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Auditor Report of Nitesh Estates Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Nitesh Estates Limited ("the Company"), which comprise the Balance Sheet as at 31 March 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 on a going concern basis 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and consistent application of appropriate accounting policies and making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that operate 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. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 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 standalone 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.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's 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 under provisions of 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 Balance Sheet, the aforesaid financial statements comply with the Accounting Standards referred to in 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 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.

(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's observations on the impact of pending litigations on its financial position in its financial statements mentioned in Note No 25 which as per their representation will have no material impact.

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.

Annexure to the Independent Auditor's Report

(Referred to in paragraph 1 of our report of even date)

(i) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) The company is in the business of real estate development and related services and holds inventories in the form of land, properties under development and constructed properties. In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company has not granted any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub section (1) of Section 148 of the Companies Act, 2013 in respect of real estate and development activities and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities

There are no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, or Duty of Customs or Duty of Excise or Value Added Tax or Cess which have not been deposited as on 31 March, 2015 on account of disputes are given below:

Name of the Nature of the Amount Period to which statute dues (Rs. in lakhs) amount Pertains

Income Tax Act Income Tax 22.50 AY 2011-12

Finance Act, 1994 Service Tax 311.56 AY 2007-08

Name of the Forum where Disputes is Pending statute

Income Tax Act Asst Commissioner of Income Tax Appeals

Finance Act, 1994 CESTAT

(c) In our opinion and according to the information and explanations given to us, there are no amounts which are required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The accumulated losses of the Company at the end of the financial year are not more than fifty per cent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

for RAY & RAY

Chartered Accountants (Firm's registration number: 301072E)

Mrinal Kanti Bandyopadhyay Partner Membership No. 051572

Place: Bangalore Date: 28 May 2015




Mar 31, 2014

We have audited the accompanying financial statements of Nitesh Estates Limited ("the Company"), which comprise the balance sheet as at 31 March 2014, the statement of profit and loss and the cash fow 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 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.

Auditor''s 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the efectiveness of the entity''s internal control. 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 financial statements.

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

Basis for qualified Opinion

As stated in note 37 to the financial statements, the Company has advanced an amount aggregating Rs 157,000,000 as at 31 March 2014, to various parties for purchase/joint development of land/ properties. Considering the timeline of these advances, the same should have been converted into acquired land / joint development agreements or these amounts should have been recovered. Management continues to believe that these advances have been made to parties for which joint development agreements / acquisition of land will be consummated and in the event that it does not consummate, these advances can be recovered. However, in the absence of sufcient documentation to justify the timing around when these advances are capable of being converted into joint development agreements / acquisition of land and considering that they are not secured, we are unable to comment on the recoverability of these advances and the consequential efect, if any, on the financial statement for the year ended 31 March 2014.

qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the efects of the matter described in the Basis for qualified Opinion paragraph, 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:

Auditor''s Report (Contd.)

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

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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, the statement of profit and loss and the cash fow statement dealt with by this report are in agreement with the books of account;

(d) except for the possible efect of the matter described in the Basis for qualified Opinion paragraph in our opinion, the balance sheet, the statement of profit and loss, and the cash fow statement comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956; and

(e) on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, 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 the Independent Auditor''s Report

Annexure referred to in the Independent Auditors'' Report to the Members of Nitesh Estates Limited ("the Company") for the year ended 31 March 2014. We report that:

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

assets.

(b) The Company has a regular programme of physical verifcation of its fixed assets by which all fixed assets are verifed in a phased manner over a period of two years. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifcation.

(c) The Company has not disposed any fixed assets during the year and accordingly clause 4(i)(c) of the Order is not applicable.

2) The Company is in the business of real estate development and related services and holds inventories in the form of land, properties under development and constructed properties. Thus, paragraph 4(ii) of the Order is not applicable.

3) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year. Accordingly paragraph 4(iii) is not applicable to the Company.

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

5) (a) In our opinion, and according to information and explanations given to us, the particulars of contracts or arrangements

referred to Section 301 of the Companies Act, 1956 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 contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for sale of certain goods for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

6) The Company has not accepted any deposits from the public.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9) (a) According to the information and explanations given to us and on the basis of our examination of the records of the

Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Sales tax, Income tax, Service tax, Employees State Insurance and other material statutory dues have generally been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of Customs duty, Investor Education and Protection Fund, Wealth tax, and Excise duty.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Sales tax, Income tax, Service tax, Employees'' State Insurance and other material statutory dues were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

Annexure to the Independent Auditor''s Report (Contd.)

(b) According to the information and explanations given to us, the following dues of Income tax and Service tax have not been deposited by the Company on account of disputes. The Company does not have any disputed dues in relation to sales tax.

Name of the Nature of Amount of tax Amount paid Period to which statute the dues under dispute under protest the amount (Rs.) (Rs.) relates

Income Tax Income tax 8,81,108 - AY 2011-12 Act, 1961

Finance Act, Service tax 31,156,450 - AY 2007-08 1994

Name of the Statute Forum where dispute is pending

Income Tax Act 1961 Commissioner of Income-tax (Appeals)

Finance Act 1994 Customs, Excise and Service Tax Appellate Tribunal

10) The accumulated losses at the end of the financial year are less than fifty percent of the net-worth of the Company. The Company has not incurred cash losses in the current financial year. However, the Company had incurred cash losses amounting to Rs 267,859,271 in the immediately preceding financial year.

11) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers, debenture holders or to any financial institutions.

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

13) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/nidhi/mutual benefit fund/society.

14) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15) According to the information and explanations given to us, the Company has given guarantees for loans availed by subsidiary companies amounting to Rs 3,400,000,000. In our opinion, the terms and conditions on which these guarantees are given are prima facie 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 taken by the Company have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been used for long-term investment.

18) During the current year, the Company has not made any preferential allotment of shares to companies/ firms/ parties covered in the register maintained under Section 301 of the Companies Act, 1956.

19) According to the information and explanations given to us, the Company has created security or charge in respect of debentures outstanding during the year.

20) The Company did not raise any money by public issues during the year.

21) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Co. LLP

Chartered Accountants Firm registration number: 101248W

Sampad Guha Thakurta Partner Membership No. 060573

Place: Bangalore Date: 28 May 2014


Mar 31, 2013

Report on the fnancial statements

We have audited the accompanying fnancial statements of Nitesh Estates Limited ("the Company"), which comprise the balance sheet as at 31 March 2013, the statement of proft and loss and the cash fow statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s responsibility for the fnancial 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 the 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.

Auditor''s 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 auditor''s 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 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 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 afairs of the Company as at 31 March 2013;

(b) in the case of the statement of proft and loss, of the loss for the year ended on that date; and

(c) in the case of the cash fow statement, of the cash fows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("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, the statement of proft and loss and the cash fow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the balance sheet, the statement of proft and loss and the cash fow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act, to the extent applicable;

(e) on the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on 31 March 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 the Auditors Report

Annexure referred to in our report to the Members of Nitesh Estates Limited ("the Company") for the year ended 31 March 2013. We report that:

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

(b) The Company has a regular programme of physical verifcation of its fxed assets by which all fxed assets are verifed in a phased manner over a period of two years. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifcation.

(c) The Company has not disposed any fxed assets during the year and accordingly clause 4(i)(c) of the Order is not applicable.

2) The Company is in the business of real estate development and related services and holds inventories in the form of land, properties under development and constructed properties. Thus, paragraph 4(ii) of the Order is not applicable.

3) (a) According to the information and explanations given to us, the Company has granted interest-free advances in the nature of loans to one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 110,270 (previous year Rs 12,238,190) and the year-end balance was Rs.nil (previous year Rs 110,270).

(b) In our opinion, the terms and conditions on which loans have been given to companies, frms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are, prima facie, not prejudicial to the interest of the Company.

(c) In the case of loans granted to parties listed in the register maintained under section 301, there are no specifc covenants with regard to the repayment. As informed to us, the party has repaid the advances as demanded during the year, and thus, there has been no default on the part of the party. The advances given are interest free.

(d) According to the information and explanations given to us, the Company has not 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. Accordingly paragraph 4(iii)(e) to (g) of the Order is not applicable.

4) In our opinion and according to the information and explanations given to us, and having regard to the explanation that sale of certain goods are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fxed assets and inventories and sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal control system.

5) (a) In our opinion, and according to information and explanations given to us, the particulars of contracts or arrangements referred to section 301 of the Companies Act, 1956 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 contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for sale of certain goods for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

6) The Company has not accepted any deposits from the public.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Sales tax, Income tax, Service tax, Employees State Insurance and other material statutory dues have been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of, Customs duty, Investor Education and Protection Fund, Wealth-tax, and Excise duty.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Sales tax, Income-tax, Service tax and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

10) The accumulated losses at the end of the fnancial year are less than ffty percent of the net-worth of the Company. However, the company has incurred cash losses in the fnancial year amounting to Rs 267,859,271 and an amount of Rs 53,163,107 in the immediately preceding fnancial year.

11) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers, debenture holders or to any fnancial institutions.

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

13) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/nidhi/mutual beneft fund/society.

14) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15) According to the information and explanations given to us, the Company has given guarantees for loans availed by subsidiary companies amounting to Rs 1,020,000,000. In our opinion, the terms and conditions on which these guarantees are given are prima facie 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 taken by the company have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been used for long-term investments.

18) During the current year, the Company has not made any preferential allotment of shares to companies/ frms/ parties 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 has issued 6,000, 18.5 % secured non-convertible debentures, of Rs 100,000 each aggregating Rs 600,000,000. The Company has created a charge in respect of the debentures issued.

20) The Company did not raise any money by public issues during the year.

21) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Co.

Chartered Accountants

Firm registration number: 101248W

Zubin Shekary

Partner

Membership No. 48814

Place: Bangalore

Date: 30 May 2013


Mar 31, 2012

1. We have audited the attached balance sheet of Nitesh Estates Limited ('the Company') as at March 31, 2012 and also the statement of Profit and loss and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we draw attention to:

a. Note 39 of the financial statements regarding advance against property amounting to Rs.215,000,000 as at March 31, 2012 towards purchase of land. The Company has initiated legal proceedings in respect of the aforesaid arrangement. Pending the ultimate outcome of the legal proceedings and based on legal advice, no adjustments have been made to the financial statements for the year ended March 31, 2012.

b. Note 29(d) of the financial statements regarding sales returns from a company owned by a key managerial personnel of the Company more fully described therein, having no impact on the loss for the year ended March 31, 2012.

5. The Company has tax losses during the year ended March 31, 2012 and has deferred tax assets of Rs.38,786,193 as at March 31, 2012 (March 31, 2011-Rs.13,101,834). The Company has recognized deferred tax assets on the basis of future taxable income and ultimate outcome of certain ongoing and proposed projects, which in our opinion, does not meet the requirement of virtual certainty for recognition of deferred tax asset as required under Accounting Standard 22 "Accounting for Taxes on Income", notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended). This had caused us to qualify our audit opinion on the financial statements relating to the preceding year. Had such deferred tax assets not been recognized, loss for the year would have been higher by Rs.38,786,193 (Profit for the year ended March 31, 2011 would have been lower by Rs. 13,101,834). Further, deferred tax assets and reserves and surplus as at March 31, 2012 would have been lower by Rs.38,786,193 (March 31, 2011-Rs.13,101,834).

6. As of March 31, 2012, the Company has investment of Rs.2,436,388,828 (including Share application money pending allotment of Rs.830,647,828) in subsidiary companies. Based on the audited financial statements of the subsidiary companies as made available to us by the Company, it is observed that the subsidiary companies have given advances amounting to Rs. 828,236,000 to companies owned by or significantly influenced by key managerial personnel, towards real estate projects, which are in various stages of development/ project set-up. Pending settlement of such advances or achievement of Profitable operations of such real estate projects in future as the case may be, we are unable to comment on the matter and the consequential effect, if any, on the financial statements for the year ended March 31, 2012.

7. Further to our comments in the Annexure referred to above, we report that:

i. Except for our comment in paragraph 6 above, 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. Except for our comment in paragraph 5 above, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The balance sheet, statement of Profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv. Except for our comment in paragraph 5 above, 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;

vi. In our opinion and to the best of our information and according to the explanations given to us except for the effect of the matter stated in paragraph 5 above and the possible effect of the matter stated in paragraph 6 above, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a. in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

b. in the case of the statement of Profit and loss, of the loss 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 referred to in paragraph 3 of our report of even date Re: Nitesh Estates Limited ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identifed on such verifcation.

(c) There was no disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verifcation of inventory at reasonable intervals during the year.

(b) 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) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifcation.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has granted interest-free advances in the nature of loans to one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.12,238,190 and the year-end balance was Rs.110,270.

(b) According to the information and explanations given to us, and having regard to management's representation that the interest-free advances are given to parties who are undertaking real estate development projects in which the Company has commercial interest, the rate of interest and other terms and conditions for such advances are not prima facie prejudicial to the interest of the Company.

(c) According to the information and explanations given to us, there are no Specific covenants with regard to the repayment of such advances. We are informed that the Company has not demanded repayment of any such advances during the year, and thus, there has been no default on the part of the parties to whom the advances have been granted. The advances given are interest free.

(d) There is no overdue amount of such advances granted to parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has taken interest-free advances in the nature of loans from two parties covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs.62,544,628 and the year-end balance was Rs.43,269,441.

(f) In our opinion and according to the information and explanations given to us, the terms and conditions for such interest- free advances are not prima facie prejudicial to the interest of the Company.

(g) According to the information and explanations given to us, there are no Specific covenants with regard to the repayment of such advances. As informed to us, the Company has repaid the advances as demanded during the year, and thus, there has been no default on the part of the Company. The advances taken are interest free.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets, however, the internal control system with respect to timely documentation for purchase of inventory and for rendering of services require further strengthening. The activities of the Company do not involve sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

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

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transact ons were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) 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 have generally been regularly deposited with the appropriate authorities.

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

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follow:

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

Income Tax Act, Income tax 418,536 FY 2006-07 Commissioner of Income- tax (Appeals) 1961 29,857,170 FY 2007-08

5,140,706 FY 2008-09

Finance Act, Service tax and 31,156,450 FY 2006-08 Customs, Excise and Service Tax 1994 penalty Appellate Tribunal

(x) The Company has no accumulated losses at the end of the financial year and it has incurred cash losses in the current financial year. In the immediately preceding financial year, the Company had not incurred cash loss.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company did not have any outstanding debentures during the year.

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

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

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

(xv) According to the information and explanations given to us, the Company has given guarantee for loan taken by subsidiary from bank, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company, having regard to management's representation that the guarantee is given to subsidiary in the interest of the Company's business. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans, except for term loan of Rs.75 million taken and utilized in the previous year and outstanding as at the balance sheet date, were applied for the purpose for which the loans were obtained.

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

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. BATLIBOI & ASSOCIATES Firm Registration No.101049W Chartered Accountants

per Adarsh Ranka

Partner

Membership No.: 209567

Place : Mumbai Date : May 25, 2012


Mar 31, 2011

1. We have audited the attached balance sheet of Nitesh Estates 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 our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we draw attention to Note 21 in Notes to Accounts regarding purchase of services amounting to Rs.11,676,140 during the year ended March 31,2011, from private limited companies, covered under Section 297 of the Companies Act, 1956, in respect of which no prior approval of Central Government as required under Section 297 of the Companies Act, 1956 was obtained. In this regard, the Company has applied to the Company Law Board ('CLB') under section 621A of the Companies Act, 1956 for compounding of the above non-compliance, which is under review by the CLB. Pending such approval, no adjustments have been made to the financial statements for the year ended March 31,2011.

5. During the year ended March 31,2011, the Company purchased a developed property (apartment) from a related party for a consideration of Rs.30,462,885 (including other charges) and sold the said apartment to another party for a consideration of Rs.60,000,000. Having regard to the pricing of the aforesaid transactions and the terms of collection of sale proceeds, we are unable to comment on the aforesaid transactions and its impact, if any, on the financial statements for the year ended March 31,2011.

6. The Company has tax losses during the year ended March 31,2011 and has deferred tax assets of Rs. 13,101,834 as at March 31,2011. The Company has recognized deferred tax assets on the basis of future taxable income and ultimate outcome of certain ongoing and proposed projects, which in our opinion, does not meet the requirement of virtual certainty for recognition of deferred tax asset as required under Accounting Standard 22 "Accounting for Taxes on Income", notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended). Had such deferred tax assets not been recognized, profit for the year would have been lower by Rs. 13,101,834. Further, deferred tax assets and reserves and surplus would have been lower by Rs. 13,101,834 as at March 31,2011.

7. Further to our comments in the Annexure referred to above, we report that:

i. Subject to our comment in paragraph 5 above, 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. Subject to our comment in paragraph 6 above, 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. Subject to our comment in paragraph 6 above, 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 is disqualified as on March 31,2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us subject to the matter in paragraph 5, the impact of which is not ascertainable and the consequential effect of matter specified in paragraph 6 above, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: Nitesh Estates Limited ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has granted interest-free advances in the nature of loans to three parties (one subsidiary and two affiliates) covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.27,649,136 and the year-end balance of interest-free advances granted to such parties was Rs.12,238,190.

(b) According to the information and explanations given to us, and having regard to management's representation that the interest-free advances are given to parties who are undertaking real estate development projects in which the Company has commercial interest, the rate of interest and other terms and conditions for such advances are not prima facie prejudicial to the interest of the Company.

(c) According to the information and explanations given to us, there are no specific covenants with regard to the repayment of such advances. We are informed that the Company has not demanded repayment of any such advances during the year, and thus, there has been no default on the part of the parties to whom the advances have been granted. The advances given are interest free.

(d) There is no overdue amount of such advances granted to parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company has taken loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.25,865,000 and the year-end balance of loan taken from such party was Rs.Nil.

(f) In our opinion and according to the information and explanations given to us, the terms and conditions for such interest-free loan were not prima facie prejudicial to the interest of the Company.

(g) According to the information and explanations given to us, there were no specific covenants with regard to the repayment of such loan. The Company has repaid such loan during the year and thus, there has been no default on the part of the Company. The loan taken was interest free.

(h) The Company has also taken interest-free advances in the nature of loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.134,880,404 and the year-end balance of such interest-free advances taken from such parties was Rs.59,875,645. In our opinion and according to the information and explanations given to us, the terms and conditions for such interest-free advances are not prima facie prejudicial to the interest of the Company. According to the information and explanations given to us, there are no specific covenants with regard to the repayment of such advances. As informed to us, the parties have not demanded repayment of any such advances during the year, and thus, there has been no default on the part of the Company. The advances taken are interest free.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets, however, the internal control system with respect to timely documentation for purchase of inventory and for rendering of services require further strengthening. The activities of the Company do not involve sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

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

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevanttime.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956, for the products of the Company.

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

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A 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, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Nature of Amount Period to Forum where Name of the statute dues (Rs) which the dispute is pending amount relates

418,536 FY 2006-07 commissioner of IncomeTax Act, 1961 Incometax 29,857,170 FY 2007-08 Income-tax (Appeals)

Finance Act, 1994 Service tax 31,156,450 FY 2006-08 Customs, Excise and and penalty Service Tax Appellate Tribunal

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of dues to financial institution and bank as given below. The Company did not have any outstanding debentures during the year.

Nature of the dues Amount (Rs.) Delays Payment Date

Principal amount due to financial 490,190,271 1 - 125days Various dates* institution and bank

Interest amount due to financial 37,255,789 l - 49days Various dates* institution and bank

* These dues are not outstanding as at the balance sheet date.

(xii) According to the information and explanations given to us and based on the documents and records produced before 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 clause4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

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

(xv) The Company has given guarantees in respect of loans taken by others from a bank and a financial institution in respect of which no consideration has been charged. There are no other guarantees given by the Company for loans taken by others from bank or financial institutions.

(xvi) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that term loan amounting to Rs.l 50,000,000 has not been utilized for the purpose for which the loan was obtained.

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

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) We have verified that the end use of money raised by public issue is as disclosed in the notes to the financial statements.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. BATLIBOI & ASSOCIATES

Firm Registration No.101049W

Chartered Accountants

perAdarshRanka

Partner

Membership No.: 209567

Place: Mumbai

Date: 30th May, 2011










Mar 31, 2010

1. We have audited the attached Balance Sheet of Nitesh Estates Limited (formerly Nitesh Estates Private 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) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we draw attention to Note 21 in Notes to Accounts, regarding the Companys investment of Rs.244,920,181 as at March 31, 2010, in the equity shares towards share capital of Nitesh Indiranagar Retail Private Limited (NIRPL), a wholly owned subsidiary of the Company. NIRPL has paid a non-refundable deposit of Rs.355,000,000 to the landowner under a Memorandum of Understanding (MOU) and has incurred other project specific expenses amounting to Rs.242,012,142. Under the terms of the aforesaid MOU, a joint development agreement f JDA) was to be executed by NIRPL on or before June 30, 2010, failing which the other party is entitled to forfeit the aforesaid non-refundable deposit and not continue with the joint development arrangement. As further discussed in Note 21, as informed to us, NIRPL and the other party have been and are in active discussions to finalise the terms of the JDA and the other party has not forfeited the aforesaid deposit. Pending final outcome in the matter, no adjustments have been made in this regard to the financial statements as at March 31, 2010.

5. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The balance sheet, 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. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a. in the case of the balance sheet, of the state of affairs of the Company as at March 31, 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 referred to in paragraph 3 of our report of even date

Re: Nitesh Estates Limited (formerly Nitesh Estates Private Limited) (the Company)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) 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 301 of the Companies Act, 1956. However, the Company has granted interest-free advances in nature of loans to three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.45,246,499 and the year-end balance receivable from such parties is Rs.27,146,499. The advances have been granted for various real estate development projects being undertaken by such entities, in which the Company has interest. Accordingly, the terms and conditions of such advances are not prima facie prejudicial to the interest of the Company. According to the information and explanations given to us, there are no specific covenants with regard to the repayment of such advances and the Company has not demanded repayment of such advances during the year. Thus, there has been no default on the part of the parties to whom the advances have been made.

(b) As informed, the Company has taken loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.27,515,000 and the year-end balance payable is Rs.25,865,000. According to the information and explanations given to us, the loan taken is interest-free. Accordingly, the terms and conditions of such advances are not prima facie prejudicial to the interest of the Company. Further, there are no specific covenants with regard to the repayment of such loan and the party has not demanded repayment of such loan during the year. Thus, there has been no default on the part of the Company.

The Company has also taken interest-free advances in nature of loans from three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.299,815,885 and the year-end balance payable to such parties is Rs. 134,880,404. The advances have been taken for various real estate development projects being undertaken by the Company, in which such parties have interest. Accordingly, the terms and conditions of such advances are not prima facie prejudicial to the interest of the Company. According to the information and explanations given to us, there are no specific covenants with regard to the repayment of such advances and the parties have not demanded repayment of such advances during the year. Thus, there has been no default on the part of the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company. The clause relating to sale of goods is not applicable to the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered. (b) In respect of transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs entered into during the financial year, based on information and explanations provided to us by management, and having regard to the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment on whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth-tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities though there has been significant delay in deposit of service tax and withholding tax during April 2009 to September 2009. 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, 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 yearend 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 Period to which Due date Date of dues Rupees the amount relates payment

Income Tax Interest on 3,204,743 May 2008 to Various August 11,2010 Act,1961 Withholding Taxes August 2009 dates

(c) According to the information and explanation given to 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, except as follows:

Name of the statute Nature of Amount Period to which Forum where dues (Rupees) the amount relates dispute is pending

Income Tax Act, 1961 Income tax 418,536 FY 2006-07 Commissioner of Income-tax (Appeals)

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution and bank, except as given below. The Company did not have any outstanding debentures during the year.

Nature of the dues Amount (Rupees) Delays Payment Date

Principal amount due to bank 23,500,000 47 days May 17,2010

Interest amount due to financial institution and bank 83,539,455 1-91 days Various dates*

2,244,314 3 days April 3,2010

650,910 26 days April 26,2010

326,271 29 days April 29,2010

112,530 39 days April 8,2010

12,442,621 49 days May 19,2010

1,420,255 59 days April 28,2010

96,100 60 days April 1,2010

130,697 64 days April 5,2010

348,299 67 days April 8,2010

1,012,005 80 days May 19,2010

1,481,832 87 days April 28,2010

703,981 88 days April29,2010

759,490 89 days April 30, 2010

* These dues are not outstanding as at the balance sheet date.

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

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

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

(xv) The Company has given guarantees in respect of loans taken by others from bank and financial institution in respect of which no consideration has been charged. There are no other guarantees given by the Company for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans, except for term loan of Rs.500 million taken and utilized in the previous year and outstanding as at the balance sheet date, were applied for the purpose for which the loans were obtained.

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

(xviii) The Company has made preferential allotment of shares to a company covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations and specific representations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. BATLIBOI & ASSOCIATES Firm Registration No.101049W Chartered Accountants

per Aditya Vikram Bhauwala Place: Bangalore Partner

Date: August 11, 2010 Membership No.: 208382



 
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