ARSS Auditors Report


We have audited the accompanying standalone financial statements of
ARSS Infrastructure Projects Limited (''the Company''), which comprise
the balance sheet as at 31st March 2015, the statement of profit and
loss and the cash flow statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone 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 standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating 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 standalone
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 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 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.

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

Basis for Qualified Opinion

1. In absence of relevant records, Contract-wise surplus/loss has
neither been ascertained nor recognized in compliance with the
requirements of para 34 and 35 of AS-7 "Construction Contracts" issued
by the Institute of Chartered Accountants of India.

2. Interest for the year amounting to Rs. 31794 lakhs on inter
corporate deposits received has not been charged to the Profit & Loss
account resulting in overstatement of profit to that extent.

3. In the absence of accounts of ARSS Balajee JV and ARSS-MVPL JV,
discrepancies, if any, between the said accounts with that of the
Company is not ascertainable.

4. No provision has been made against performance bank guarantee
invoked amounting to Rs. 82.83 Crores against the Company and the same
is disputed by Company.

Qualified 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 sub para 2 and 4 and for possible effect of the matter
described in sub para 1 and 3 in the Basis for Qualified Opinion
paragraph above, 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 affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date

Report on Other Legal and Regulatory Requirements

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

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

(a) we have sought and, except for the matter described in
sub-paragraph 1 and 3 of Basis of Qualified Opinion above, obtained all
the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit of the aforesaid
standalone financial statements.

(b) in our opinion, except for the effects of the matter described in
sub para 2 and 4 and for possible effect of the matter described in sub
para 1 and 3 in the Basis for Qualified Opinion paragraph above, 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, except for the effects of the matter described in
sub para 2 and 4 and for possible effect of the matter described in sub
para 1 and 3 in the Basis for Qualified Opinion paragraph above, the
aforesaid standalone 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 31st March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and

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

(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 No. 29,
31,35, and 37 to the financial statements;

ii. the Company did not have any Long term contract including
derivatives contract as such the question of commenting on any material
foreseeable losses thereon does not arise.

iii. There has been 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 delay in transferring such sums
does not arise.

Annexure to the Independent Auditors'' Report

The Annexure referred to in our Independent Auditors'' Report to the
members of the Company on the standalone financial statements for the
year ended 31st March 2015, we report that:

(i) FIXED ASSETS

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

b. The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In accordance with this programme, certain
fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.

(ii) INVENTORIES

a. As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, having regard to the
nature and location of stocks, the frequency of the physical
verification is reasonable.

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 are reasonable and adequate in relation to
the size of the Company and the nature of its business.

c. In our opinion, the Company is maintaining proper records of
inventory and the discrepancies noticed on physical verification of the
same were not material in relation to the operations of the Company and
the same have been properly dealt with in the books of account;

(iii) LOAN GIVEN

a. The Company has granted loans amounting to Rs. 9.73 Lakhs to one
bodies corporate covered in the register maintained under Section 189
of the Companies Act, 2013 (''the Act'').

b. In the case of the loans granted to the bodies corporate listed in
the register maintained under section 189 of the Act, the borrowers
have been regular in the payment of the interest as stipulated. The
terms of arrangements do not stipulate any repayment schedule and the
loans are repayable on demand. Accordingly, paragraph 4(iii)(c) of the
Order is not applicable to the Company in respect of repayment of the
principal amount.

c. There are no overdue amounts of more than rupees one lakh in
respect of the loans granted to the bodies corporate listed in the
register maintained under Section 189 of the Act.

(iv) INTERNAL CONTROL

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 with regard to
purchase of inventories and fixed assets and sale of goods and
services. We have not observed any major weakness in the internal
control system during the course of the audit.

(v) DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public, hence the
compliance of directives issued by Reserve Bank of India and the
provisions of Section 73 to 76 of the Companies Act 2013 and rules
framed thereunder are not applicable.

(vi) COST ACCOUNTING RECORDS

We have broadly reviewed the books of accounts maintained by the
Company pursuant to the Companies (Cost records and audit ) Rules 2014
and as prescribed by the Central Government under Section 148(1) of the
Act and are of the opinion that prima-facie, the prescribed accounts
and cost records have been made and maintained by the Company. We have
not however made a detailed examination of the cost records with a view
to determining whether they are accurate or complete.

(vii) STATUTORY DUES

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, wealth
tax, duty of excise, service tax, duty of customs, employees'' state
insurance, value added tax, cess and other material statutory dues have
been regularly deposited with few delay in some cases during the year
the Company with the appropriate authorities.

b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income tax,
sales tax, wealth tax, service tax, duty of excise, duty of customs,
value added tax, cess and other material statutory dues were in arrears
as at 31st March 2015 for a period of more than six months from the
date they became payable except TDS of Rs. 6,01,31,813/- and Entry Tax
of Rs.1,16,09,250/-

c. According to the information and explanations given to us, there are
no material dues of wealth tax, duty of customs and cess which have not
been deposited with the appropriate authorities on account of any
dispute. However, according to information and explanations given to
us, the following dues of income tax, sales tax, service tax and value
added tax have not been deposited by the Company on account of
disputes:


Name of the statute Nature of dues Amount (in Lakhs.)

Orissa Sales Tax Act Sales Tax 117.19

Orissa Entry Tax Act Entry Tax 34.44

Central Sales Tax Act Sales Tax 791.10

Income Tax Act Income Tax 5469.84

Income Tax Act TDS 13.29


Name of the statute Forum where dispute is pending

Orissa Sales Tax Act Commissioner of Commercial Tax

Orissa Entry Tax Act Commissioner of Commercial Tax

Central Sales Tax Act Commissioner of Commercial Tax

Income Tax Act ITAT (Cuttack)

Income Tax Act CIT (A)


d. According to the information and explanations given to us there are
no amounts which were required to be transferred to the investor
education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules there
under.

(viii) IN RESPECT OF LOSSES

The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.

(ix) REPAYMENT OF DUES

Based on our Audit procedures and according to information and
explanation given to us, the Company has paid dues to banks with
certain delay. The Company have overdue outstanding dues to financial
institutions, banks or debenture holders as at 31st March 2015
amounting to Rs. 209.69 Crores.

(x) GUARANTEES GIVEN

In our opinion and according to the information and the explanations
given to us, the Company has given guarantee for loans taken by others
from banks or financial institutions amounting to Rs. 89.80 Crores, the
terms and conditions whereof are not prejudicial to the interest of the
Company.

(xi) END USE OF BORROWINGS

In our opinion and according to the information and explanations given
to us, the term loans have been applied for the purpose for which they
were obtained.

(xii) FRAUDS

Based on the audit procedures performed for the purpose of reporting
the true and fair view of financial statement and as per the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the course of our
audit.

For Ajay B Garg
Chartered Accountant

A Garg
Proprietor
Mem No 32538

Place : Bhubaneswar
Dated : 12th May, 2015



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