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Auditor Report of Marathon Nextgen Realty Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Marathon Nextgen Realty Limited ("the Company"), which comprise of the Balance Sheet as at March 31,2015, the Statement of Profit and Loss, 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 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 and ensuring their operating effectiveness and 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 financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to 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 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 controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 March 31,2015, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the notes to the financial statements:

1. Note No. 10.3 regarding Investments of Rs. 125,02,62,000 return on which would accrue to the Company only on the investee Company generating revenue/profitfrom its activities.

2. Note No. 12.2 regarding the advances given by the Company, wherein the Company is of the opinion that such kind of arrangement will not attract the provisions of Section 185 of the Act.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(2) 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 written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015 from being appointed as a director in terms of Section 164 (2) of the Act;

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 information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 thereon;

(ii) The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of Marathon Nextgen Realty Limited on the financial statements for the year ended March 31,2015]

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

(b) During the year, the fixed assets of the Company have been physically verified by the management and as informed, no material discrepancies between the book records and the physical inventory were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As informed no material discrepancies were noticed on physical verification carried out during the year.

(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order are not applicable.

(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 for the purchase of inventory and fixed assets and for 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) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.

(vi) The Central Government of India has prescribed the maintenance of cost records for the products of the Company under sub-section (1) of Section 148 of the Act and the rules framed there under. However, at present the Company does not fall under the criteria for which such records are required to be maintained. Hence, the said rules are not applicable to the Company.

(vii) (a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees' state insurance, excise duty, sales tax, wealth tax, service tax, value added tax, cess and any other material statutory dues applicable to it. However, there have been slight delays in case of payment of income tax. Further, As explained to us, the provisions regarding customs duty are presently not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues with respect to income tax, sales tax, wealth tax, service tax, value added tax, duty of excise, and cess, which have not been deposited on account of any dispute except disclosed hereunder:

Name of statute Nature of Dues Amount (Rs.)

Central Excise Act, Excise Duty 92,58,246 1944 including penalty

Central Excise Act, Penalty 15,000 1944

Central Excise Act, Excise Duty 12,68,210 1944

Name of statute Period to which Forum where Amount relates dispute is pending

Central Excise Act, 1991 -92, 1992-93, Central Excise & 1944 1994-95,1995-96 Service Tax Appellate Tribunal (CESTAT)

Central Excise Act, 1998-99 Commissioner of 1944 Central Excise (Appeal)

Central Excise Act, 1977-78, 1983-84, Deputy Commissioner 1944 1990-91,1991-92, of Central Excise 1992-93 (Appeal)

(d) According to the information and explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(viii) The Company does not have accumulated losses at the end of the financial year nor has incurred cash losses in the current and immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a bank. There were no borrowings from financial institutions or debenture holders.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) The Company has not obtained any term loans.

(xii) 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 any such instance by the management.

For Haribhakti & Co. LLP

Chartered Accountants ICAI Firm Registration NO.103523W

Amit Hundia Partner Membership No.120761 Place: Mumbai Date: May 27, 2015




Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of MARATHON NEXTGEN REALTY LIMITED ("the Company"), which comprise the Balance Sheet as at March 31st, 2014, and the Statement of Profit and Loss and 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in 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 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 effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonable of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 affairs of the Company as at March 31 st, 2014;

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

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

Emphasis of Matter

1. We draw attention to Note No. 12 with regard to Investments of Rs 125,02,62,000 return on which would accrue to the Company only on the investee Company reaching the specified profit level.

2. We draw attention to Note no. 14 with regard to the development agreement wherein we are informed that the agreement is still in force. However, the relevant confirmation is yet to be obtained from the party.

Our opinion is not qualified 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 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 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 Profit 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 Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Act;

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

ANNEXURE TO AUDITORS'' REPORT

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of MARATHON NEXTGEN REALTY LIMITED on the financial statements for the year ended March 31 st, 2014]

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

(b) As explained to us, all fixed assets have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(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.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) The Company has granted loan to three companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 3,92,88,46,668 and the year-end balance of loans granted to such parties was Rs 3,87,11,45,244.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) The loans granted are repayable on demand. As informed, the Company has not demanded repayment of any such loan and interest during the year, thus, there has been no default on the part of the parties to whom the money has been lend. The payment of interest has been regular.

(d) As the Company has not demanded repayment of such loan and interest, there is no overdue amount more than rupees one lakh for the respective amounts.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii)(f)and (g) of the order are not applicable.

(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. During the course of our audit, we have not observed any continuing failure to correct 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 exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58Aand 58AAof the Act and the rules framed there under.

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

(viii) We have broadly reviewed the books of account maintained by the company 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 are required to be made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, excise duty, cess and other materia I statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, excise duty, cess and other undisputed statutory dues were outstanding, as at 31 st March 2014, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except for the dues in relation to excise duty as disclosed here under:

Period to Forum where Name of statute Nature of Amount which Amount dispute is Dues (Rs.) relates pending

199l-1992, Central Excise Excise Duty 90,83,934 1992-1993 Central Excise & Act, 1944 including 1994-1995, Appellate penalty 1995-1996, Tribunal(CESTAT) 1997-98, 1998-99

Central Excise 1977-78, Deputy Commiss- Act, 1944 Excise Duty 14,62,522 1983-84, ioner of Central 1990-91, Excise (Appeal) through 1992-93 The Employees'' Damages & Provident Funds interest and on delayed 38,83,486 Various Provident Fund Miscellaneous Payment- years Appelate Provisions Act, Employees Tribunal 1952 Provident Fund

Arrears of Employees''State contribution, 8,67,074 Various ES1C Court Insurance Act, damages and years (Appeal) 1948 delayed

payment of interest

(x) The company does not have any accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In respect of dealing / trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) In our opinion, 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, no debentures have been issued by the Company during the year.

(xx) The Company has not raised money by way of public issue 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 Haribhakti & Co. Chartered Accountants Firm''s Registration No. 103523W

Chetan Desai Partner Membership No. 17000

Place: Mumbai Date: 28th May, 2014


Mar 31, 2011

1. We have audited the attached Balance Sheet of MARATHON NEXTGEN REALTY LIMITED ('the Company') as at March 31,2011 and also the Profit and Loss account 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 ouraudit.

2. We conducted ouraudit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, 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 4and 5 of the said Order.

4. Further to our comments in the 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 those books.

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

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 the written representations received from the directors, as on March 31,2011, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on March 31,2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. Without qualifying our opinion, attention is invited to note no.8 (b) of Schedule M of financial statement in respect of a secured loan (lease rent discounting), which is not covered by the value of relevant security, which falls short by its entire amount of Rs. 22,50,82,684.

vii. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the above mentioned paragraph vi and along with notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31,2011;

b) in the case of the profit and loss account, of the profitfor the year ended on that date; and

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

ANNEXURETO AUDITORS'REPORT

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of MARATHON NEXTGEN REALTY LIMITED on the financial statements for theyear ended March 31,2011]

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

(b) The Company needs to have a regular programme of physical verification of its fixed assets, which in our opinion has to be made reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, as represented by the management to us, fixed assets were physically verified by the management during the year. We are informed that no material discrepancies were noticed on such verification.

(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.

(ii) (a) The inventory has to be physically verified by the management. In our opinion, the frequency of verification has to be made reasonable.

(b) The procedures of physical verification of inventory required to be followed by the management has to be made 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 records of the Company, we are of the opinion that the Company needs to strengthen the record keeping and documentation procedures for the inventory. The discrepancies noticed on verification between the physical and book records were not material.

(iii) (a) The Company has granted loan to six companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 4,65,26,55,516 and the year- end balance of loans granted to such parties was Rs. 2,79,62,15,694.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, other than the principle amount, the Company is regular in receipt of interest.

(d) In respect of the aforesaid loans, in the cases where the overdue amount is more than Rupees One lakh, in our opinion, reasonable steps have been taken by the company for the recovery of the principal amounts and interest, whereverapplicable.

(e) As informed, during the year the Company has not taken any loan, secured or unsecured from companies 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, the existing internal control procedures are required to be made adequate with the size of the Company and the nature of its business for the purchase of inventory. As regards, sale of goods and fixed assets, in our opinion, the existing system of internal control is adequate. On the basis of our examination of books and records of the Company, and according to the information and explanations given to us, except in relation of strengthening of internal control over purchase of inventory, there has not been continuing failure to correct major weakness in internal control system. As regards club house operated by the Company, the internal control procedure need to be streamlined and documented.

(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 exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) According to the information and explanations given to us, the Company does have an internal audit system, which needs to be considerably strengthened.

(viii) TheCentralGovernmentoflndiahasnotprescribedthemaintenanceofcostrecords under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. However, as represented to us, the amount pertaining to employee's state insurance as applicable, has neither been deducted nor deposited by the company with the appropriate authorities.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other statutory dues which were outstanding, at the year end for a period of more than six months from the date they became payable are as follows:

Name of the statute Nature of the Period to dues Amount (Rs.) Due Date Date of Which Payment the amount relates

Service Tax Service Tax 5,066 2008-2009 31st March, 2009 -

Income Tax Act, 1961 Interest u/s 234 B 2,02,79,779 2009-2010 30th September, 2010 -

Interest u/s 234 C 1,77,16,814 2009-2010 31st March, 2010 -

Advance income tax 5,96,20,861 2009-2010 31st March, 2010 -

Interest u/s 234 C 19,97,141 2010-2011 15th September 2010 -

Advance income tax 1,80,31,687 2010-2011 31st March, 2011 -

Maharashtra Labour Various dates of Welfare Fund (MLWF) MLWF 15,096 2006-2011 respective - year

During the previous year, the company has created the provision of Rs. 1780,617 on account of service tax liability, which in the opinion of the company is no longer payable. Hence, during the year the same has been written back by the company.

(C) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute except for the dues in relation to excise duty as disclosed hereunder:

Forum where

Name of the statute Nature of the dues Amount Rs. Period to which the amount relates dispute is pending

Central Excise Act, 1944 Excise duty 1,30,55,847 1990-91 through 1995-96,1998-99 CESTAT

63,42,042 1990-91,1991-92, 1992-93,1994-95 Commissioner

52,99,705 1977-78,1983-84, 1990-91, through Deputy Commissioner 1992-93,1994-95 through 1997-98

(x) The Company does not have any accumulated losses at the year end. Further, the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank.

(xii) According to the records of the Company and according to the information and explanations provided to us, we are of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, generally the Company did not deal or trade in it. However, on short term basis, surplus funds were invested in mutual fund for which proper records for the transaction and contracts have been maintained and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and according to the information and explanations given to us, the Company has given a guarantee for loans taken by others from banksorfinancial institutions.

(xvi) In our opinion and according to the information and explanation given to us, term loans obtained by the Company, are generally used forthe purpose for which 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, by comparing the current year financials with the previous year, we report that funds to the extent of Rs.12,46,29,329 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 preferential allotments of equity shares to the parties listed in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year (except to the extent of amounts remaining uncollected) the question of creating security, in respect of debentures, does not arise.

(xx) The Company has not raised any money by way of public issue during the year. Hence the provisions of clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(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 Haribhakti & Co.

Chartered Accountants

Firm's Registration No. 103523W

Chetan Desai

Partner

Membership No. 17000

Place: Mumbai

Date: 30th May, 2011
















Mar 31, 2010

1. We have audited the attached Balance Sheet of MARATHON NEXTGEN REALTY LIMITED (the Company) as at March 31, 2010 and also the Profit and Loss account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, 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 the 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 those books.

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

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 the written representations received from the Directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. Without qualifying our opinion, attention is invited in respect of a transaction of purchase of leasehold right and ultimate sale of Development Rights to a related party during the previous year. The Company had in the previous year recorded profits aggregating to Rs. 42,56,00,000 in this transaction. During the year the Company has received property in lieu of the net amount of Rs. 39,41,44,372 due from the related party and the value of the property so received has been shown as purchase / stock of finished property.(Refer Note No. 6 of Schedule M).

vii. The adequacy of provision for income tax, which comprises of long term capital gain and business and other income, have been as certified by another Chartered Accountant.

viii. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the above mentioned paragraph vi, vii, and viii and along with notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 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 cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT [Referred to in paragraph 3 of the Auditors Report of even date to the members of MARATHON NEXTGEN REALTY LIMITED on the financial statements for the year ended March 31, 2010]

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

(b) The Company needs to have a regular programme of physical verification of its fixed assets, which in our opinion has to be made reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, as represented by the management to us, fixed assets were physically verified by the management during the year. We are informed that no material discrepancies were noticed on such verification.

(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.

ii. (a) The inventory has to be physically verified by the management. In our opinion, the frequency of verification has to be made reasonable.

(b) The procedures of physical verification of inventory required to be followed by the management has to be made 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 records of the Company, we are of the opinion that the Company needs to strengthen the record keeping and documentation procedures for the inventory. The discrepancies noticed on verification between the physical and book records were not material.

iii. (a) The Company has granted loan to five companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 426,75,25,034 and the year- end balance of loans granted to such parties was Rs. 309,80,61,113.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The receipt of interest and principal amount is required to be made regular.

(d) In respect of the aforesaid loans, in the cases where the overdue amount is more than Rupees One lakh, in our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest, wherever applicable.

(e) As informed, the Company has taken unsecured loan, from Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2,65,51,775 and the year-end balance of loans taken from such parties was Nil.

iv. In our opinion and according to the information and explanations given to us, the existing internal control procedures are required to be made adequate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets. As regards, sale of goods, in our opinion, the existing system of internal control is adequate. On the basis of our examination of books and records of the Company, and according to the information and explanations given to us, except in relation of strengthening of internal control over purchase of inventory and fixed assets there has not been continuing failure to correct major weakness in internal control system. As regards club house operated by the Company, the internal control procedure need to be streamlined and documented.

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 exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. According to the information and explanations given to us, the Company does not have an internal audit system.

viii. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub- section (1) of Section 209 of the Act for any of the products of the Company.

ix. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other statutory dues which were outstanding, at the year end for a period of more than six months from the date they became payable are as follows:

Name of the statute Nature of the Amount (Rs) Period to which dues the amount relates

Service Tax Service Tax 12,46,224 2009-2010

Income Tax Act, Interest u/s 70,02,596 2007-2008 1961 234 B

Interest u/s 46,68,397 2007-2008 220

Interest u/s 77,40,000 2009-2010 234 C

Advance income 10,69,90,538 2009-2010 tax

Name of the Statue Due Date Date of Payment

Service Tax 31st March, 2010 -

Income Tax Act, 1961 31st March, 2008 -

31st March, 2008 -

15th September, - 2009

15th September, - 2009

© According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute except for the dues in relation to excise duty as disclosed hereunder:

Name of the statute Nature of dues Amount (Rs) Period to which the amount relates

Central Excise Act, Excise duty 1,30,55,847 1990-91 through 1995-96, 1944 1998-99

63,42,042 1990-91, 1991 -92, 1992-93, 1994-95

52,99,705 1977-78, 1983-84, 1990-91, through 1992-93, 1994-95, through 1997-98

Name of the Statue Forum where dispute is pending

Centarl Excise Act, CESTAT 1944 Commissioner Deputy Commissioner

x. The Company does not have any accumulated losses at the year end. Further, the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank.

xii. According to the records of the Company and according to the information and explanations provided to us, we are of the opinion that 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 f und or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

xiv. In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, generally the Company did not deal or trade in it. However, on short term basis, surplus funds were invested in mutual fund for which proper records for the transaction and contracts have been maintained and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) In our opinion and according to the information and explanation given to us, out of the term loans obtained by the Company, a sum of Rs. 14,53,00,000 have been applied for the purpose for which loan 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 preferential allotments of equity shares to the parties listed in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year (except to the extent of amounts remaining uncollected) the question of creating security, in respect of debentures, does not arise.

(xx) The Company has not raised any money by way of public issue during the year. Hence the provisions of clause (4) (xx) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(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 Haribhakti & Co. Chartered Accountants FRN NO.103523W

Chetan Desai

Partner

Membership No. 17000

Place: Mumbai Date : 31st May, 2010



 
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