The Members of

RAMKY INFRASTRUCTURE LIMITED

We have audited the accompanying Standalone financial statements of RAMKY INFRASTRUCTURE LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information for the year then ended.

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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

We refer to Note 31 of the standalone financial statements with regard to recognition of deferred tax assets on unabsorbed depreciation, business losses and other timing differences, amounting to Rs 396.02 Crore. Based on unexecuted orders on hand, the Management is confident that sufficient future taxable income will be available against which such deferred tax assets will be realized. However, in our opinion, in absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax assets can be realized, such recognition is not consistent with the principles enunciated under Accounting Standard 22, "Accounting for Taxes on Income" (AS 22). Had the aforesaid deferred tax assets not been recognised, profit after tax for the period ended would have been lower by Rs 396.02 Crore.

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 the basis for qualified opinion paragraph above, the 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, 2016, and its Profit and its Cash Flows for the year ended on that date.

Emphasis of Matters

Attention is invited to

a. Note 32 to the standalone financial statements in respect of existence of material uncertainties over the realisability of certain construction work in progress, trade receivables and loans and advances aggregating to Rs 508.49 Crore, which are subject matters of arbitration proceedings/negotiations with the customers and contractors due to foreclosure of contracts and other disputes. The management of the Company, keeping in view the status of negotiations and the outcome of arbitration proceedings and the basis of which steps to recover these amounts are currently in process, is confident of recovering the aforesaid dues. In view of pending billing of project WIP/slow progress/termination of these projects, and lack of other alternate audit evidence to corroborate management's assessment of recoverability of these balances, we are unable to comment on the extent to which these balances are recoverable.

b. Note 33 to the standalone financial statements in respect of recognition of a claim of Rs 225.04 Crore during the year and related trade receivable and other current assets aggregating to Rs 225.04 Crore as at March 31, 2016, on account of cost overrun and additional quantities executed in respect of an EPC contract with its subsidiary concessionaire. The claim of the concessionaire company is assessed by the lenders independent engineer and the concessionaire is in the process of availing additional funding/refinance from the lenders.

c. Note 34 to the standalone financial statements with regard to

insurance claim due to floods on one of the Company's project in Srinagar, Jammu and Kashmir, the company has recognized insurance claim revenue aggregating to Rs 62.94 Crore to the extent measured reliably and accounted/charged off related additional costs incurred towards damage by floods.

d. Note 35(a) to the standalone financial statements in respect of write back of the 'liabilities no longer required' outstanding for a long period aggregating to Rs 164.95 Crore. The management is confident that the liabilities no longer required and no material adjustment will be required.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), as amended, issued by Central Government in terms of section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a. We have sought and except for the matter 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 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 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 matters described in the "Basis for qualified opinion" paragraph, 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. The matters described in the basis for qualified opinion and matter described in para 'a', 'b' &'d' of "emphasis of matters" paragraph 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, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Company's internal financial control over financial reporting.

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 the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements;

ii. Except for the effects of matters described in the basis for qualified opinion paragraph, 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.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company for the year ended March 31, 2016.

For CHATURVEDI & PARTNERS
Chartered Accountants
Firm Registration No.307068E
RAVINDRA NATH CHATURVEDI
Hyderabad Partner
May 30, 2016 Membership No.092087

"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading 'Report on Other Legal & Regulatory Requirement' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:

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

(b) The Fixed Assets were physically verified during the year by the management in accordance with a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. According to the information and explanation given to us, the discrepancies noticed on such verification were not material and have been properly dealt with the books of account.

(c) According to the information and explanation given to us, the title deeds of the immovable properties are held in the name of the company.

II According to the information and explanation given to us, the management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed on verification between physical stocks and book records were not material and have been properly dealt with in the books of account.

III The Company has granted unsecured loans to 7 companies (out of which loans granted to 2 companies are interest free) covered in the register maintained under section 189 of the Act, in respect of such loans;

(a) In our opinion, the terms and conditions of the loans granted by the company are not prejudicial to the company's interest except for in the case of interest free unsecured loan granted to 2 parties, aggregating to Rs 76.25 Crore as at March 31, 2016, having regard to the cost of funds to the company, are prejudicial to the interest of the company.

(b) The receipt of principal amount and interest, wherever stipulated is regular other than an amount disclosed in(c) below. Further, in case of interest free loan granted to 2 parties where the schedule of repayment of the principal and payment of interest has not been stipulated, hence, we are unable to comment as to whether repayments are regular.

(c) In case of loans carrying interest, there is an overdue interest amounting to Rs 6.06 Crore for more than 90 days. As per the information and explanation given to us by the management, the company has made reasonable steps to recover overdue interest portion. Further, in case of interest free unsecured loans granted to 2 parties, as the schedule of repayment has not been stipulated, we are unable to comment whether any amount is overdue and whether recovery of the principal is required.

IV According to information and explanation given to us and based on the legal opinion obtained by the company that the company being a company is engaged in the business of providing infrastructure facilities in terms of Section 186, the company has comply with the provisions of section 185 and 186 of the Companies Act, 2013, in respect of grant of loans, making investments and providing guarantees and security as applicable.

V According to the information and explanation given to us, the Company has not accepted any deposits within the meaning of Section 73 to 76 of the act, and the rules framed there under to the extent notified.

VI We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central government under section 148(1) of the companies act, 2013 and are of the opinion that prime facie prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of the records with a view to determining whether they are accurate or complete.

VII (a) According to information and explanations given to us and records of the Company examined by us, amounts deducted/ accrued in the books of accounts in respect of Undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Value added Tax, Cess and any other material statutory dues as applicable have been actually/regularly deposited with the appropriate authorities and there have been delays in number of cases. As explained to us, the company did not have any dues on the account of excise duty and customs duty. Further, no undisputed amounts payable in respect of these statutory dues were outstanding as at March 31, 2016 for a period of more than six months from the date they become payable except for the sales tax, value added tax and service tax as set out in Appendix-I.

(b) According to the information and explanations given to us and records of the Company examined by us, Particulars of dues outstanding in respect of sales tax, service tax and value added tax which have not been deposited on account of any dispute are given in Appendix-II to this report.

VIII In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of certain dues to financial institutions and banks. The details of such delay are set out in Appendix III to the Reports. Further, as stated in note 41 of the financial statements, the lenders banks, consequent to approval of Debt restricting under Joint lender forum, have restructured the repayment of principal and interest thereon as mentioned in Appendix III and waived the default or penal interest charged by them up to the date of restructuring. There are no loans or borrowings payable to the Government and debenture holders.

IX According to the information and explanations given to us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments). Term loans have been applied by the Company during the year for the purposes for which they were obtained.

X According to the information and explanations given to us, no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

XI According to the information and explanations given to us, no managerial remuneration has been paid or provided by the Company during the year. Accordingly, the provisions of Para 3 (xi) of the Order are not applicable to the Company and hence not commented upon.

XII In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, the provisions of Para 3 (xii) of the Order are not applicable to the Company.

XIII In our opinion and according to the information and explanation given to us, all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

XIV According to the information and explanations given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.

XV According to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of Para 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

XVI In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.

For CHATURVEDI & PARTNERS
Chartered Accountants
Firm Registration No.307068E
RAVINDRA NATH CHATURVEDI
Hyderabad Partner
May 30, 2016 Membership No.092087

Appendix I as referred to in Para vii(a) of Annexure A to the Independent Auditors’ report

Period to which amount relates (Rs in crore)
Name of statue Nature of Due Upto 2014-15 April'15 May'15 June'15 July'15 August'15
The Jammu and Kashmir Value Added Tax (VAT) 16.12 - - 0.29 - 3.67
Value added Tax Act, 2005 Due date 30th April - - 31st July - 31st Oct
Value added tax- Jharkhand WCT Deducted at source 2.23 - - - - -
Due date 15th April - - - - -
Value added tax-Bihar WCT Deducted at source 1.36 - 0.005 0.005 0.104 0.154
Due date 15th April - 15th June 15th July 15th Aug 15th Sept
Value added tax-Delhi WCT Deducted at source 0.07 - - - - 0.0005
Due date 20th April - - - - 20th Sept
Value added tax - WCT Deducted at source 0.21 - 0.04
Uttar Pradesh Due date 20th April - 20th June - - -
Value added tax - Work contract Tax
West Bengal Deducted at source 0.37 - - - 0.07 0.03
Due date 30th April - - - 31stAug 30thSept

Appendix II as referred to in Para vii (b) of Annexure A to the Independent Auditors' report

Name of the statue Nature of the dues Amount (Rs in crore) Period to which it pertain Forum where dispute pending
Andhra Pradesh General sales Tax Act, 1957 Tax 0.91
(0.45)* 2002-03 The Deputy Commissioner, Panjagutta
Andhra Pradesh VAT Act,2005 Tax 6.30
(1.29)* 2005-09 High Court of Andhra Pradesh
Andhra Pradesh VAT Act,2005 Tax 5.69
(6.17)* 2005 -07 Sales Tax Appellete Tribunal, Hyderabad
Andhra Pradesh VAT Act,2005 Tax and Penalty 1.19
(0.43)* 2007-09 Sales Tax Appellete Tribunal, Hyderabad
Andhra Pradesh VAT Act,2005 Tax and Penalty 4.32
(0.69)* 2009-10 ADC(Appeals), Hyderabad
Andhra Pradesh VAT Act,2005 Tax 6.31 2010-11 High Court, Andhra Pradesh
Bihar VAT Act, 2005 Penalty 4.46 2010-12 DCCT(Appeal), Patna
Bihar VAT Act, 2005 Tax 0.15 2010-12 DCCT, Patna
JVAT Act Tax and Penalty 3.52 2012-14 DCCT, Jamshedpur
Karnataka Value Added Tax, 2003 Tax 0.88
(0.88)* 2005-06 Joint Commissioner of CT- Appeal
Madhya Pradesh Value Added Tax, 2002 Tax 10.78
(1.70)* 2010-14 Appellate Tribunal
Maharashtra Value Added Tax Tax 26.44
(0.15)* 2008-12 Appellate DY Commissioner
The Punjab Value Added Tax, 2005 Tax 0.35 2006-07 VAT Tribunal, Punjab, Chandigarh
The Punjab Value Added Tax, 2005 Tax 0.34 2008-09 AETC (Appeal)
West Bengal Value Added Tax Tax 26.16 (0.04)* 2005-13 The Additional Commissioner Commercial taxes, Kolkata
West Bengal Value Added Tax Tax 8.52
(0.10)* 2010-13 DCCT, Bureau of Investigation, Kolkata
West Bengal Value Added Tax Tax 1.05 2013-14 Joint Commissioner Appeals
Service tax
Finance Act, 1994 Tax 0.19 1-02-2010 to 31-03-2011 Additional Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad
Finance Act, 1994 Tax 0.52 2011-12 Additional Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Tamilnadu
Finance Act, 1994 Tax 0.19 1-10-2011 to 31-03-2012 Additional Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Tamilnadu
Finance Act, 1994 Tax 0.20 Upto 31-3-2008 Asst. Commissioner (Audit), Service Tax Cell, Visakhapatnam
Finance Act, 1994 Tax 3.05 2004-05 to 2006-07 Central Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore
Finance Act, 1994 Tax 44.23 2004-05 to Central Excise & Service Tax Appellate
(0.23)* 2007-08 Tribunal (CESTAT), Bangalore
Finance Act, 1994 Tax 0.98 1-06-2007 to 31-03-2009 Central Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore
Finance Act, 1994 Tax 15.06 (0.28)* 1-04-2004 to 30-09-2008 Central Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata
Finance Act, 1994 Tax 18.38 1-06-2007 to 31-03-2012 CESTAT, New Delhi
Finance Act, 1994 Tax 7.46 2004-05 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Bangalore
Finance Act, 1994 Tax 1.79 2005-07 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Orissa
Finance Act, 1994 Tax 0.43 01-02-2008 to 31-03-2010 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad
Finance Act, 1994 Tax 0.88 01-02-2007 to 31-07-2009 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad
Finance Act, 1994 Tax 2.81 01-07-2005 to 30-06-2010 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad
Finance Act, 1994 Tax 1.39 01-04-2005 to 01-06-2009 Commissioner of Customs, Central Excise & Service Tax (CCCE&S), Hyderabad
Finance Act, 1994 Tax 20.08 01-04-2007 to