1.  We have audited the attached Balance Sheet of Lanco Infratech
 Limited (''the Company'') as at March 31, 2012 and also 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 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) 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.
 
 4.  Attention is invited to Note 38 of financial statements, which
 Explains the restructuring undertaken by the Company during the year.
 The Company''s investment in various subsidiaries and associates have
 Been transferred to wholly owned step down subsidiaries and an
 Associate of wholly owned step down subsidiary aggregating to f
 6,81,550.87 lakhs. Management is confident of receiving the approvals
 From various lenders and customer in near future and has recorded these
 Transfers in these financial statements. In case of any of these
 Approvals are not granted, the management will have to revisit the
 Structure and the consequential impact would then be recorded in these
 Financial statements. Pending the final outcome of lenders and customer
 Approvals, we are unable to comment on the consequential effects of the
 Foregoing should such approval not be received on these financial
 Statements.
 
 5.  Further to our comments in the Annexure referred to above, 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, statement of Profit and Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 Account;
 
 Iv. In our opinion, the Balance Sheet, statement of Profit and Loss and
 Cash Flow Statement dealt with by this report comply with the
 Accounting standards referred to in sub-section (3C) of section 211 of
 The Companies Act, 1956;
 
 V. On the basis of the written representations received from the
 Directors, as on March 31, 2012, and taken on record by the Board of
 Directors, except for Mr. P. Narasimharamulu who has deceased prior to
 Furnishing the representation, we report that none of the other
 Directors is disqualified as on March 31, 2012 from being appointed as
 A director in terms of clause (g) of sub-section (1) of section 274 of
 The Companies Act, 1956;
 
 Vi. Subject to the matters referred to in paragraph 4 above, the
 Consequential effects of which are currently not ascertainable, in our
 Opinion and to the best of our information and according to the
 Explanations given to us, the said accounts 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;
 
 A) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 B) in the case of the statement of Profit and Loss, of the profit for
 The year ended on that date; and
 
 C) in the case of Cash Flow Statement, of the cash flows for the year
 Ended on that date.
 
 Re: Lanco Infratech Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 Particulars, including quantitative details and situation of fixed
 Assets.
 
 (b) All fixed assets were physically verified by the management in the
 Previous year in accordance with a planned programme of verifying them
 Once in three years which, in our opinion, is reasonable having regard
 To the size of the Company and the nature of its assets. No material
 Discrepancies were noticed on such verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) (a) The management has conducted physical verification of
 Inventory at reasonable intervals during the year. In respect of
 Inventory lying with third parties, these have substantially been
 Confirmed by them.
 
 (b) 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) The Company is maintaining proper records of inventory and no
 Material discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanations given to us,
 The Company has not granted any loans, secured or unsecured to
 Companies, firms or other parties covered in the register maintained
 Under section 301 of the Companies Act, 1956. Accordingly, the
 Provisions of clause 4 (iii) (a) to (d) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) are not applicable to the Company and
 Hence not commented upon.
 
 (b) According to the information and explanations given to us, the
 Company has not taken any loans, secured or unsecured from companies,
 Firms or other parties covered in the register maintained under section
 301 of the Companies Act, 1956.  Accordingly, the provisions of clause
 4 (iii) (e) to (g) of the Companies (Auditor''s Report) Order, 2003 (as
 Amended) are not applicable to the Company and hence not commented
 Upon.
 
 (iv) 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, no major weakness has been
 Noticed in the internal control system in respect of these areas.
 During the course of our audit, we have not observed any continuing
 Failure to correct major weakness in internal control system of the
 Company in respect of these areas.
 
 (v) (a) According to the information and explanations provided by the
 Management, 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 into the register maintained under section 301 have been so
 Entered.
 
 (b) In respect of transactions made in pursuance of such contracts or
 Arrangements exceeding value of Rupees five lakhs entered into during
 The financial year, because of the unique and specialised nature of the
 Items involved and absence of any comparable prices, we are unable to
 Comment whether the transactions were made at prevailing market prices
 At the relevant time
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system
 Commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 Maintenance of cost records under section 209(1 )(d) of the Companies
 Act, 1956, and are of the opinion that prima facie, the prescribed
 Accounts and records have been made and maintained.
 
 (ix) (a) The Company is regular in depositing with appropriate
 Authorities undisputed statutory dues including provident fund,
 Investor education and protection fund, employees'' state insurance,
 Income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 Duty, cess and other material statutory dues applicable to it.
 
 (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, income-tax,
 Wealth-tax, service tax, sales- tax, customs duty, excise duty, cess
 And other undisputed statutory dues were outstanding, at the year end,
 For a period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 Income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 Duty and cess on account of any dispute, are as follows:
 
 Name of the 
 Statute         Nature of  Amount     Period to 
                            Rs. Lakhs  which the         Forum where
                                                         Dispute is
                 Dues                  amount relates    pending
 
 Income Tax 
 Act, 1961       Income Tax    294.7   Assessment
                                       Year 2002-03      Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax    222.2   Assessment 
                                       year 2003-04      Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax     20.6   Assessment year
                                       2004-05           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax    221.7   Assessment year
                                       2005-06           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax      1.7   Assessment year 
                                       2006-07           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax    193.2   Assessment year
                                       2007-08           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax    373.6   Assessment year
                                       2009-10           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Income Tax 
 Act, 1961       Income Tax     10.7   Assessment year
                                       2010-11           Commissioner of
                                                         Income Tax
                                                        (Appeals)
 
 Andhra Pradesh 
 General         Sales Tax       8.5   Financial Year
                                       2000-01           High court of
                                                         Andhra
 Sales Tax 
 Act, 1956                                               Pradesh
 
 Andhra Pradesh
 Tax on          Entry Tax       1.8   Financial Year
                                       2007-08           Commercial Tax
                                                         Officer,
 Entry of Goods
 Act, 2001                                               Begumpet
 
 Andhra Pradesh 
 General         Sales Tax       2.7   Financial Year
                                       2001-02           The Sales Tax
                                                         Appellate
 Sales Tax 
 Act, 1956                                               Tribunal, 
                                                         Hyderabad
 
 Andhra Pradesh 
 Value           Sales Tax       1.3   Financial Year
                                       2009-10           The Appellate
                                                         Deputy
 Added Tax 
 Act, 2005                                               Commissioner CT,
                                                         Panjagutta-
                                                         Hyderabad
 
 Tamil Nadu 
 Value Added     Sales Tax      38.3   Financial Year
                                       2007-08           The Appellate
                                                         Deputy
 Tax, 2006       (including                              Commissioner
                                                         CT, Chennai
                 Penalty)
 
 
 The Finance 
 Act, 1994       Service Tax    13.8   April 2005-
                                       March 2008        Customs, 
                                                         Central Excise
                                                         And Service 
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance 
 Act, 1994       Service Tax    15.9   June 2005-
                                       August 2008       Customs,
                                                         Central Excise
                                                         And Service
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance
 Act, 1994       Service Tax 1,292.4   June 2007-March 
                                       2008               Customs, 
                                                         Central Excise
                                                         And Service
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance 
 Act, 1994       Service Tax   385.9   June 2007-July
                                       2008              Customs, 
                                                         Central Excise
                                                         And Service 
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance 
 Act, 1994       Service Tax 1,547.4   April 2005-March
                                       2008              Customs, 
                                                         Central Excise
                                                         And Service
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance 
 Act, 1994       Service Tax    37.8   July 2008-September
                                       2009              Commissioner
                                                         of Central
                                                         Excise (Appeals)
 
 The Finance 
 Act, 1994       Service Tax   657.8   April 2008-June
                                       2009              Customs, 
                                                         Central Excise
                                                         And Service
                                                         Tax Appellate
                                                         Tribunal
 
 The Finance 
 Act, 1994       Service Tax   897.9   July 2009-March 
                                       2010              Commissioner
                                                         of Central
                                                         Excise
 The Finance 
 Act, 1994       Service Tax      65   October 2009-
                                       February          Commissioner
                                                         of Central
                                       2011              Excise
 
 The Finance 
 Act, 1994       Service Tax 6,442.5   April 2010-March
                                       2011              Commissioner 
                                                         of Central
                                                         Excise
 
 (x) The Company has no accumulated losses at the end of the
 Financial year and it has not incurred cash losses in the current and
 Immediately preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 Explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 Institution, bank or debenture holders.
 
 (xii) According to the information and explanations given to us and
 Based on the documents and records produced 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.
 
 (xiii) 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 (Auditor''s Report) Order, 2003 (as amended)
 Are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 Shares, securities, debentures and other investments. Accordingly, the
 Provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from bank or
 Financial institutions, the terms and conditions whereof in our opinion
 Are not prima- facie prejudicial to the interest of the Company.
 
 (xvi) Based on information and explanations given to us by the
 Management, term loans were applied for the purpose for which the loans
 Were obtained.
 
 (xvii) According to the information and explanations given to us and on
 An overall examination of the balance sheet of the Company, we report
 That no funds raised on short-term basis have been used for long-term
 Investment.
 
 (xviii)The Company has not made any preferential allotment of shares to
 Parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 (xix) The Company did not have any outstanding debentures during the
 Year.
 
 (xx) The Company has not raised any money by public issues and
 Accordingly, provisions of clause 4(xx) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) are not applicable to the Company.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 Reporting the true and fair view of the financial statements and as per
 The information and explanations given by the management, we report
 That no fraud on or by the Company has been noticed or reported during
 The course of our audit.
 
 For S. R. Batliboi & Associates       For Brahmayya & Co.
 
 Firm registration number: 101049W     Firm registration number: 000511S
 
 Chartered Accountants                 Chartered Accountants
 
 Per Sanjay Vij                        per N.Sri Krishna
 
 Partner                               Partner
 
 Membership No.: 95169                 Membership No.: 26575
 
 Place: Gurgaon                        Place: Gurgaon
 
 Date: May 29, 2012                    Date: May 29, 2012