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Auditor Report of Hubtown Ltd.

Mar 31, 2016

The Members of Hubtown Limited Report on the Financial Statements

We have audited the accompanying standalone financial statements of HUBTOWN LIMITED ("the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, 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 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 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 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 of 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 and the Rules made there under including the Accounting Standards and matters which are required to be included in the audit report. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 controls 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 audit opinion on the financial statements. 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, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of matter

Attention is invited to:

(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgment of the management, which have been relied upon by us, these being technical matters.

(b) Note 4 (footnote b) in the financial statements with regard to non-creation of investments to the extent of 15% of the value of the redeemable debentures, which is required to be created and earmarked in the manner prescribed under Rule 18 (7) (c) of the Companies (Share Capital and Debentures) Rules, 2014 notified by the Ministry of Corporate Affairs.

(c) Note 17 (footnote b) of the financial statements regarding the status of the projects and the opinion framed by the Company''s management regarding realizable value of the costs incurred, being a technical matter, relied upon by us.

(d) Note 32 (i) (B), regarding guarantees issued and securities provided aggregating Rs. 90099.69 lakhs by the Company to banks and financial institutions on behalf of various entities, which are significant in relation to the profits for the year and the net worth of the Company. In the opinion of the Management, these are not expected to result into any financial liability to the Company.

(e) Note 32 (footnote b) of the financial statements with regard to reliance placed by the auditors on certification received from the management with regard to the disclosure of contingent liabilities given by the Company.

(f) Note 39 of the financial statements with regard to balances that are subject to confirmations, reconciliation and adjustments, if any.

(g) Note 14 of the financial statements with regard to amounts deposited with the Hon''ble Sessions Court, Mumbai as deposits on account of an ongoing case in connection with a commercial transaction with an erstwhile associate company. In connection with the above, a bank account of the Company has been attached by the Maharashtra State CID. Considering the facts of the matter and its pendency, we are unable to express any opinion on the same as the matter is sub-judice.

(h) Note 27 (footnote c) of the financial statements with regard to corporate social responsibility (CSR) expense, which is subject to cheque realization by the recipient.

(i) The Company has not charged interest on advances given to various group entities developing real estate projects, in which the Company has a business interest.

Our opinion is not qualified in respect of the above matters.

other Matters

Attention is invited to:

(a) The Statement of Profit and Loss of the Company which includes share of loss (net) from investments in partnership firms / joint ventures aggregating Rs. 4.75 lakhs are based on the financial statements of the joint ventures / firms as audited by other auditors whose reports have been furnished to us, which have been relied upon by us. Further, the Statement of Profit and Loss of the Company includes share of loss from investments in partnership firms / joint ventures aggregating Rs. 720.93 lakhs are based on the financial statements of the joint ventures / firms as prepared by the management and presented to us on which we have relied.

(b) Note12 (footnote e) regarding the Company''s investments in certain subsidiaries, jointly controlled entities and associates as at 31st March, 2016 which have incurred losses and have negative net worth as at March 31, 2016.

report on other legal and regulatory requirements

I. As required by the provisions of ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the "Order”), 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 give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order;

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

(a) We have sought and 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 aforesaid 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, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2016 from being appointed as a Director in terms of Section 164 (2) of the Act.

(f) 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.

(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 knowledge and belief and according to the information and explanations given to us :

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and protection fund by the company during the year ended march 31, 2016.

ANNEXURE “A” REFERRED TO IN OUR REPORT TO THE MEMBERS OF HUBTOWN LIMITED ON THE STANDALONE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 ST MARCH, 2016;

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -

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

(b) The fixed assets have been physically verified by the Management in a phased manner, 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 nature of its assets. Pursuant to the program, 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 fixed assets have been noticed;

(c) The title deeds of immovable properties are held in the name of the Company;

(ii) The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts;

(iii) The Company has granted unsecured loan to one company covered under the register maintained under Section 189 of the Act;

(a) In respect of the aforesaid loan, as per the terms and conditions the same is interest free and repayable on demand;

(b) The terms and conditions of the loan are prima facie, not prejudicial to the interest of the Company, and

(c) As the loan is repayable on demand, the question of overdue amount does not arise;

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it;

(v) The Company has not accepted any deposits during the year from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified;

(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148 (1) of the Act. We have broadly reviewed the cost records maintained by the Company in respect of projects and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete;

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except

for dues in respect of Income Tax, Provident Fund, Profession Tax, Tax Deducted at Source, Value Added Tax and Service Tax, the Company is generally regular in depositing undisputed statutory dues, including, Employees'' State Insurance, Wealth Tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities. The extent of arrears of statutory dues outstanding as at the Balance Sheet date, for a period exceeding six months from the date they became payable are Rs. 2382.12 lakhs relating to Income Tax Deducted at Source, Rs. 0.07 lakhs relating to Provident Fund, Rs. 0.06 lakhs relating to Profession Tax, Rs. 697.58 lakhs relating to Value Added Tax and Rs. 330.02 lakhs relating to Service Tax;

(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, Value Added Tax and Cess as at the Balance Sheet date which have not been deposited on account of a dispute, are as follows:

Statute and nature of dues

Financial

year

Amount (Rs. in lakhs)

Forum where dispute is pending

Income Tax Act, 1961

Income Tax

2003-04

17.48

Mumbai High Court

Income Tax

2004-05

21.31

Mumbai High Court

Income Tax

2005-06

20.92

Mumbai High Court

Income Tax

2009-10

6.46

Income Tax Appellate Tribunal, Mumbai

Income Tax

2010-11

431.4

Income Tax Appellate Tribunal, Mumbai

Income Tax

2011-12

29.64

Commissioner of Income Tax (Appeals), Mumbai

Income Tax

2012-13

2235.04

Commissioner of Income Tax (Appeals), Mumbai

Statute and nature of dues

Financial

year

Amount (Rs. in lakhs)

Forum where dispute is pending

Maharashtra Value Added Tax Act, 2002

MVAT

2006-07

15.49

Joint Commissioner of Sales Tax (Appeals) - 3

MVAT

2007-08

0.26

Joint Commissioner of Sales Tax (Appeals) - 3

MVAT

2008-09

92.94

Deputy Commissioner of Sales Tax (Appeals) - 6

MVAT

2009-10

8.64

Joint Commissioner of Sales Tax (Appeals) - 3

MVAT

2010-11

5.31

Joint Commissioner of Sales Tax (Appeals) - 3

MVAT

2011-12

4.53

Joint Commissioner of Sales Tax (Appeals) - 3

(viii) On the basis of the records examined by us and the information and explanations given to us, the Company has delayed in repayment of dues to banks, financial institution and debentures holders. Attention is invited to footnote "f” to Note 5 with regards to banks, footnote "g” to Note 8 with regards to financial institution and footnote "c” to Note 10 with regards to debentures, for the amounts and period of delays in payment of principle and interest thereon;

(ix) In our opinion, and according to the information and explanations given to us, the term loans have been applied on an overall basis for the purposes for which they were obtained;

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management. Attention is however invited to Note 14 to accounts in connection with a commercial transaction with an erstwhile associate company;

(xi) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013;

(xii) As the Company is not a nidhi company, the provisions of clause 3 (xii) of the Order are not applicable to the Company;

(xiii) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transaction have been disclosed in the financial statements as required under Accounting Standard AS 18 - Related Party Disclosures specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company;

(xv) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company;

(xvi) The Company is not required to be registered under Section 45IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3(xvi) of the Order are not applicable to the Company.

For Dalal Doshi & Associates

Firm Registration Number: 121773W

Chartered Accountants

Dinesh Doshi

Partner

Membership No.: F-9464

Place : Mumbai

Date : 22nd June, 2016


Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying standalone financial statements of HUBTOWN LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, 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 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 of these financial statements to 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 of 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 there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone 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 control 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 standalone financial statements.

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

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, 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.

emphasis of matter

Attention is invited to:

(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgment of the management, which have been relied upon by us, these being technical matters.

(b) Note 4 (footnote c) in the financial statements with regard to non-creation of investments to the extent of 15% of the value of the redeemable debentures, which is required to be created and earmarked in the manner prescribed under Rule 18(7) (c) of the Companies (Share Capital and Debentures) Rules, 2014 notified by the Ministry of Corporate Affairs.

(c) Note 17 (footnote) of the financial statements regarding the status of the projects and the opinion framed by the Company's management regarding realizable value of the costs incurred, being a technical matter, relied upon by us.

(d) Note 20 (footnote a) in the financial statements with regard reversal of revenue from sale of properties / FSI in earlier years / periods.

(e) Note 32(B), regarding guarantees issued and securities provided aggregating Rs. 47,280.82 lacs by the Company to banks and financial institutions on behalf of various entities, which are significant in relation to the profts for the year and the net worth of the Company. In the opinion of the Management, these are not expected to result into any financial liability to the Company.

(f) Note 32 (footnote) of the financial statements with regard to reliance placed by the auditors on certification received from the management with regard to the disclosure of contingent liabilities given by the Company.

(g) Note 39 of the financial statements with regards to balances that are subject to confirmations, reconciliation and adjustments if any.

(h) The Company has not charged interest on advances given to various group entities developing real estate projects, in which the Company has a business interest.

Our opinion is not qualified in respect of the above matters.

other matters

Attention is invited to:

(a) The Statement of Profit and Loss of the Company which includes share of loss (net) from investments in partnership firms / joint ventures aggregating Rs. 20.02 lacs are based on the financial statements of the joint ventures / firms as audited by other auditors whose reports have been furnished to us, which have been relied upon by us. Further, the Statement of Profit and Loss of the Company which includes share of loss from investments in partnership firms / joint ventures aggregating Rs. 349 lacs are based on the financial statements of the joint ventures / firms as prepared by management and presented to us on which we have relied upon.

(b) Note 12 (footnote c) regarding the Company's investments in certain subsidiaries, jointly controlled entities and associates as at 31st March, 2015 which have incurred losses and have negative net worth as at March 31, 2015.

report on other legal and regulatory requirements

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

II. As required by Section143 (3) of the Act, we report that:

(a) We have sought and 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 aforesaid 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 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) 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 knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position in its financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2015.

ANNEXURE 1 REFERRED TO IN OUR REPORT TO THE MEMBERS OF HUBTOWN LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2015 WE REPORT THAT;

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -

(i) a) The Company has maintained proper records showing full particulars of the quantitative details and situation of its fixed assets; and

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 nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification;

(ii) a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures for 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; and

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material;

(iii) The Company has granted unsecured loan to one Company covered under the register maintained under Section 189 of the Act;

(a) The above loan is interest free and repayable on demand; and

(b) As the loan is repayable on demand, the question of overdue amount does not arise;

(iv) In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for sale of goods and services. Further, on 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;

(v) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, 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;

(vi) We have broadly reviewed the books of account maintained by the Company in respect of projects where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete;

(vii) a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of Income Tax, Tax Deducted at Source, Value Added Tax and Service Tax, the Company is generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities. The extent of arrears of statutory dues outstanding as at Balance Sheet date, for a period exceeding six months from the date they became payable are Rs. 153.01 lacs relating to Income Tax, Rs. 2,064.90 lacs relating to Income Tax Deducted at Source, Rs. 522.34 relating to Value Added Tax and Rs. 63.34 relating to Service Tax;

b. According to the information and explanations given to us and the records of the Company examined by us, the particular of dues of Income Tax, Value Added Tax and Cess as at Balance Sheet date which have not been deposited on account of a dispute, are as follows:

Statute and nature of dues Financial amount Forum where dispute is pending year (Rs. in lacs)

income tax act, 1961:

Income Tax 2003-04 17.48 Hon'ble Bombay High Court

Income Tax 2004-05 21.31 Hon'ble Bombay High Court

Income Tax 2005-06 20.92 Hon'ble Bombay High Court

Income Tax 2009-10 6.46 Hon'ble Bombay Income Tax Appellate Tribunal

Income Tax 2010-11 431.40 Hon'ble Bombay Income Tax Appellate Tribunal

Income Tax 2011-12 29.64 Learned Commissioner of Income Tax (Appeals)

Statute and nature of dues Financial amount Forum where dispute is pending year (Rs. in lacs)

maharashtra Value added tax act, 2002:

Value Added Tax 2006-07 15.49 Joint Commissioner of Sales Tax Appeal

Value Added Tax 2007-08 0.26 Joint Commissioner of Sales Tax Appeal

Value Added Tax 2008-09 92.94 Joint Commissioner of Sales Tax Appeal

Value Added Tax 2009-10 8.66 Joint Commissioner of Sales Tax Appeal

Value Added Tax 2010-11 5.31 Joint Commissioner of Sales Tax Appeal

Value Added Tax 2011-12 4.53 Joint Commissioner of Sales Tax Appeal

Note: Appeals pending at admission stage with appellate bodies are not considered in the above list.

c. The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 2013 and the Rules made there under;

(viii) 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;

(ix) On the basis of the records examined by us and the information and explanations given to us, the Company has delayed in repayment of dues to banks and a financial institution. Attention is invited to Footnote "f" to Note 5 with regards to banks and the financial institution for the amounts and period of delay in payment of principal and interest in case of banks and interest in case of the financial institution;

(x) In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others in which Company has business interest from Banks or financial institutions during the year, are not prejudicial to the interest of the Company;

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied, on an overall basis, for the purposes for which they were obtained; and

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have been informed of any such case by the Management.



For dalal doshi & associates

Firm Registration Number: 121773W

Chartered Accountants



Dinesh Doshi

Partner

Membership No.: F-9464

Mumbai, May 30, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Hubtown Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and 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 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 notifed under the Companies Act, 1956 ("the Act") read with the General Circular No. 15/2013 dated 13th September, 2013 of the Ministry of Corporate Afairs in respect of Section 133 of the Companies Act, 2013. 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 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 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 efectiveness of the Company''s internal 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 sufcient 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 accompanying 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:

(a) in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the Profit 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.

emphasis of matter

Attention is invited to:

(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgement of the management, which have been relied upon by us, these being technical matters.

(b) Note 4 (footnote d) in the financial statements with regard to the dividend recommended by the Board of Directors, wherein the concurrence of the secured debenture holders is required to be obtained in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and the Debenture Trust Deeds.

(c) Note 4 (footnote e) in the financial statements with regard to non-creation of investments to the extent of 15% of the value of the redeemable debentures, which are required to be created and earmarked in accordance with the requirements of the General Circular No. 4/2013 dated 11th February 2013 issued by the Ministry of Corporate Afairs.

(d) Note 5 (footnote k) of the financial statements with regards to non-provision of interest and allied costs or accounting for liabilities on funds received from the debentureholders. We are informed that the management is in the process of negotiating with them and the impact, if any, on the financial statements of the Company after the conclusion of the negotiations is not expected to be material.

(e) Note 13 (footnote c) in the financial statements with regard to investment in certain debentures.

(f) Note 18 (footnote) of the financial statements regarding the status of the projects and the opinion framed by the Company''s management regarding realizable value of the costs incurred, being a technical matter, relied upon by us.

(g) Note 33(B) regarding guarantees issued and securities provided aggregating Rs. 64,273.76 lacs by the Company to banks and financial institutions on behalf of various entities, which are significant in relation to the Profits for the year and the net worth of the Company. In the opinion of the management, these are not expected to result into any financial liability to the Company.

(h) Note. 33 (footnote) of the financial statements with regard to reliance placed by the auditors on certification received from the management with regard to the disclosure of contingent liabilities given by the Company.

Our opinion is not qualified in respect of the above matters.

Other Matters

Attention is invited to:

(a) the Statement of Profit and Loss of the Company which includes share of loss (net) from investments in partnership firms / joint ventures aggregating Rs. 818.51 lacs and investments in these firms aggregating Rs. 31,589.54 lacs [Refer Note 13 (G), and ''Current account balance'' in Note 17 and Note 11] are based on the financial statements of the firms as audited by other auditors whose reports have been furnished to us, which have been relied upon by us. Further, the Statement of Profit and Loss of the Company includes share of loss (net) from investments in joint ventures aggregating Rs. 29.03 lacs and investments in these firms aggregating Rs. 802.39 lacs [Refer Note 13 (G), and ''Current account balance'' in Note 17 and Note 11] are based on the financial statements of the firms as prepared by the management and presented to us on which we have relied.

(b) Note 13 (footnote d) regarding the Company''s investments aggregating Rs. 860.20 lacs, loans and advances aggregating Rs. 104,981.29 lacs in certain subsidiaries, jointly controlled entities and associates which have incurred losses and also have negative net worth as at the year end. As explained in the said Note,the investments in these entities are considered strategic and long term in nature, and the underlying projects in these entities are at an early stage of real estate development and in the opinion of the management, have current market values of certain properties significantly in excess of carrying values and are expected to achieve adequate Profitability on substantial completion of their projects.

report on other legal and regulatory requirements

1. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'' (hereinafter referred to as ''the Order''), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 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 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 dealt with by this Report comply with the Accounting Standards notifed under the Companies Act, 1956 ("the Act") read with the General Circular No. 15/2013 dated 13th September, 2013 of the Ministry of Corporate Afairs in respect of Section 133 of the Companies Act, 2013; and

(e) on the basis of the written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

(b) The fixed assets are physically verifed 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. According to the information and explanations given to us, no material discrepancies were noticed on such verifcation;

(c) In our opinion and according to the information and explanations given to us, a substantial part of the fixed assets has not been disposed of by the Company, during the year;

ii. (a) The inventory has been physically verifed by the management during the year. In our opinion, the frequency of verifcation is reasonable;

(b) In our opinion, the procedures of physical verifcation 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 inventory. The discrepancies noticed on physical verifcation of inventory as compared to book records were not material;

iii. The Company has not granted/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;

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company;

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the register maintained under Section 301 have been so entered;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year are mainly for reimbursement of actual expenses and hence the question of comparable market price does not arise;

vi. 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 applicable provisions of the Companies Act, 1956 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 against the Company in respect of the aforesaid deposits;

vii. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business;

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been maintained;

ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of undisputed sales tax, income tax deducted at source, works contract tax and service tax, the Company is generally regular in depositing undisputed statutory dues including wealth tax, provident fund, investor education and protection fund, employees'' state insurance, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. At the year end, income tax deducted at source of Rs.12,06,07,661, Maharashtra VAT and works contract tax of Rs.1,52,12743 and service tax of Rs.1,93,81,921 remained outstanding for a period exceeding six months;

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax, customs duty, excise duty and cess which have not been deposited on account of any dispute, other than the following;

Statute and nature of dues Financial Amount not Forum where dispute is pending Year Deposited Rs. in lacs

Income Tax Act 1961:

Income Tax 2010-2011 431.40 Commissioner of Income Tax (Appeals) (Preferred by the Company)

Income Tax 2009-2010 6.46 Income Tax Appellate Tribunal (Preferred by income tax Authorities)

Income Tax 2003-2004 17.48 High Court (Preferred by income tax Authorities)

Income Tax 2004-2005 21.30 High Court (Preferred by income tax Authorities)

Income Tax 2005-2006 20.92 High Court (Preferred by income tax Authorities)

Maharashtra Value Added Tax 2008-2009 92.94 Deputy Commissioner of Sales tax (Preferred by the Company)

Note: Appeals pending at admission stage with appellate bodies are not considered in the above list.

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. On the basis of the records examined by us and the information and explanations given to us, the Company has delayed in repayment of dues to banks, financial institutions and debenturesholders. Attention is invited to footnote "j" to Note 5 with regards to banks and financial institutions and footnote "c" to Note 11 with regards to debentures, for the amounts and period of delays in payment of principal and interest thereon;

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 (xiii) of paragraph 4 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 (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company;

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year are, considering the circumstances, not prejudicial to the interest of the Company;

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which the loans were raised;

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. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies entered in the Register maintained under Section 301 of the Companies Act, 1956;

xix. According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures;

xx. The Company has not raised any money by public issue during the year; and

xxi. 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.

For doshi doshi and associates

Firm Registration Number: 121773W Chartered Accountants

Dinesh Doshi

Partner Membership No.: F-9464

Mumbai: May 29, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Hubtown Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our qualifed audit opinion.

Basis for Qualifed Opinion

1. Attention is invited to note no. 29 with regard to a major fre which took place at the registered offce of the Company on December 23, 2011, causing extensive damage and destruction of the records, documents and assets of the Company, including the fnancial accounting records. The Company has however substantially reconstructed the fnancial records which have been relied upon for our opinion. The management is of the opinion that no signifcant adjustment would be necessary, to the position reported in the fnancial statements, upon reconstruction of balance documents and records.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the matters included in paragraph 1 above, the fnancial 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Proft and Loss, of the proft for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Matter

Attention is invited to:

(a) Note no. 2 (III) (A) (ii) & (iii) in the fnancial statement with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgement of the management, which have been relied upon by us, these being technical matters.

(b) Note no. 4 (footnote c) in the fnancial statement with regard to the dividend recommended by the Board of Directors, wherein the concurrence of the secured debenture holders are required to be obtained in accordance with the ICDR guidelines and Debenture Trust Deed.

(c) Note no. 4 (footnote d) in the fnancial statement with regard to non creation of investments to the extent of 15% of the value of redeemable debentures, which is required to be created and earmarked in accordance with the requirement of the Companies Act, 1956.

(d) Note no. 13 (footnote c) in the fnancial statement with regard to investment in certain debentures.

(e) Statement of Proft & Loss which includes share of proft (net) from investment in partnership frms aggregating Rs. 3282.76 lacs and investments in these frms aggregating Rs. 33,987.39 lacs (Refer Note 13 (F) & (G), Note 17 and ‘Current accont balance'' in Note 10); are based on fnancial statements of the frms as audited by other auditors whose reports have been furnished to us and which have been relied upon by us.

(f) Note no. 13 (footnote e) regarding the Company''s investments aggregating Rs. 257.60 lacs in and loans and advances aggregating Rs. 95,702.98 lacs to, certain subsidiaries, joint controlled entities and associates which have incurred losses and also have negative net worth as at the year end. As explained in the said Note, investments in these entities are considered strategic and long term in nature, the entities are in early stage of real estate development and in the opinion of the Company, have current market values of certain property signifcantly in excess of carrying values and are expected to achieve adequate proftability on substantial completion of their projects.

(g) Note no. 18 (footnote b) of the fnancial statement regarding the status of the projects and the opinion framed by the Company regarding realizable value of the cost incurred, being a technical matter, relied upon by us.

(h) Note no. 22 (footnote) of the fnancial statement, with regard to the compensation received towards yield, which is arising on account of restructuring of the originally contracted respective terms for investments made through debentures.

(i) Note no. 34(B), regarding guarantees issued and securities provided aggregating Rs. 31,018.45 lacs issued by the Company to banks and fnancial institutions on behalf of various entities, which are signifcant in relation to the proft for the year and net worth of the Company. In the opinion of the Company, these are not expected to result into any fnancial liability to the Company.

(j) Note no. 34 (footnote) of the fnancial statement, with regard to reliance placed by the auditors on certifcation received from the management, with regard to corporate guarantees given by the Company.

Our opinion is not qualifed in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure, a statement on the matters specifed 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 purpose of our audit;

b. 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;

c. the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

annexure to audItors'' report

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fxed assets;

(b) The fxed assets are physically verifed 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. According to the information and explanations given to us, no material discrepancies were noticed on such verifcation;

(c) In our opinion and according to the information and explanations given to us, substantial part of the fxed assets has not been disposed of by the Company, during the year;

ii. (a) The inventory has been physically verifed by the Management during the year. In our opinion, the frequency of verifcation is reasonable;

(b) In our opinion, the procedures of physical verifcation 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 inventory. The discrepancies noticed on physical verifcation of inventory as compared to book records were not material;

iii. The Company has not granted / taken any loans, secured or unsecured from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956;

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fxed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company;

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year are mainly for reimbursement of actual expences and hence the question of comparable market price does not arise;

vi. 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 Companies Act, 1956 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;

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been maintained;

ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of undisputed VAT, Income tax deducted at source and Service tax, the Company is generally regular in depositing undisputed statutory dues including Wealth Tax, provident fund, investor education and protection fund, employees'' state insurance, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. At the year end, Income Tax Deducted at source of Rs.9,62,85,906, Maharashtra VAT of Rs. 29,96,429 and Service Tax of Rs. 1,79,54,073 remained outstanding for a period exceeding six months;

x. The Company has no accumulated losses at the end of the fnancial year and it has not incurred cash losses in the current and immediately preceding fnancial year;

xi. According to the records of the Company examined by us and the information, explanations and confrmation certifcations given to us, at the balance sheet date, the Company is not a defaulter in the repayment of dues to banks and fnancial institutions. The Company has defaulted in repayment of dues to debenture holders amounting to Rs. 1,43,56,94,511 (balance outstanding on the last day of the year) that became due for redemption on 1st March 2013, which includes an instance of delay in payment of interest amounting to Rs. 5,00,00,000 for a period of 181 days, upto the date of maturity;

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 & 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 beneft fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 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 (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company;

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or fnancial institutions during the year are, considering the circumstances, not prejudicial to the interest of the Company;

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

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. According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956;

xix. According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 3,000 debentures of Rs.1,00,000 each. The Company has created charge in respect of debentures issued;

xx. The Company has not raised any money by public issues during the year;

xxi. 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.

For Doshi Doshi & Associates For Haribhakti & Co.

Firm Registration Number: 121773W Firm Registration Number: 103523W

Chartered Accountants Chartered Accountants

Dinesh Doshi Chetan Desai

Partner Partner

Membership No.: F-9464 Membership Number: F-17000

Mumbai: May 29, 2013 Mumbai: May 29, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Hubtown 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 reasonaPle 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' 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 give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order,

4. Further to our comments in paragraph 3 above, we report that:

i. We have optained 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 of the Company;

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 of the Company;

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, we report that none of the 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;

5. Without qualifying our opinion, attention is invited to :

(a) Note no, 2 (iii) in the financial statements with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgement of the Management, which have been relied upon by us, these being technical matters.

(b) Note no. 2 (vii) in the financial statements with regard to manner in which expenses incurred by the Company on Joint Venture projects has been accounted for.

(c) Note no. 13 (footnote b) in the financial statements with regard to investment in certain debentures.

(d) Note no. 19(a) in the financial statements with regard to an amount of Rs. 1864.53 lacs which remained outstanding over two years. We have relied upon the Management's expectation that such amount would be fully recoveraPle

6. Attention is invited to Note no. 29 with regard to a major fire which took place at the registered office of the Company on DecemPer 23, 2011, causing extensive damage and destruction of the records, documents and assets of the Company, including the financial accounting records. The Company has, however, substantially reconstructed the financial records which have been relied upon for our opinion. The Management is of the opinion that no significant adjustment would Pe necessary, to the position reported in the financial statements, upon reconstruction of Palance documents and records.

7. Balances of trade payables and advances to suppliers are supject to confirmation & consequential adjustment, if any.

8, In our opinion, and to the best of our information and according to the explanations given to us, subject to the matter included in paragraphs 6 & 7 above, the said financial statements and the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and present 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; ana

c. in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure To Auditors' Report

1. (a) During the year, due to a major fire at the registered office of the Company, substantial fixed assets were destroyed, which were however insured. The Company has written off these assets from its financial recoras, The Company is maintaining proper records showing full particulars, including quantitative details and situation, of 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.

(c) In our opinion and according to the information and explanations given to us, apart from the destruction due to the fire at the registered office of the Company, substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the Management during the year. 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 ana 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 recoras, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regara to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information ana explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year are only for reimbursement of actual expenses and hence the question of comparable market price does not arise.

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 Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the puPlic. According to the information and explanations given to us, no Order has Peen passed Py 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.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescriPed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been maintained.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of undisputed VAT, Income Tax Deducted at Source, Wealth Tax and Service Tax, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor Education and Protection Fund, employees' state insurance, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. At the year end, Income Tax Deducted at source of Rs. 19,266,932/-, Wealth Tax of Rs. 260,000 and Maharashtra VAT of Rs. 862,637/- remained outstanding for a period exceeding six months.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax, weaith-tax, service-tax, customs duty, excise duty and cess which have not been deposited on account of any dispute, other than the following:

Statute and Financial Year Amount Forum where dispute is pending nature of dues (Rs.)

Income Tax Act, 1961:

Penalty 2000-2001 3,031,840

Penalty 2001-2002 5,827,603

Penalty 2002-2003 6,183,986

Penalty 2003-2004 13,490,265 Commissioner of Income Tax (Appeals)

Penalty 2004-2005 20,049,665

Penalty 2005-2006 16,065,086

Penalty 2006-2007 26,375,205

Income Tax 2008-2009 26,967,390

Service Tax Rules, 1994:

Service Tax Upto March 31, 69,864,666 Supreme Court (through Maharashtra 2012 Chamber of Housing Industry)

10. 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.

11. According to the information, explanations and confirmations provided by the Company, it has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

12. According to the information and explanations given to us and Pased 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, dePentures and other securities,

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments Accordingly, the provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given Py the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

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

17. According to the information and explanations given to us and on an overall examination of the Palance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 7,500 debentures of Rs.100,000 each. The Company has created charge in respect of debentures issued,

20. The Company has not raised any money Py public issues during the year.

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.

For Doshi Doshi & Associates For Haribhakti & Co.

Firm Registration Number: 121773W Firm Registration Number: 103523W

Chartered Accountants Chartered Accountants

Dinesh Doshi Chetan Desai

Partner Partner

Membership No.: F - 9464 Membership Number: F - 17000

Mumbai: May 30, 2012 Mumbai: May 30, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Ackruti City Limited ("the Company"), as at 31st March, 2011, the related Profit and Loss Account and 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 the 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 give in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 the books of the Company;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account 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 written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vi) 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 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, 2011;

(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 the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF ACKRUTI CITY LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31" MARCH, 2011._

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:-

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of 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 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. However, no physical verification was conducted during the year.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the Management during the year. 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 inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of properties / rights 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.

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, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time,

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.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of undisputed Work Contract Tax, Income tax deducted at source and Service tax, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth 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, there are no dues of sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess which have not been deposited on account of any dispute, other than the following;

Statute and nature of dues Financial Amount not Forum where dispute is pending Year deposited (Rs.)

Income Tax Act, 1961:

Penalty 2000-01 3,031,840

Penalty 2001-02 5,827,603

Penalty 2002-03 6,183,986

Penalty 2003-04 13,490,265

Penalty 2004-05 20,049,665 Commissioner of Income Tax (appeals)

Penalty 2005-06 16,065,086

Penalty 2006-07 26,375,205

Income Tax 2007-08 489,846,345

Income Tax 2008-09 26,967,390

Service Tax Rules, 1994:

Service Tax 2010-11 29,268,756 High Court (through Maharashtra Chamber of Housing Industry)

9. The Company has no accumulated losses as at 31st March, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

10. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

13. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

14. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

15. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

16. 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.

17. 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,

18. The Company has created security in respect of debentures issued and outstanding at the year-end.

19. The Company has not raised any money by public issues during the year,

20. 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.

The other clauses, (iii) (b), (iii) (c), (ii!) (d), (iii) (e), (iii) (f), (iii) (g) and (viii) of paragraph 4 of the Order, are not applicable in the case of the Company for the year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Doshi Doshi & Associates For Sudit K. Parekh & Co.

Firm Registration Number: 121773W Firm Registration Number: 110512W

Chartered Accountants Chartered Accountants

Viral D. Doshi Raman Jokhakar

Partner Partner

Membership No.: F - 105330 Membership Number: F - 103241

Mumbai: 30th May, 2011 Mumbai: 30th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Ackruti City Limited ("the Company"), as at 31st March, 2010, the related Profit and Loss Account and 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 the 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 give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 the books of the Company;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account 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 written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vii) 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 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, 2010;

(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 the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report

REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF ACKRUTI CITY LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2010

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:- 1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of 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 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. However, no physical verification was conducted during the year.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the Management during the year. 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 inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of properties 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.

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, the 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 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. (a) According to the information and explanations given to us and the records of the Company examined by us, in our

opinion, except for dues in respect of undisputed Income Tax, Work contract Tax, Income tax deducted at source and Service tax, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. Rs.183,696,417 towards advance income tax are outstanding for a period exceeding six months from the date the instalments became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

9. The Company has no accumulated losses as at 31st March, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

10. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

13. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

14. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

15. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

16. 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.

17. 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.

18. The Company has created security in respect of debentures issued and outstanding at the year-end.

19. The Company has not raised any money by public issues during the year.

20. 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.

The other clauses, (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii) (f), (iii) (g) and (viii) of paragraph 4 of the Order, are not applicable in the case of the Company for the year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For and on behalf of For and on behalf of

DALAL & SHAH DOSHI DOSHI & ASSOCIATES

Firm Registration No. 102021W Firm Registration No. 121773W

Chartered Accountants Chartered Accountants



SHISHIR DALAL VIRAL DOSHI

Partner Partner

Membership No.: F-37310 Membership No.: F-105330

Mumbai: 7th August, 2010 Mumbai: 7th August, 2010

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