Simplex Infrastructures

1.  We have audited the attached Balance Sheet of Simplex
 Infrastructures Limited as at 31st March, 2009 and the related Profit
 and Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. These financial statements are the responsibility of the
 Companys 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 (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the ‘Order), issued by the Central Government of India in
 terms of sub- section (4A) of Section 227 of the Companies Act, 1956 of
 India (‘the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we report that:
 
 3.1 a) The Company has maintained proper records to show full
 particulars including quantitative details and situation of its fixed
 assets.
 
 b) The fixed assets are physically verified by the
 
 management according to a phased programme designed to cover all the
 items over a period of three years, which in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 3.2 a) The inventory of the Company, other than work- in- progress
 {comprising site development costs etc. as indicated in Note 1(g) on
 Schedule 19} and material in transit has been physically verified by
 the management during the year. In respect of inventory lying with
 third parties, these have mostly been confirmed by them. In our
 opinion, the frequency of verification is reasonable.
 
 b) In our opinion, 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) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of materials at
 sites, materials in transit and stores. As regards work-in-progress, as
 explained by the management, it is not practicable to maintain
 cumulative quantitative records, since it comprises site development
 cost etc. as indicated in Note 1(g) on Schedule 19. The discrepancies
 noticed on physical verification of inventory as compared to book
 records, were not material.
 
 3.3 a) 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 Act.
 
 b) 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 Act.
 
 3.4 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, fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 3.5 a) In our opinion and according to the information and explanations
 given to us, the particulars of contracts or arrangements referred to
 in Section 301 of the Act have been entered in the register required to
 be maintained under that Section.
 
 b) In our opinion and according to the information and explanations
 given to us, there are no transactions made in pursuance of such
 contracts or arrangements and exceeding the value of Rupees Five Lakhs
 in respect of any party during the year, which have been made at prices
 which are not reasonable having regard to the prevailing market prices
 at the relevant time.
 
 3.6 In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Act and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. According to the information and
 explanations given to us, no Order has been passed by the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 Court or any other Tribunal on the Company in respect of the aforesaid
 deposits.
 
 3.7 In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 3.8 The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 3.9 a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 has generally been regular in depositing during the year the 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 as applicable with the appropriate authorities.
 
 b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 Income Tax, Sales Tax, Value Added Tax, Service Tax and Entry Tax as at
 31st March, 2009, which have not been deposited on account of a
 dispute, are as follows -
 
 Name of Statue                         Name of Dues
 
 Andhra Pradesh General            Liability against turnover tax
 Sales Tax Act, 1957
 
 Andhra Pradesh General            Liability against turnover tax
 Sales Tax Act, 1957
 
 Andhra Pradesh                    Liability against inter state
 General Sales Tax Act,1957        purchase
 
 Goa Sales Tax Act, 1964           Disallowance of tax paid on
                                   inter state purchase under
                                   Section 3 (a)
 
 Goa Sales Tax Act, 1964           Disallowance of tax paid on
                                   inter state purchase
 
 Central Sales Tax Act, 1956       Penalty under Section 10A
 
 Orissa Sales Tax Act, 1947        Levy of tax on free issue
                                   materials.
 
 Orissa Sales Tax Act, 1947        Disallowance on machinery
                                   hire charges
 
 Orissa Sales Tax Act, 1947        WCT- Disallowance of labour
                                   component
 
 Uttar Pradesh General             Entry Taxes, etc.
 Sales Tax Act, 1963.
 
 Uttar Pradesh General Sales       Entry Taxes, etc.
 Tax Act, 1963.
 
 Kerala Value Added                Disallowances of consumables,
 Tax Rules,2005                    transportation charges etc.
 
 West Bengal Value Added           Seizure of excavator (machinery)
 Tax Act, 2003                     and penalty imposed by the
                                   Commercial Tax Department
                                   at Barovisha Check Post
 
 West Bengal Value Added           Purchase of goods from
 Tax Act, 2003                     registered parties taxed as
                                   unregistered
 
 Finance Act, 1994-Service Act     Service Tax demand referred to
                                  in Note 6(f) on Schedule 19
 
 Amount      Period to which     Forum where the dispute is pending
 (Rupeesin   the amount relates
 thousand)
 
 406             1996-97      High Court, Hyderabad
 
 286         1997- 98 to      Andhra Pradesh Sales
                 1999-00      Tax Appellate Tribunal
 
 771             2003-04      Andhra Pradesh Sales
                              Tax Tribunal
 
 6,436           2004-05      Assistant Commissioner
                              of Commercial
                              Taxes (Appeal)
 
 85              2002-03      Administrative Tribunal
                              in Goa
 
 886            2002-03 &     Administrative Tribunal
                 2003-04      in Goa
 
 258            1985-86,      Appellate Tribunal,
                1988-89,      Cuttack
                1989-90
  
 584            2001-02       Appellate Tribunal,
                              Cuttack
 
 52             2002-03       Appellate Tribunal,
                              Cuttack
 
 656            2003-04       Joint Commissioner of
                              Trade Tax
 
 732             2004-05      Allahabad High Court
 
 1,160           2005-06      The Deputy Commissioner
                              (Appeals) Commercial Tax.
 
 393             2006-07      Calcutta High Court
 
 1,723           2005-06      Deputy Commissioner of
                              Commercial Taxes (Appeals),
                              South Circle, West Bengal
 
 264,331    1.3.2005 to       High Court at Calcutta
              30.9.2006
 
 Name of statue                       Nature of dues
 
 Finance Act, 1994- Service Tax     Service Tax demand referred to
                                    in Note 6(f) on Schedule 19
 
 Finance Act, 1994- Service Tax     Service Tax demand referred to
                                    in Note 6(f) on Schedule 19
 
 The Income-tax Act, 1961           Disallowance under Section 43B
 
 Amount(Rupees   Period to which    Forum where the dispute is 
 in thousands)   amount relates     pending
 
 
 327,240             1.10.2006     High Court at Calcutta
                  to 30.9.2007
 
 66,943              2004-05,      High Court of Delh
                     2005-06
                   & 2006-07
 
 3,989               1998-99       Commissioner of Income
                                   Tax (Appeal)
 
 3.10 The Company has no accumulated losses as at 31st March, 2009, and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 3.11 According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders during the year.
 
 3.12 The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 3.13 The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 Company.
 
 3.14 In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 3.15 In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantees for loans taken
 by others from banks or financial institutions during the year.
 
 3.16 In our opinion and according to the information and explanations
 given to us, the term loans have been applied (with temporary
 deployment in bank deposits pending final application) for the purpose
 for which they were obtained.
 
 3.17 On the basis of an overall examination of the Balance Sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short term
 basis which have been used for long term investment other than Short
 term loans sanctioned by the Banks Rs.127,825 thousand (of which
 Rs.78,233 thousand repaid during the year) used for the purpose of
 purchase of fixed assets.
 
 3.18 The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 3.19 The Company has not issued during the year any secured debenture.
 
 3.20 The Company has not raised any money by public issue during the
 year.
 
 3.21 During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 4.  Further to our comments in paragraphs 3 above, we report that:
 
 4.1 We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 4.2 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;
 
 4.3 The Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 4.4 In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report, subject to Note 9 on
 Schedule 19 dealt with in paragraph 4.6 below, comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 4.5 On the basis of written representations received from the directors
 as on 31st March, 2009 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2009 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 Section 274 of the Act ;
 
 4.6 In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act, and subject to aforesaid
 Note 9 on Schedule 19 to accounts regarding non-provision of year-end
 exchange fluctuation loss of Rs 113,664 thousand (hedged by derivative
 contracts with a corresponding gain) pertaining to a foreign currency
 loan as required under Accounting Standard 11 “The Effects of Changes
 in Foreign Exchange Rates”, with corresponding incremental effect on
 the years profit and the year-end net worth to that extent, 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 31st March, 2009;
 
 (b) In the case of the Profit and Loss Account, 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.
 
                                                          S.K. Deb
                                                           Partner
                                              Membership No. 13390
 
                                              For and on behalf of
 Place: Kolkata                                   Price Waterhouse
 Date: 30th June, 2009                       Chartered Accountants