Auditor Report of Rainbow Foundations Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/S. RAINBOW FOUNDATIONS LIMITED, CHENNAI - 600 017 ( the Company ), which comprise the Balance Sheet as at March 31, 2015 and 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 general 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 judgements and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of 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 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 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date:

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.

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 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 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 Auditor) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :

i. The Company does not have any pending litigations which would impact its financial position.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in Paragraph 1 under the heading Report on Other Legal and Regulatory Requirements of our Independent Auditors Report to the shareholders of M/S RAINBOwW FOUNDATIONS LIMITED, for the year ended 31st March 2015 and in terms of the information and explanations given to us and also on the basis of such checks as we considered appropriate we further state that:

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

b. All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

b. The procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us and in our opinion, 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 Companies Act.

(iv) According to the information and explanations given to us and in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of flats and plots. Further, on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedure.

(v) According to the information and explanations given to us and in our opinion, the Company has not accepted any deposit within the meaning of the Provisions of Section 73 to 76 or any other relevant provisions of Companies Act and the rules framed thereunder. According to the information and explanation given to us, no order been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) In our opinion, and according to the information and explanations given to us, the company is not required to maintain cost records under Section 148 of the Companies Act.

(vii) a. According to the information and explanations given to us and in our opinion, the company is regular in depositing undisputed statutory dues including provident fund, employee s 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 and no dues for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, there are no dues of sale tax or wealth tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute.

The particulars of Income Tax and Service Tax as at 31st March 2015 which have not been deposited on account of dispute are as follows:

Name of the Nature of Dues Amount under dispute Statue not yet deposited Rs.

Income Tax Income tax 2,85,218 Act 1961 including interest till the date of assessment

Income Tax Income Tax Rs. 3,33,003/- Act 1961 Along with Interest till the date of Assessment

Finance Service Tax & Rs. 7,91,330/- Act 1994 Penalty, Interest (Service lax) to be quantified till the date of actual payment

Finance Service Tax & Act 1994 Penalty, Interest (Service lax) to be quantified till the date of Rs. 29,71,557/- actual payment

Name of the Period to which Forum where the Statue amount relates dispute is pending

Income Tax AY 2002-03 The Hon’ble Madras Act 1961 High court, Chennai

Income Tax AY 2007-08 The Commissioner of Income Act 1961 Tax (Appeals) Chennai

Finance From November 2004 The Commissioner of Central Act 1994 to Excise (Appeals) Chennai (Service lax) September 2007

Finance 2006-2007 The Commissioner of Central Act 1994 to Excise (Appeals) Chennai (Service lax) 2010-20 11

c. According to the information and explanations given to us and in our opinion, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

(viii) In our opinion and according to the information and explanations given to us, the company does not have any accumulated loss. The company has not incurred cash losses during the financial year and the 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 financial institution and banks, and there are no debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) In our opinion, and according to the information and explanations given to us, the company has taken term loans from financial institutions and the term loans have been applied for the purpose for which loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

PLACE: CHENNAI For JAIN BAFNA AND CO. DATE: 29.05.2015 (Chartered Accountants) Firm Reg No:010657 S



(S.MUTHU KUMAR) (Partner) Address: F-1,58, Greams Road, Chennai 600 006 Mem No: 209636

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Mar 31, 2014

We have audited the accompanying financial statements of M/S. RAINBOW FOUNDATIONS LIMITED, CHENNAI - 600 017 ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss for the year then ended, 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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.

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. 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 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, 2014;

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

(c) In the case of the Cash Flow 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") 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 Companies Act, 1956;

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

In the case of M/s RAINBOW FOUNDATIONS LIMITED,

The Annexure referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditors Report to the shareholders of M/S RAINBOW FOUNDATIONS LIMITED, for the year ended 31st March 2014 and in terms of the information and explanations given to us and also on the basis of such checks as we considered appropriate we further state that:

i.

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

b) The Fixed Assets have been physically verified at the year-end by the management and in our opinion the frequency of verification is reasonable and there was no discrepancy noticed on such verification by the management.

c) During the year the company has disposed of a part of the Building. According to the information and explanations given to us, we are of the opinion that the sale of the said part of Building has not affected the going concern status of the company.

ii

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

b) The procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii.

a) According to the information and explanations given to us and in our opinion, during the year the Company has taken interest unsecured loan from two parties listed under the register maintained under section 301 of the Companies Act, 1956 and the closing balance is Rs. 1766.00Lakhs and the maximum amount outstanding was Rs. 1902.53 Lakhs. The company has not granted unsecured loans to parties listed in the register maintained under section 301 of the Companies Act, 1956.

b) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

d) There is no overdue amount of loans taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

iv. According to the information and explanations given to us and in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of flats and plots. Further, on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedure.

v.

a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. According to the information and explanations given to us and in our opinion, the Company has not accepted any deposit from the public within the meaning of the Provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under and the directions issued by the Reserve Bank of India. No order has been passed by the Company Law Board.

vii. According to the information and explanations given to us and in our opinion, the Company does not have an independent Internal Auditor. However they have an Internal Audit system commensurate with the size and nature of its business

viii. According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the company''s products.

ix.

a. According to the information and explanations given to us and in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to it and there were no undisputed amount payable in respect of Income-Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as on 31st March 2014, for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and based on the records of the Company, as at 31st March 2014, there are no dues of wealth tax/ customs duty/excise duty/cess, which have not been deposited on account of any dispute. The particulars of Income Tax and Service Tax as at 31st March 2014 which have not been deposited on account of dispute are as follows:

Name of the Nature of Dues Amount Period to which Forum where Statue under amount relates the dispute dispute is pending not yet deposited Rs.

Income Tax Income tax 2,85,218 AY 2002-03 The Hon''ble Act 1961 including Madras High interest till court, the date of Chennai assessment

Income Tax Income Tax 3,33,003 AY 2007-08 The Act 1961 Along with Commissioner Interest till of Income the date of (Appeals), assessment Chennai

Finance Act Service Tax &. 7,91,330 From November Commissioner 1994 Penalty, 2004 to of Central (Service Tax) Interest September Excise to be 2007 (Appeals), Quantified Chennai till the date of actual payment.

x. According to the information and explanations given to us and in our opinion, The Company does not have any accumulated losses as at 31st March 2014 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi. According to the information and explanations given to us and in our opinion, during the year, the Company has not defaulted in repayment of dues to any financial institution or bank and there are no debenture holders.

xii. According to the information and explanations given to us and in our opinion, the Company has not granted any loan or advance by way of pledge of shares, debentures and other securities and hence paragraph 4 (xii) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xiii. According to the information and explanations given to us and in our opinion, the Company is not a nidhi/mutual benefit fund/society, paragraph 4 (xiii) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xiv. According to the information and explanations given to us and in our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xv. According to the information and explanations given to us and in our opinion, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and in our opinion, on the basis of overall examination of the Balance Sheet of the Company, there were no funds raised on a short - term basis which have been used for long - term investment and vice versa.

xviii. According to the information and explanations given to us and in our opinion, the Company has not made any preferential allotment of shares during the year to any party and hence paragraph 4 (xviii) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xix. According to the information and explanations given to us and in our opinion, the Company has not issued any debenture during the year and hence paragraph 4 (xix) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xx. According to the information and explanations given to us and in our opinion, the Company has not raised any money during the year by way of public issue, paragraph 4 (xx) of the Companies (Auditors'' Report) Order 2003 is not applicable.

xxi. To the best of our knowledge and according to the information and explanations given to us and the records of the Company examined by us, no fraud on or by the Company was noticed or reported during the year.

PLACE: CHENNAI For JAIN BAFNA AND CO., DATED : 30th May 2014 (Chartered Accountants) (S.MUTHUKUMAR)

(Partner) Address: F-1, 58, Greams Road, Chennai 600 006 Mem No: 209636 Firm Reg No:010657 S

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Mar 31, 2011

1. We have audited the attached Balance Sheet of M/S. RAINBOW FOUNDATIONS LIMITED, CHENNAI - 600 017 as at 31st March 2011 and also the Proft and Loss account for the year ended on that date and the Cash Flow Statement for the year ended on that date, both annexed thereto. These fnancial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on their financial statements based on our audit.

2. We have 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 misstatements. 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 by the 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, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above we state 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 it appears from our examination of books.

c. The Company's Balance Sheet, the Profit & Loss Account 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 Profit & Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the accounting standards and the significant accounting policies referred to in Section 211(3C) of the Companies Act, 1956, to the extent applicable to this Company.

e. On the basis of the written representation received from the directors, as on 31/03/2011, and taken on record by the board, we report that none of the Directors is disqualified as on 31/03/2011 from being appointed as Director under clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f. 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 Notes and Schedules 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:

1. In the case of the Balance Sheet of the state of affairs of the Company as at 31st March 2011, and

2. In the case of the Proft & Loss Account of the Profit of the Company for the year ended on that date.

3. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

In the case of M/s RAINBOW FOUNDATIONS LIMITED,

In terms of the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board and on the basis of such checks as we considered appropriate we further report that:

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

b) The Fixed Assets have been physically verified at the year end by the management and in our opinion the frequency of verifcation is reasonable and there was no discrepancy noticed on such verifcation by the management.

c) Since there is no disposal of substantial part of its fxed assets during the year, paragraph 4 (i) (c) of the Companies (Auditors' Report) Order 2003 is not applicable.

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

b) The procedures of physical verifcation of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. a) According to the information and explanations given to us and in our opinion, during the year the Company has not taken unsecured loan from any party listed The company has not granted unsecured loans to parties listed in the register maintained under section 301 of the Companies Act, 1956.

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

c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv. According to the information and explanations given to us and in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of fats and plots. Further, on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedure.

v. According to the information and explanations given to us and in our opinion, there are no transactions with any of the parties that need to be entered in the register maintained under section 301 of the Companies Act 1956 (1 of 1956).

vi. According to the information and explanations given to us and in our opinion, the Company has not accepted any deposit from the public within the meaning of the Provisions of Section 58A and 58AA of the Companies Act,1956 and the rules framed there under and the directions issued by the Reserve Bank of India.

vii. According to the information and explanations given to us and in our opinion, the Company does not have an independent Internal Auditor. However they have an Internal Audit system commensurate with the size and nature of its business.

viii. According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the company's products.

ix. a. According to the information and explanations given to us and in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to it and there were no undisputed amount payable in respect of Income-Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as on 31st March 2011, for a period of more than six months from the date they became payable. b. According to the information and explanations given to us and based on the records of the Company, as at 31st March 2011, there are no dues of wealth tax/ customs duty/excise duty/cess, which have

not been deposited on account of any dispute. The particulars of Income Tax and Sales Tax as at 31st March 2011 which have not been deposited on account of dispute are as follows:

Amount under Name of the Nature of Dues dispute not yet Statue deposited Rs. Income Tax Act Income tax including 1961 interest till the 2,85,218 1961 date of assessment

Income Tax Act Income Tax Along with 2,25,291 1961 1961 Interest till the date of Assessment

Income Tax Act Income Tax Along with 4,02,650 1961 1961 Interest till the date of Assessment

Income Tax Act Income Tax Along with Rs. 3,33,003/- 1961 Interest till the date of Assessment

Name of the Period to Forum where the Statue which amount dispute is pending relates

Income Tax Act AY 2002-03 The Hon'ble Madras High court, Chennai

The Commissioner of Income Tax Act AY 2002-03 Income Tax (Appeals)

Income Tax Act AY 2006-07 The Commissioner of Income Tax (Appeals)

Income Tax Act AY 2007-08 The Commissioner of Income Tax (Appeals)

x. According to the information and explanations given to us and in our opinion, The Company does not have any accumulated losses as at 31st March 2011 and has not incurred any cash losses in the fnancial year ended on that date or in the immediately preceding financial year.

xi. According to the information and explanations given to us and in our opinion, during the year, the Company has not defaulted in repayment of dues to any financial institution or bank and there are no debenture holders.

xii. According to the information and explanations given to us and in our opinion, the Company has not granted any loan or advance by way of pledge of shares, debentures and other securities and hence paragraph 4 (xii) of the Order is not applicable

xiii. According to the information and explanations given to us and in our opinion, the Company is not a nidhi/ mutual benefit fund/society, paragraph 4 (xiii) of the Order is not applicable xiv. According to the information and explanations given to us and in our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable

xv. According to the information and explanations given to us and in our opinion, the Company has not given any guarantee for loans taken by others from bank or financial institutions. xvi. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and in our opinion, on the basis of overall examination of the Balance Sheet of the Company, there were no funds raised on a short - term basis which have been used for long – term investment and vice versa.

xviii.According to the information and explanations given to us and in our opinion, the Company has notmade any preferential allotment of shares during the year to any party and hence paragraph 4 (xviii) of the Order is not applicable

xix. According to the information and explanations given to us and in our opinion, the Company has not issued any debenture during the year and hence paragraph 4 (xix) of the Order is not applicable xx. According to the information and explanations given to us and in our opinion, the Company has not raised any money during the year by way of public issue, paragraph 4 (xx) of the Order is not applicable

xxi. To the best of our knowledge and according to the information and explanations given to us and the records of the Company examined by us, no fraud on or by the Company was noticed or reported during the year.

For JAIN BAFNA AND CO (Chartered Accountants) (NARENDER KUMAR LODHA) (Partner)

Address: F-1, 58, Greams Road Chennai 600 006 Mem No: 200/27640 Firm Reg No:010657 S PLACE: CHENNAI DATE : 5th September 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/S. RAINBOW FOUNDATIONS LIMITED, CHENNAI – 600 017 as at 31st March 2010 and also the Proft and Loss account for the year ended on that date and the Cash Flow Statement for the year ended on that date, both annexed thereto. These fnancial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on their fnancial statements based on our audit.

2. We have 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 fnancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates by the management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specifed in the paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above we state 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 it appears from our examination of books.

c. The Companys Balance Sheet, the Proft & Loss Account 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 Proft & Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the accounting standards and the signifcant accounting policies referred to in Section 211(3C) of the Companies Act, 1956, to the extent applicable to this Company.

e. On the basis of the written representation received from the directors, as on 31/03/2010, and taken on record by the board, we report that none of the Directors is disqualifed as on 31/03/2010 from being appointed as Director under clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f. 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 Notes and Schedules 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:

1. In the case of the Balance Sheet of the state of affairs of the Company as at 31st March 2010, and

2. In the case of the Proft & Loss Account of the Proft of the Company for the year ended on that date.

3. In the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

In the case of M/s RAINBOW FOUNDATIONS LIMITED,

In terms of the Companies (Auditors Report) Order, 2003 issued by the Company Law Board and on the basis of such checks as we considered appropriate we further report that:

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

b) The Fixed Assets have been physically verifed at the year end by the management and in our opinion the frequency of verifcation is reasonable and there was no discrepancy noticed on such verifcation by the management.

c) Since there is no disposal of substantial part of its fxed assets during the year, paragraph 4 (i) (c) of the Companies (Auditors Report) Order 2003 is not applicable.

ii. According to the information and explanations given to us, in respect of development of fats, since the construction is on contract basis the need for maintaining the stock records for the same does not arise and hence paragraph 4 (ii) of the Companies (Auditors Report) Order 2003 is not applicable.

iii. a) According to the information and explanations given to us and in our opinion, the Company has taken unsecured loan from one party listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year end balance of such loan aggregates to Rs.35,00,000/- and Rs.21,00,000/- respectively. The company has not granted unsecured loans to parties listed in the register maintained under section 301 of the Companies Act, 1956.

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

c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv. According to the information and explanations given to us and in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of fxed assets and for the sale of fats and plots. Further, on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedure.

v. According to the information and explanations given to us and in our opinion, there are no transactions with any of the parties that need to be entered in the register maintained under section 301 of the Companies Act 1956 (1 of 1956) .

vi. According to the information and explanations given to us and in our opinion, the Company has not accepted any deposit from the public within the meaning of the Provisions of Section 58A and 58AA of the Companies Act,1956 and the rules framed there under and the directions issued by the Reserve Bank of India.

vii. According to the information and explanations given to us and in our opinion, the Company does not have an independent Internal Auditor. However they have an Internal Audit system commensurate with the size and nature of its business.

viii. According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the companys products.

ix. a. According to the information and explanations given to us and in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to it and there were no undisputed amount payable in respect of Income-Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as on 31st March 2010, for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and based on the records of the Company, as at 31st March 2010, there are no dues of wealth tax/ customs duty/excise duty/cess, which have not been deposited on account of any dispute. The particulars of Income Tax and Sales Tax as at 31st March 2010 which have not been deposited on account of dispute are as follows:

Amount under

Name of the

Nature of Dues dispute not yet

Statue deposited Rs.

Income Tax Act Income tax including interest

2,85,218 1961 till the date of assessment

Income Tax Act Income Tax Along with Interest

2,25,291 1961 till the date of Assessment

Income Tax Act Income Tax Along with Interest

4,02,650 1961 till the date of Assessment

Income Tax Act Income Tax Along with Interest

3,33,003 1961 till the date of Assessment

Name of the Period to

Statue Forum where the which amount

dispute is pending

relates

Income Tax Act The Honble Madras 1961 AY 2002-03 High court, Chennai

Income Tax Act The Commissioner of 1961 AY 2002-03 Income Tax (Appeals)

Income Tax Act The Commissioner of 1961 AY 2006-07 Income Tax (Appeals)

Income Tax Act The Commissioner of 1961 AY 2007-08 Income Tax (Appeals)

x. The Company does not have any accumulated losses as at 31st March 2010 and has not incurred any cash losses in the fnancial year ended on that date or in the immediately preceding fnancial year.

xi. During the year, the Company has not defaulted in repayment of dues to any fnancial institution or bank and there are no debenture holders.

xii. According to the information and explanations given to us and in our opinion, the Company has not granted any loan or advance by way of pledge of shares, debentures and other securities and hence paragraph 4 (xii) of the Order is not applicable

xiii. As the Company is not a nidhi/mutual beneft fund/society, paragraph 4 (xiii) of the Order is not applicable xiv. Since the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4

(xiv) of the Order is not applicable

xv. According to the information and explanations given to us and in our opinion, the Company has not given any guarantee for loans taken by others from bank or fnancial institutions.

xvi. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purpose for which they were raised.

xvii. On the basis of overall examination of the Balance Sheet of the Company, there were no funds raised on a short - term basis which have been used for long – term investment and vice versa. xviii. The Company has not made any preferential allotment of shares during the year to any party and hence paragraph 4

(xviii) of the Order is not applicable

xix. The Company has not issued any debenture during the year and hence paragraph 4 (xix) of the Order is not applicable

xx. Since the Company has not raised any money during the year by way of public issue, paragraph 4 (xx) of the Order is not applicable

xxi. To the best of our knowledge and according to the information and explanations given to us and the records of the Company examined by us, no fraud on or by the Company was noticed or reported during the year.

For JAIN BAFNA AND CO

(Chartered Accountants)

(NARENDER KUMAR LODHA)

(Partner) Address: F-1, 58, Greams Road, Chennai 600 006

PLACE: CHENNAI Mem No: 200/27640

DATE : 4th September 2010 Firm Reg No:010657 S