MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Management and Board of Directors of the Company are 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 Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We 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 provision of the Act and Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's management and Board of 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 qualified audit opinion and except to these standards could not be applied in their entirety for want of adequacy of appropriate internal control system and accounting procedures followed by the Company.

Basis for Qualified Opinion:

1) Attention is invited to Note no. 36 of the standalone financial statements; the Company has recognized revenue of Rs. 16,415.59 lacs on certain projects arising out of deviation in designs and/or scope of work, liquidity damage/PRS for which acceptance by the clients are awaited. The amount of such certification cannot therefore be measured reliably. In the absence of sufficient appropriate audit evidence regarding the extent to which such claims/scope variations will be accepted by the clients, we are unable to comment on the appropriateness of such revenue as recorded in the financial statements, the amounts that will be ultimately realised and the consequent impact, if any, on the reported loss for the year ended March 31, 2015 and corresponding assets and liabilities as at that time.

2) Attention is invited to Note no. 37 of the standalone financial statements, regarding bank guarantee invoked by "Arabian Pipeline Projects Company" (APPCO) of Rs. 6,051.04 lacs. The Company has not made any provision in its financial statements in respect of bank guarantee invoked. The Company has filed the suit before Hon'ble City Civil Court, Ahmedabad against the invocation of bank guarantee and the Hon'ble Court has granted stay. The Company has also referred the dispute to "The London Court of International Arbitration" for arbitration. In view of the pending litigation and uncertainty of outcome of such pending litigation, we are unable to quantify and comment upon the liability that may devolve on the Company on account of such invoked bank guarantee. Our audit opinion on the financial statement for the year ended March 31, 2015 is qualified in respect of above matter.

3) Attention is invited to Note no. 38 of the standalone financial statements regarding invocation of bank guarantee of Rs. 4,738 lacs by "Brahmaputra Cracker and Polymer Limited" (BCPL) on April 17, 2015. The Company has not made any adjustment in respect of bank guarantee invoked, which constitutes departure from the Accounting Standard (AS)-4 on "Contingencies and Events Occurring After the Balance Sheet Date", issued by the ICAI, which requires adjustment to be made in assets and liabilities for events occurring between the balance sheet date and the date on which financial statements have been approved.

4) Attention is invited to Note no. 39 of the standalone financial statements; The Company has made investments in its subsidiaries aggregating to Rs. 665.0 lacs reported under "Non-Current Investments". There is erosion of net worth, current year losses, legal cases by lenders and creditors against the said subsidiaries, which may result into the permanent diminution in the value of investments. In spite of this, the Company has reported these investments at cost. This constitutes departure from Accounting Standard (AS)-13 "Accounting for Investment" issued by the ICAI, which requires ascertainment and provision for diminution, other than temporary, in the carrying amount of investment

5) Attention is invited to Note no. 40 of the standalone financial statements, The Company has reversed Interest expense of Rs. 754.11 lacs on loans from banks by way of credit to "Interest Expenses" in statement of profit and loss account for which confirmations from the bank are not made available, resulting into the understatement of loss and liabilities by Rs. 754.11 lacs.

6) Attention is invited to Note no. 41 of the standalone financial statements; The Company has not provided interest on amounts borrowed from the NBFCs aggregating to Rs. 2215.02 lacs as on March 31, 2015 (Previous year Rs. 3033.10 lacs). As balance confirmation and / or statement of loan accounts from NBFCs are not made available to us, we are unable to ascertain the impact of non-provision of interest on amounts borrowed from NBFCs on financial statements. The amount due to NBFCs is disclosed based on the information available with the management and subject to reconciliation.

7) As stated in Note no. 42 of the standalone financial statements regarding pending confirmation of balances in respect of Trade Payables, Other Current Liabilities, Long Term Loans & Advances, Trade Receivables, Short Term Loans & Advances and Other Current Assets, we are unable to comment on the impact of arising out of reconciliation/ adjustments, if any, required upon such confirmation.

8) In absence of adequate working papers on physical verification of Inventories, discrepancies, if any, between book and physical inventories could not be ascertained including effect of the same in financial statements of the Company.

9) As stated in note no. 43 of the standalone financial statements regarding write back of old liabilities of Rs. 1,353.21 lacs and write off of old receivables of Rs. 397.28 lacs. In absence of adequate supporting documents, we are unable to comment on effect of the same in financial statements of the Company.

10) Attention is invited to Note no. 44 of the standalone financial statements regarding uncertainties relating to recoverability of trade receivable aggregating to Rs. 12,013.96 lacs recognized in the earlier years in respect of project which are suspended or substantially closed and where the claims are currently under negotiations/arbitration/litigation. Pending the ultimate outcome of these matters, which is presently unascertainable, no adjustments have been made in the accompanying standalone financial statements. Our opinion is qualified in respect of this matter.

11) We draw attention to Note no. 45 of the standalone financial statements regarding the assets, liabilities, revenue and expenditure of project at "Kingdom of Saudi Arabia" (KSA) accounted for in the financial statements on the basis of unaudited financial information of project at "Kingdom of Saudi Arabia" (KSA) available with the Company because of the reasons stated therein. We have not carried out audit procedures to verify the financial figures of this shared project accounted for in the financial statements of the Company. The financial statements of project at "Kingdom of Saudi Arabia" (KSA) are reported on the basis of management's internal assessment and legal opinion obtained by the Company, and we are unable to comment and give any opinion on the transactions/balances accounted for in the books of accounts of the Company.

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 basis for qualified opinion paragraph, the aforesaid standalone 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 affair of the Company as at March 31, 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to Note no. 46 of the standalone financial statements, regarding the Company's ability to meet its financial obligations including loans, overdue loans, unpaid interest, and ability to fund obligations pertaining to operations including unpaid creditors and investment in ongoing projects for ensuring normal operations. During the year the Company incurred the net loss of Rs. 1,792.43 lacs and has loan aggregating to Rs. 2,470.97 lacs falling due over next twelve months period which also includes unpaid dues of Company as at March 31, 2015. These matters require the Company to raise such additional cash flows to the fund the operations as well as the investment obligations towards on- going projects. However the financial statements have been prepared under the assumption, considering the management's assessment to recover the dues from the customers, divestment of existing assets and management plan to get requisite funding from various other sources. Based on its assessment management is reasonably confident that the Company has the ability to raise the required cash flow, which has not been independently assessed by us. Relying on the above, no adjustments have been made in these financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

a. We have sought and except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;

e. The matters described in Basis of qualified opinion paragraph, paragraph of Emphasis of Matter and paragraph ix to statement on the matters specified in paragraphs 3 and 4 of the Order above, in our opinion, may have adverse effect on the functioning of the Company.

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

g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above; and

h. 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 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 to the financial statements.

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

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

Annexure to Auditors' Report (Referred to in paragraph 3 of our report of even date) (Contd...)

Annexure referred to in our report of even date to the members of Jaihind Projects 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 explanations given to us during the course of our audit, we report that:

i. a) The Company has maintained the fixed assets register however the records maintained by the Company in respect of its fixed assets are not considered to be proper in so far as these does not give full particulars of situation of assets, and location of assets.

b) In absence of the working papers of physical verification, methodology adopted by the Company for the verification of the fixed assets could not be ascertained.

ii. a) As explained to us, inventories have been physically verified by the management. However, in absence of working papers of physical verification, we are unable to comment on the adequacy of frequency of such verification/estimation.

b) According to information and explanations provided to us, inventories at different sites have been visually quantified and the value estimated by respective site in charge. However in absence of working papers as mentioned above, we are unable to comment on the correctness of the procedure of physical verification of inventories followed by the management.

c) In absence of working papers for the physical verification of inventories conducted by the management, we are unable to comment on the discrepancies between physical stock and book records, if any and adjustment thereof in the books of accounts.

iii. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the internal control procedures are not adequate and 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 and services. During the course of our audit we have observed some instances of continuing failure to correct weaknesses in internal controls.

v. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

vi We have broadly reviewed the books of account relating to materials, labour and other items of costs maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however not made detailed examinations of the records with a view to determine whether they are accurate or complete.

vii. a) According to information and explanations provided to us and on the basis of examination of records, the Company is not generally regular in deposit of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess (except Cess under section 441A of the Act since the aforesaid section has not yet been made effective by the Central Government) and any other statutory dues applicable to it.

b) According to the information and explanation provided to us, in our opinion, no undisputed amount payable in respect of the aforesaid due were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable except Professional Tax amounting to Rs. 4.97 lacs ESIC Rs. 0.45 lacs, TCS Rs. 0.18 lacs and TDS amounting to Rs. 51.52 lacs.

c) According to the information and explanations given to us, the statutory dues which have not been deposited on account of any dispute are as under:

Name of the statute  Nature of the   Amount in  Period to which
                     dues            Rs. Lacs   it relates

Finance Act 1994     Service Tax      223.58    June 16, 2005 to 
                                                Sep 2006

Finance Act 1994     Service Tax      212.79    Oct 2006 to Sep 2007

Finance Act 1994     Service Tax      177.37    Oct 2007 to March 
                                                2008

Gujarat Commercial 
Tax                  Commercial Tax   327.41    Year 2009-10

Gujarat Commercial 
Tax                  Commercial Tax   416.95    Year 2010-11

Name of the Status Forum where dispute is pending

Supreme Court

CESTAT, Ahmedabad

CESTAT, Ahmedabad

Deputy Commissioner of Commercial Tax (Appeals) Ahmedabad

Deputy Commissioner of Commercial Tax (Appeals), Ahmedabad

d) There has not been an occasion in case of the Company during the year under report to transfer any sums to the investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

viii The Company does not have accumulated losses at the end of the current financial year subject to our qualifications in Independent Auditors' Report. It has incurred cash losses during the year and the immediately preceding financial year.

ix Based on our audit procedures and as per the information and explanations given by the management, the Company had executed Corporate Debt Restructuring agreement with its principal lenders. As per terms of the Corporate Debt Restructuring package, the Company was required to pay during the year under report amounting to Rs. 479.05 lacs and interest of Rs. 754.11 lacs which it has failed to pay. The Company has also defaulted in repayment of loans due to financial institutions of Rs. 2,215.02 lacs as on March 31, 2015 and interest thereon.

x. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company since these guarantees are given for a subsidiary Company promoted by the Company.

xi In our opinion, and according to information and explanations given to us, the Company has not raised any term loans during the year.

xii During the course of our examination of the books and records of the Company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have been informed of any such instance by the Management.

                                    For R. K. DOSHI & COMPANY 

                                        Chartered Accountants

                                            Regn. No. 102745W

                                          Shailesh A. Gathani

30th May 2015                                         Partner

Ahmedabad                                       M. No. 049973