According the information and explanation given to us, no instances of material fraud on or by the Company has been noticed or reported during the course of our audit.

Annexure "A"

1. Inability to comment on Inter Corporate Deposits and Other Loans and Advances taken from various parties as at March 2015, in the absence of third party confirmation, reconciliation, if any and other sufficient appropriate audit evidence.

2. No Provision is made for Interest Payable on Inter Corporate Deposits and Other Loans and Advances taken by the Company and no provision made of Interest Receivable on Inter Corporate Deposits and Other Loans and Advances provided by the Company, consequently the profit / loss of the quarter are not ascertainable.

3. Inability to comment on Trade Payables and dues to Related Parties as at March 2015, in the absence of the third party confirmation, reconciliation, if any and other sufficient appropriate audit evidence.

4. No Provision made for Interest payable on Loans taken from Banks and NBFC Companies which are already been declared as NPA, consequently the loss of the quarter is not ascertainable.

5. Inability to comment on Balance Recoverability, if any of Trade Receivables and Other Short Term Loans and Advances as at March 2015, in the absence of sufficient appropriate audit evidence.

6. Inability to comment on Balance Recoverability, if any of Sundry Deposits and Other Current Assets as at March 2015, in the absence of sufficient appropriate audit evidence.

7. With reference to Fixed Deposits Accepted by the Company, the Company has defaulted in repayment of dues as at March 2015. Further, the Company has not made provisions for penal interest as per the Companies (Acceptance of Deposits) Rule 2014. The Company has not intimated to the tribunal on monthly basis about the default in repayment as per section 73(4) of the Companies Act 2013 corresponding to section 58AA of the Companies Act 1956.

8. Inability to comment on impairment provisions, if any as per the Accounting Standard 28 "Impairment of Assets" on Plant and Machinery along with other fixed assets amounting to INR 1281.46 Lacs situated at various sites of the Company which have been generally operating at lower capacity, in the absence of future cash flows projection and information about the value of use.

9. A notice has been issued by the State Bank of India under section 13 (12) read with rule 3 of the Security Interest (Enforcement) Rules, 2002 for non repayment of installments and interest thereon after the due date by the Company and therefore all the loan accounts became Non Performing Assets with effective from respective dates mentioned in such notice. We are informed that the Company has filed response against such notices and requested to restructure the loan accounts. These factors along with other matter as set forth in said notice, raise substantial doubt about the company's ability to continue as going concern in the foreseeable future however the company's financial statements have been prepared on going concern basis on the basis of management assurance.

10. Inability to comment on Impairment provisions, if any on loan of INR 32,12,000/- given to VKS Edserve Private Limited ("the related party"), in the absence of last audited financial statements, detailed information of projected cash flows as at March 2015 or other sufficient appropriate audit evidence. Further Inability to comment on Impairment provisions, if any on loan of INR 36,17,000/- given to VKS Healthcare Private Limited ("the other related party"), in the absence of last audited financial statements, detailed information of projected cash flows as at March 2015 or other sufficient appropriate audit evidence.

11. Tangible Assets are stated at cost net of recoverable taxes, trade discounts, and rebates, less accumulated depreciation.

12. Depreciation on Fixed Assets is provided to the extent of depreciable amount on Written Down Value (W.D.V.) Method. Depreciation is provided based on useful life of asset described in Schedule II to the Companies Act, 2013.

13. The Sales Tax Department initiated proceedings for various financial years starting from 2006-07 to 2012-13 on the Company, in the absence of the detailed information and explanation in respect of Tax Liability, Interest and Penalties thereon, we are unable to comment upon the impact of the same on the statement of profit and loss account.

14. It is informed to us that the Company has not complied with the provisions of filing of Returns for TDS during the period under review however the company has not provided the effect of the same in the books of accounts.

15. As per explanation and information provided to us by the Company Management about the Future Business of the Company, Realization of Current Assets and Default in Repayment of loans to Banks and NBFC's, the Going Concern assumption of the Company in near future is considered inappropriate, as there is significant material impact on the Company's Going Concern after the due action taken by the Banks and NBFC's for default of repayment of dues however the company's financial statements have been prepared on going concern basis on the basis of management assurance.

16. The Company has not provided us the details of pending litigation against the company and its directors for various matters including the financial matters hence we are not able to comment upon the financial impact of the same on the financial statements.

For Maheshwari & Co.

Chartered Accountants

Firm Registration Number: 105834W

Pawan Gattani

(Partner)

Membership Number: - 144734

Place: Mumbai

Date: May 29, 2015

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Mar 31, 2014

We have audited the accompanying financial statement of VKS PROJECTS LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of Significant accounting policies and other explanatory statements.

Management Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statement 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") which shall continue to apply in respect of section 133 . This responsibility includes the design, implemeof the Companies Act 2013 in terms of General Circular 15/2013 dated September 13, 2013 issued by the Ministry of Corporate Affairs. 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 amount and disclosure in financial statements. The procedure selected depends on the auditor''s judgment, including the assessment of risk of the material misstatement of the financial statement, 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 procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimate 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 audit opinion.

Emphasis of Matter

We invite attention to note no 2(ii) to the financial statements regarding non reconciliation and non availability of balance confirmation from Various Lenders, Sundry Creditors, Trade Receivables and parties to whom Loans and Advances and Deposits have been made.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the above matter, the accompanying 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 principal generally accepted in India.

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

and

ii) In the case of the Statement of Profit & Loss, of the profit for the year ended on that date.

iii) 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 as amended by companies (Auditor''s report) Amendment order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 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.

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

i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii) 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;

iii) the Balance Sheet, the Statement of Profit & Loss, and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the accounting standards notified under 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;

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

vi) 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.

Annexure to Independent Auditor''s Report

Report in terms of Paragraph 4 and 5 in Section 227(4A) of the Companies Act, 1956 (Companies (Auditor''s Report) Order, 2003), issued by the Central Government:

1. FIXED ASSETS

a. The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets;

b. As explained to us, the assets have been physically verified by the management in accordance with a phased program of verification of its Fixed Assets including Capital Work in Progress adopted by the Company which, in our opinion, is reasonable, considering the size and the nature of its business. No material discrepancies have been noticed on such physical verification, however no such report provided to us for verification;

c. According to information and explanations given to us, the company has not disposed off substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. INVENTORIES

a. According to the information and explanations given to us, the inventory has been physically verified by the management during and at the close of the year.

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

c. The company is maintaining proper records of inventory. As explained to us, no discrepancies were noticed on physical verification between physical stocks and book records. However, physical verification reports are not produced before us for verification.

3. LOANS AND AD VANCES GRANTED / TAKEN FROM CERTAIN ENTITIES

In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

a) The Company has not given loans any company where director has direct/indirect controls on the same.

b) The Company has also taken an unsecured loan from parties covered in the Register required to be maintained under section 301 of the Companies Act, 1956. In this connection we were informed that those transactions are in the nature of current account.

c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of these transactions, prime facie not prejudicial to the interest of the Company.

d) In our opinion and according to the information and explanation given to us, there is no overdue amount of loans and interest.

4. INTERNAL CONTROL SYSTEM

In our opinion and according to the information and explanations given to us, there is internal control system for the purchase of inventory and fixed assets and for the sale of goods and services commensurate with the size of the company and the nature of its business. However the internal controls over accounting of consumptions, wastage, material reconciliation needs further strengthening.

5. CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT, 1956

a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the act that need to be entered in the Register required to be maintained under that section, have been entered however the same has not been produced for our verification; and

b) In our opinion and according to the information and explanations given to us, in respect of transactions which have been made in pursuance of contracts or arrangement entered in the register maintained under Section 301 and exceeding the value of INR 5,00,000/- in respect of any party during the period, have been made at prices which are reasonable having regard to the prevailing market price at the relevant time, where comparable market price exist.

6. ACCEPTANCE OF DEPOSITS

In our opinion and according to the information and explanations given to us, the company has not complied with the provision of section 58A or 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public and the directives issued by the Reserve Bank of India in this matter. According to the information and explanation given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard.

7. INTERNAL A UDIT SYSTEM

According to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business however no such reports have been produced before us for our verification.

8. COST RECORDS

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the , prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. STATUTORY DUES

According to the information and explanations given to us, in respect of statutory and other dues:

(a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, excise duty and other statutory dues, applicable to it except for Service Tax, Sales Tax and Income Tax. Service Tax dues with interest as at the end of the year were Rs. 2,77,81,785/-, Sales Tax were of Rs. 9,53,730, TDS were of Rs. 1,12,84,168/- and that of Income tax were Rs.2,76,29,113/-.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, sales tax, excise duty and other statutory dues were outstanding, as at March 31, 2014 for a period of more than six months from the date were they became payable except the followings. Sr. Particulars Amount Outstanding for more No. than 6 months as on March 31, 2014 1 Income Tax 2,76,29,113.00

2 Service Tax 2,45,18,344.00

3 Sales Tax 4,91,900.00

4 Tax Deducted at Source 1,12,84,168.00

(c) According to the information and explanations given to us and based on records produced to us, there are no dues of Income tax, Service tax, Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, sales tax and excise duty, which have not been deposited on account of any dispute.

10. ACCUMULATED LOSSES

The Company has no accumulated losses at the end of the financial year however it has incurred cash losses during the financial year covered by our audit but not in the immediately preceding financial year.

11. DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS

According to the information and explanations given to us and based on the documents and records produced to us, the Company has defaulted in repayment of dues to financial institutions or banks during the financial year covered under audit.

12. SECURITY FOR LOANS & ADVANCES GRANTED

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 and accordingly, this clause is not applicable to the Company;

13. SPECIAL STATUTE

In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/ societies and accordingly, this clause is not applicable to the Company;

14. DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHER INVESTMENTS

The Company does not deal or trade in shares, securities, debentures and other investments and hence, this clause is not applicable to the Company;

15. GUARANTEES GIVEN

According to the information and explanations given to us, the company has not given any guarantee for loans taken from banks or financial institutions by others, therefore the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

16. TERM LOANS

In our opinion and according to the information and explanation given to us, the term loans have been applied by the Company during the year for the purpose for which they were obtained, other than temporary deployment pending application.

17. UTILISA TION OF FUNDS

According to the information and explanations given to us, on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investment;

18. PREFERENTIAL ALLOTMENT OF SHARES

During the year, the Company has not made any preferential allotment of shares to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 and this clause is not applicable to the Company;

19. SECURITY FOR DEBENTURES ISSUED

The Company has not issued any debentures during the year and accordingly, this clause of the order is not applicable to the Company;

20. PUBLIC ISSUE OF EQUITY SHARES

We have verified the end use of funds raised by public issue during the year as disclosed in note 2(vii) to the financial statements;

21. FRAUDS NOTICED

During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

For Maheshwari & Co. Chartered Accountants Firm Registration Number: 103854W

(Pawan Gattani) Partner Membership Number - 144734

Place: Mumbai Date: June 13, 2014

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Mar 31, 2013

Report on Financial Statements

1. We have audited the accompanying financial statement of VKS PROJECTS LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of Significant accounting policies and other explanatory statements.

2. Management Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statement 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 refereed to in sub-section (3C) of section 211 of the companies act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to preparation and presentation of the financial statement that give a true and fair view and free from material misstatement, whether due to fraud or error.

3. 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 amount and disclosure in financial statements. The procedure selected depends on the auditor''s judgment, including the assessment of risk of the material misstatement of the financial statement, 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 procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimate 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 audit opinion.

4. 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 principal generally accepted in India

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013; and

b. In the case of the Statement of Profit & Loss, of the profit for the year ended on that date.

c. In the case of the Cash flow Statement, of the cash flows for the year ended on that date.

5. Report on other legal and regulatory requirements:-

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by companies (Auditor''s report) Amendment order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 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.

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

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

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

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

d. Also comply with the accounting standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956;

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

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.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under the heading of "Report on other legal and regulatory requirements" of our report of even date)

FIXED ASSETS :

1. (a) As informed, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) We were also informed that all the fixed assets have been physically verified by the management in a phased periodical manner during the year and that no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size and nature of the Company.

(c) The Company has not disposed off a substantial part of its fixed assets during the year and accordingly, the going concern status is not affected.

INVENTORIES :

2. (a) We are informed that the inventories have 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 nature of its business.

(c) According to the inventory records produced to us for our verification, we are of the opinion that the Company is maintaining records for inventories but the same needs improvement in the manner such as product, quantity etc. Further, discrepancies noticed on such physical verification of inventories, if any, referred to above, as compared to the book records, though not material, have been properly dealt with in the books of account.

RELATED PARTY TRANSACTION :

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

(a) The Company has given loans to two companies where director has direct controls on the same. In respect of the said loans, the maximum amount outstanding at any time during the year was '' 470.95 lacs and the year-end balance is '' Nil.

(b) The Company has also taken an unsecured loan from parties covered in the Register required to be maintained under section 301 of the Companies Act, 1956. In this connection we were informed that those transactions are in the nature of current

(c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of these transactions, prime facie not prejudicial to the interest of the Company.

(d) In our opinion and according to the information and explanation given to us, there is no overdue amount of loans and interest.

INTERNAL CONTROLS :

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems/procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods & services. However in our opinion, the Company needs to strengthen the internal controls considering the volume of activities in the Company. During the course of our audit we have not observed any continuing failure to correct major weakness in the internal controls system.

5. In our opinion and according to the information and explanation provided to us, there are no contracts or arrangements of purchase or sale of goods that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956.

DEPOSITS :

6. The Company has accepted the deposits from the public during the financial year 2012-13. However, the directives issued by the Reserve Bank of India and the provisions of Section 58A and Section 58AA of the Companies Act, 1956 are not complied with.

INTERNAL AUDIT :

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

COST AUDIT :

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1) (d) of the Companies act, 1956 and are of the opinion that prima facie the prescribed cost records has been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

STATUTORY DUES :

9. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, sales tax, excise duty and other statutory dues, applicable to it except for Service Tax and Income Tax. Service Tax dues with interest as at the end of the year were Rs. 2,52,78,476/-and that of Income tax were Rs.2,68,52,094/-..

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, sales tax, excise duty and other statutory dues were outstanding, as at 31stMarch, 2013 for a period of more than six months from the date were they became payable except the followings.

Sr. No. Particulars Amt. O/s for more than 6 months

1 Income Tax 1,40,43,243

2 Service Tax 1,33,48,320

(c) According to the information and explanations given to us and based on records produced to us, there are no dues of Income tax, Service tax, Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, custom duty, sales tax and excise duty, which have not been deposited on account of any dispute.

10. In our opinion, the Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our examination of the records and the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank.

12. Based on our examination of documents and records, we are of the opinion that the Company has not granted loans and advances on the basis of security or by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provision of clause 4 (xiv) of Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

16. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they are raised.

17. In our opinion and according to information and explanation given to us, there are no funds raised on a short-term basis, which have been used for long-term investments.

18. The Company has not made any preferential allotment of equity shares during the financial year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year or in previous year.

20. We have verified the end use of funds raised by public issue during the year as disclosed in Note 2(vii) to the financial statements.

21. According to the information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

BORKAR & MUZUMDAR

Chartered Accountants

(Firm Reg. No: 101569W)

Sd/-

Vivek Jain

(M.No. 119700)

Partner

Place: Mumbai

Date: May 29th, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of VKS PROJECTS LIMITED as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain a 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment), 2004 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we given in the Annexure a statement on the matters specified under clause 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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, proper books of account, as required by law have been kept by the Company so far as appears from our examination of the books.

c) The Balance Sheet, Statement of Profit & 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 & Loss and Cash Flow Statement dealt with by this report are in compliance with Accounting Standard referred to in Section 211 (3C) ofthe Companies Act, 1956.

e) On the basis of representations received from the Directors of the Company and taken on record by the Board of Directors, none of the Directors of the Company is prima facie as on 31st March, 2012 disqualified from being appointed as Director of the Company under clause (g) of sub section (1) of Section 274 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 read together with Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

(iii) in the case of the Cash Flow statement, of the cash flows fcr the year ended on that date.

FIXED ASSETS:

1. (a) As informed, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) We were also informed that all the fixed assets have been physically verified by the management in a phased periodical manner during the year and that no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size and nature of the Company.

(c) The Company has not disposed off a substantial part of its fixed assets during the year and accordingly, the going concern status is not affected.

INVENTORIES:

2. (a) We are informed that the inventories have 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 nature of its business.

(c) According to the inventory records produced to us for our verification, we are of the opinion that the Company is maintaining records for inventories but the same needs improvement in the manner such as product, quantity etc. Further, discrepancies noticed on such physical verification of inventories, if any, referred to above, as compared to the book records, though not material, have been properly dealt with in the books of account.

RELATED PARTY TRANSACTION:

3. (a) As informed to us and on the basis of our examination, the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms, or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. However, there are transactions with the parties referred under the above section. In this connection we were informed that those transactions are in the nature of current account.

(b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of these transactions, prime facie not prejudicial to the interest of the Company.

(c) In our opinion and according to the information and explanation given to us, there is no overdue amount of loans and interest.

INTERNAL CONTROLS:

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems/procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods & services. However in our opinion, the Company needs to strengthen the internal controls considering the volume of activities in the Company. During the course of our audit we have not observed any continuing failure to correct major weakness in the internal controls system.

5. In our opinion and according to the information and explanation provided to us, there are no contracts or arrangements of purchase or sale of goods that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956.

DEPOSITS:

6. The Company has accepted the deposits from the public during the financial year 2011-12. However, the directives issued by the Reserve Bank of India and the provisions of section 58A and section 58AA are not complied with.

INTERNAL AUDIT:

7. During the financial year, no in t ernal audit has been carried out by the company.

COST AUDIT:

8. We were informed that the Central Government has not prescribed under section 209(1) (d) of the Companies act, 1956 maintenance of cost records for any of the products manufactured by the Company.

STATUTORY DUES:

9. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including wealth tax, custom duty, sales tax, excise duty and other statutory dues, applicable to it except for Service Tax and Income Tax. Service Tax dues with interest as at the end of the year were Rs. 1,20,97,305/- and that of Income tax were Rs. 1,60,76,093.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of sales tax, wealth tax, customs duty and excise duty were outstanding, as at 31st March, 2012 for a period of more than six months from the date were they became payable except the followings.

Sr. No. Particulars Amt. O/s for more than 6 months

1 Income Tax 1,28,12,527

2 Service Tax 28,46,884

(c) According to the information and explanations given to us and based on records produced to us, there are no dues of income tax, sales tax, wealth tax, service tax, customs duty and excise duty, which have not been deposited on account of any dispute.

10. In our opinion, the Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our examination of the records and the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank.

12. Based on our examination of documents and records, we are of the opinion that the Company has not granted loans and advances on the basis of security or by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provision of clause 4 (xiv) of Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

16. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they are raised.

17. In our opinion and according to information and explanation given to us, there are no funds raised on a short-term basis, which have been used for long-term investments.

18. The Company has not made any preferential allotment of equity shares during the financial year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year or in previous year.

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

21. According to the information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

BORKAR & MUZUMDAR

Chartered Accountants

(Firm Reg. No: 101569W)

sd/-

Devang Vaghani

(M.No. 109386)

Partner

Place: Mumbai

Date: September 26,2012