CPEC

We have audited the accompanying financial statements of CPEC Ltd,
 which comprise the Balance Sheet as at 31st March, 2014 the Statement
 of Profit and Loss and the Cash Flow Statement for the year then ended,
 and a summary of the significant accounting policies and other
 explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 The Company''s Management is responsible for the preparation of these
 financial statements that give a true and fair view of the financial
 position, financial performance and cash flows of the Company in
 accordance with the Accounting Standards referred to in Section 211(3C)
 of the Companies Act, 1956 and in accordance with the accounting
 principles generally accepted in India. 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.
 
 Auditors'' Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and 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 control relevant to the
 Company''s preparation and fair presentation of the financial statements
 in order to design audit procedures that are appropriate in the
 circumstances, but not for the purpose of expressing an opinion on the
 effectiveness of the Company''s interna control. An audit also includes
 evaluating the appropriateness of the accounting policies used and the
 reasonableness of the accounting estimates made by the Management, as
 well as evaluating the overall presentation of the financial
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, 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, subject to Note to Schedule 2 forming part
 of balance sheet;
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2014;
 
 (b) in the case of the Statement of Profit and Loss, of the loss of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company 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 issued
 by the Central Government in terms of Section 227(4A) of the Act, we
 give in the Annexure a statement on the matters specified in paragraphs
 4 and 5 of the Order.
 
 2. As required by Section 227(3) of the Act, we report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the 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 Balance Sheet, the Statement of Profit and
 Loss, and the Cash Flow Statement comply with the Accounting Standards
 referred to in Section 211(3C) of the Act.
 
 (e) On the basis of the written representations received from the
 directors as on 31st March, 2014 taken on record by the Board of
 Directors, one of the directors Mr. Alim Jamal Shamji is disqualified
 as on 31st March, 2014 from being appointed as a director in terms of
 Section 274(1) (g) of the Act.
 
 (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 ''Report on Other Legal and Regulatory
 Requirements'' section of our report of even date)
 
 (i) (a) The company has freehold Land at Bhachau, Gujrat and furniture
 and fixtures (on rented office premises) as fixed assets and required
 records of the same are properly maintained,
 
 (b) As explained to us, all the fixed assets have been physically
 verified by the management.
 
 (c) The company has not disposed of fixed assets during the year.
 
 (ii) (a) There is no opening and closing inventory hence this clause is
 not applicable.
 
 (iii) (a) As informed to us, the company has granted advances in the
 nature of Loans to an Associate Company and to Subsidiary Companies.
 The maximum amount outstanding is Rs.390.67 lakhs and closing
 outstanding balance is Rs.390.67 lakhs.
 
 (b) There is no stipulation for payment of interest. The other terms
 and Conditions of such loans are in our opinion, prima facie not
 prejudicial to the interest of the company.
 
 (c) The payment of principal amount is on demand.
 
 (d) There is no stipulation of principal repayment. Hence there is no
 overdue amount.
 
 (e) As informed to us, the company has taken Loan from a Director. The
 maximum amount outstanding is Rs. 1.42 lakhs and closing outstanding
 balance is Rs. 1.37 lakhs.
 
 (f) There is no stipulation for payment of interest, payment of
 principal amount is on demand. The other terms and Conditions of such
 loans are in our opinion, prima facie not prejudicial to the interest
 of the company.
 
 (g) There is no stipulation of principal repayment. Hence there is no
 overdue amount.
 
 (iv) In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business. During the course of our audit no major weakness has been
 observed in the internal controls.
 
 (v) There are no contracts or arrangements with persons referred to in
 section 301 of the Companies Act and hence the clause is not
 applicable.
 
 (vi) In our opinion and according to the information and explanation
 given to us, the Company has not accepted any public deposits within
 the meaning of sections 58 and 58AA of the Companies Act, 1956 and the
 rules framed there under.
 
 (vii) In our opinion, the company does not have an adequate internal
 audit system commensurate with size and nature of its business.
 
 (viii) As informed to us, the maintenance of cost records has not been
 prescribed by the Central Government under clause (d) o1 sub-section
 (1) of section 209 of the Act.
 
 (ix) (a) The company is regular in depositing undisputed statutory dues
 including Provident Fund, Employees State Insurance, Income-tax,
 Sales-tax, Custom Duty, Excise Duty, cess and any other statutory dues
 with the appropriate authorities during the year except the following:
 
    Statutory Dues                                         Amount
 
 1. Income Tax (o/s for more than 6 months)
    for A.Y. 11-12                                       33521316
 
 2. Service Tax (o/s for less than 6 months)
    for F.Y. 12-13                                        3054669
 
 (b) According to the information and explanations given to us, there
 are no dues payable on account of disputes with regards to sales tax,
 income tax, custom tax, wealth tax, excise duty, cess.
 
 (x) The company does not have accumulated losses at the end of the
 financial year and it has incurred cash losses during the financial
 year covered by our audit but has not incurred cash loss in the
 preceding financial year.
 
 (xi) The company has not defaulted in repayment of dues to financial
 institutions or bank or debenture holders.
 
 (xii) According to the information and explanations given to us the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The company is not Chit fund or a Nidhi or Mutual benefit fund
 or society. Therefore the provisions of any special statutes are not
 applicable to the company.
 
 (xiv) According to the information and explanations given to us the
 company does not deal or trade in shares, securities, debentures and
 other investments and hence this clause is not applicable.
 
 (xv) The company has given corporate guarantee for loan of Rs. 3830
 lakhs taken by the associate company for solar project, the terms and
 conditions are not prejudicial to the interest of the company.
 
 (xvi) The company has not raised any term loans.
 
 (xvii) In our opinion and overall examination of the Balance Sheet of
 the company, we report that funds raised on Short term basis have not
 been used for long term investment.
 
 (xviii) The company has not made any preferential allotment of shares
 during the year to parties and companies covered in the Register as per
 Section 301 of the Act.
 
 (xix) The company has not issued any debentures.
 
 (xx) The company has not raised any money through a public issue during
 the year.
 
 (xxi) Based on the audit procedures applied and information and
 explanations given to us, we report that no fraud on or by the company
 has been noticed or reported during the course of our audit.
 
 
                                             For D. B. Bhanushali & Co.
                                                  CHARTERED ACCOUNTANTS
                                         (FIRM REGISTRATION NO 118951W)
 
                                                       D. B. Bhanushali
 Place: Mumbai                                                  Partner
 Date : May 14, 2014                             (Membership No. 42844)