Auditor Report of Satchmo Holdings Ltd.

Mar 31, 2025

SATCHMO HOLDINGS LIMITED Report on the audit of the Standalone Financial Results Adverse Opinion

We have audited the Standalone financial statements of SATCHMO HOLDINGS LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Adverse Opinion paragraph below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and due to the significance of matter described in the Basis for Adverse Opinion paragraph given below, the accompanying standalone financial statements do not give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and its profit, changes in equity and its cash flows for the year ended on that date.

Basis for Adverse Opinion

The Company has incurred losses over the years resulting in negative net worth and negative working capital. The default in payment of dues to banks and financial institutions and creditors etc. are the identified events that, individually or collectively, may cast significant doubt on the Company''s ability to continue as a going concern. The Statement does not adequately disclose this fact.

The Company has stepped back / separated from certain projects under development and has transferred those projects to other developers/ landowners through the Memorandum of Understanding (MOU) or Business Transfer Agreement (BTA). Although these transactions have reduced the liability of the Company to banks and financial institutions, the ability of the Company to continue as a going concern continues to remain uncertain in view of the negative net worth.

As the Company has not recognized this fact and has prepared the standalone financial statements on a going concern assumption basis without carrying out any adjustments, in our opinion, the Statement may not give a true and fair view. (Refer to Note 44 of the Standalone financial statements).

Other matters that require a modification to the opinion;

1) Year-end balance confirmation in respect of trade receivables, trade payables, vendor advances, advances from customers and other advances have not been provided for our verification and record for all the parties. In the absence of such confirmation, we are unable to ascertain any consequential effect of the above to the financial results for the year. As explained, necessary mails have been sent to some of the parties for confirmation. However, no replies have been received in this regard except in few cases.

2) As per the records of the Company and information and explanations provided to us, the Company has been irregular in depositing the undisputed statutory dues, including provident fund, income-tax, value-added tax, Goods and Services tax, cess, etc. The Company is yet to deposit to the Income Tax Department the tax deducted from vendors amounting Rs. 128 lakhs and is an assessee in default by virtue of Income Tax Act.

The Company also has a receivable balance of Rs. 678.39 Lakh and a payable balance of Rs. 201.42 Lakh (excluding interest and disputed VAT liability under appeal) from/ to various government authorities. Due to such statutory non-compliance, we are unable to comment on the actual recoverability and payment of the dues against such balances.

3) Necessary documents with respect to certain advance payments to vendors and receipts from vendors/customers and movement in balance during the period were not made available for our verification which include a balance payable to a former subsidiary

amounting Rs 624 lakhs out of which Rs 40 lakhs was received during the year the purpose and details of which were not made available to us by the management (Refer Note No. 29 b. and 29.c. of the consolidated financial statements). Consequently, we are unable to comment on such transactions and balances.

4) Inventories amounting to Rs 1,441 Lakh (Net of "Payable to land owner for land under JDA") has not been tested impairment for ascertaining the realizable value as on 31st March, 2025. To the extent of any possible diminution of value not accounted for, the standalone financial statements may not give a true and fair view as per the requirement of Ind AS 2 (Refer to Note 7 of the Standalone financial statements).

5) The Company had written off old debit balances and also written back old payables in the year ended 31^st March, 2025 amounting Rs 129 lakhs and Rs 3342 lakhs respectively as the same are considered unrealizable and without any claim for payment over a considerable period of time. Supporting documents were mostly not made available to us as audit evidence for our verification and record in regard to such write offs/write backs as mentioned. (Refer to Note 27 of the Standalone Financial Statements)

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion.

Emphasis of Matter

We draw attention to the facts mentioned below:

a) The Company had entered into One-time Settlements (OTS) with JCF ARC ( J C Flowers Asset Reconstruction Pvt Ltd ) (assigned by YES Bank) and HDFC Limited vide Letters dated 14^th April, 2023 and 6^th June, 2023 respectively as per which, the Company had to repay the amounts mentioned in the settlement letters in a time-bound manner. In the event the Company defaulted on the mentioned timelines or any other payment terms, the said settlement approvals would stand revoked. However, the Company had defaulted on the timelines of the payment under OTS with respect to both the lenders. Subsequently, the Company had received a notice on 23^rd November, 2023 from JCF ARC revoking the above-mentioned OTS and was called upon to repay outstanding dues along with applicable interest charges, costs, etc. with effect from the date of notice aforementioned (Refer to Note 13(i) and (ii) of the Standalone financial statements).

On this basis, the Company has disclosed Rs. 8,507 Lakh under Current Borrowing (being the OTS outstanding balance of JCF ARC and HDFC) and Rs. 48,233 Lakh under Disputed Liability (being the difference between original loan and interest liability and OTS outstanding balance) as on 31st March, 2025. (Refer to Note 14(i) of the Standalone financial statements).

The Company is in communication with the lenders for seeking an extension for the balance payment therefore has not booked any further liability on the basis of such demand from JCF ARC as informed by the management.

No information / document is made available regarding the revocation in case of HDFC Limited.

The Company had, on 22^nd July, 2024, informed SEBI as per Regulation 30 of SEBI (LODR) Regulations, 2015 about the institution of proceeding under section 7 of the Insolvency and Bankruptcy Code, 2016 by JC Flower Asset Reconstruction Company (Financial Creditor) against the Company (Corporate Debtor) before the National Company Law Tribunal regarding their outstanding due against the term loan amounting Rs.38,595 Lakhs.

Based on the above, the complaint was registered with NCLT on 12^th September 2024 and the Tribunal had issued an interim Order on 1^st October, 2024 under section 7 of the Insolvency and Bankruptcy Code, 2016 for serving notice to the Respondent Company and the responsible person of Satchmo Holdings Limited which may have an impact on the going concern status of the Company in the foreseeable future. The Company was heard by the NCLT and the Order was delivered on 27^th November, 2024 where the Respondent ( the Company) was granted three weeks'' time to file objection and one week time granted to Petitioner ( J.C.Flowers Asset Reconstruction Pvt Ltd ) to file rejoinder. As per the Order delivered the matter was listed on 07^th January 2025

and presently, the subject matter stands listed for hearing on June 6, 2025 after adjournments on 14^th April, 2025 and 21^st April, 2025. Further information on the status of this NCLT matter was not made available.

b) The Company had, during the current financial year, signed a share purchase agreement for divesting its equity investment in Northroof Ventures Private Limited and full sale consideration has already been received in the first quarter of the financial year. However, the other conditions as per the agreement are still in the process of execution as the shares are held as lien by JC Flower Asset Reconstruction Company, a creditor. Once all the liabilities are settled, we are informed that share transfer execution shall be completed.

As of the reporting date, the balance receivable from Northroof Ventures Private Limited is Rs. 1,033 Lakhs, which has been impaired due to the negative net worth of Northroof Ventures Private Limited. (Refer to Note 10(ii) of the Standalone financial statements).

c) During the financial year, the Company had entered into a memorandum of understanding with a new developer on 28^th March, 2025 for transferring its development rights, interest and entitlements relating to projects Plaza ( situated at Ali Asker Road measuring 106513 square feet ) and Soho ( situated at Commissariat Road, near Bangalore Centre measuring 89300 square feet) and advances of Rs 300 lakhs and Rs 50 lakhs was received on 29^th March, 2025 towards the said projects Plaza and Soho respectively from the new developer. (Refer to Note 4.2 of the Standalone financial statements)

In this context it is pertinent to mention that the Company is yet to decide on the JDA Rights acquired in 2022-23 in the Project at Commissariat Road in exchange for advance receivable along with its subsidiaries for an amount of Rs. 10,311 Lakh. This Right has been classified as a Right of Use asset at the acquisition cost, and based on the management estimate, the carrying cost is below the net realizable value. The Company is yet to ascertain the period for necessary amortization. (Refer to Note 4.1. i) and ii) of the Standalone financial statements)

d) The Company has not renewed the registration of project "Rio" under the provisions of Real Estate (Regulation and Development) Act, 2016 since 31st March 2019, resulting in non-compliance under the relevant rules and regulations of the Real Estate (Regulation and Development) Act, 2016.

e) According to the information and explanation provided to us, Gratuity plan of the Company is unfunded as at 31st March, 2025 and the Company has made provision for the entire Gratuity Liability. Employee Gratuity Liability is being met as and when they fall due. As no assets are maintained by the Company, there is a liquidity risk that the Company may run out of cash resources which may further affect the financial position of the Company. (Refer to Note 32 of the Standalone financial statements)

f) Revenue relating to invoices raised on maintenance charges for a project aggregating Rs 1932 lakhs was not recognised due to uncertainty in collection of the expected consideration and ongoing reconciliation of the balances with the respective customers. (Refer to Note 17(ii) of the Standalone financial statements)

g) Certain Managerial personnel duly appointed by members have intimated the Board that they would be foregoing their remuneration from their respective date of appointment in order to comply with the provisions of section 197(1) of the Companies Act, 2013 since lender''s approval prior to such appointment was not obtained. Accordingly, no managerial remuneration has been accounted for in the books of account in respect of those personnel. The board has noted the "Letter of Undertaking" received from the personnel for non-acceptance of salary and other remuneration.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Adverse Opinion section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	Response to Key Audit Matter
Institution of proceeding under section 7 of the Insolvency and Bankruptcy Code, 2016 by JC Flower Asset Reconstruction Company (Financial Creditor) The Company had entered into One-time Settlements (OTS) with JCF ARC (assigned by YES Bank) and HDFC Limited vide Letters dated 14^th April, 2023 and 6^th June, 2023 respectively as per which, the Company had to repay the amounts mentioned in the settlement letters in a time-bound manner. The Company had defaulted on the mentioned timelines or any other payment terms, the said settlement approvals stood revoked by way of a notice on 23^rd November, 2023 from JCF ARC and the Company was called upon to repay outstanding dues along with applicable interest charges, costs, etc. with effect from the date of notice aforementioned, as elaborated in clause (a) of the Emphasis of Matter paragraph .	The auditors have been seeking information from the Management on the status of the proceeding and the complaint with NCLT. The Company had shared the status of the dates of hearing before NCLT as and when adjourned. We had requested for the plan of action for settlement of the dues and were provided the copies of the MOUs entered with a new developer on 28^th March, 2025 for transferring its development rights, interest and entitlements relating to projects Plaza and Soho. The management had informed that part of the JCF dues would be settled through consideration from the transfer and from realization out of transfer from one of their existing projects. The Auditors were informed of arrangement wherein the JCF matter with NCLT will be settled at the amount agreed on OTS ( which stands revoked presently ) which is lower than Rs 386 crores outstanding as recorded with NCLT. However document substantiating the aforesaid communication was not made available raising doubts about the course of action to be adopted for repayment of dues and of the continuity of the entity in the foreseeable future.
Maintenance income pending reconciliation included under Other Liability (Note 17)	Audit Procedures adopted
Contract Liability of Rs 1928 lakhs under ''Other Liability'' in Note 17 to the Standalone Financials has not been recognised as revenue in the books for which reconciliation is pending. The related debit i.e., trade receivable in Note 8 shows a balance of Rs 1871 lakhs as considered good and represents the amount of consideration due.	The auditors had communicated this matter with the Head of Finance in charge of governance who had explained that the amount is in regard to maintenance charges billed on customers relating to one project and is pending reconciliation.

Responsibilities of the Management and Those Charged with Governance for the Statements

These standalone financial results have been prepared on the basis of the standalone financial statements. The Company''s Board of Directors are responsible for the preparation of these financial results that give a true and fair view of the net profit for the year ended March 31, 2025 and other comprehensive income and other financial information of the Company in accordance with the recognition and measurement principles laid down in Indian Accounting Standard prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial results, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.

â¢ Conclude on the appropriateness of the Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report.

â¢ Evaluate the overall presentation, structure and content of the standalone financial results, including the disclosures, and whether the standalone financial results represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial results may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial results.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Other Matters

a) During the previous financial year, the GST department had reinstated the GST registration vide form Reg 22 dated May 12, 2023. Pursuant to this, the Company has ascertained certain GST liabilities for previous years and deposited to the department. However, the Company has received an order subsequently for cancellation of GST registration on account of failing to furnish the returns for prescribed periods.

On verification of documents and according to the explanation provided to us, the Company is raising GST invoices in order to deposit GST liability to the department as and when GST registration will stand valid.

The Company had begun depositing amounts towards GST dues on announcement of Amnesty Scheme on 16th January, 2025 from the Department of Commercial Taxes, Government of Karnataka regarding waiver of interest and penalty or both relating to demands under Section 73 of the CGST Act pertaining to Financial Years 2017-18, 2018-19 and 2019-20.

b) The Company earlier on February 23, 2022 had amended the main Objects of the Company''s Memorandum of Association and post amendment of the Object Clause, the Company is to predominantly focus on trading in land and plotted development, Service business comprising wide areas of facilities / manpower / catering / restaurants activities, related Internet Technology Services and long term investment and trading in equities. During the last quarter on January 28, 2025 a new Company, Satchmo Foods Private Limited was incorporated as a wholly owned subsidiary of the Company to deal in the business of manufacturing, supply, distribution of food products and services.

c) We have been informed by the management that the Company has advanced monies to a related party as per a special resolution taken by the Company in terms of the relevant provisions of the Companies Act, 2013 and necessary disclosure has been given in the financial statements. (Refer to Note 29 b of the Standalone financial statements)

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of

sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure - A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matters paragraphs, 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) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matters paragraphs, 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 including other comprehensive income, the statement of changes in equity and statement of cash flows dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matter paragraphs, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

e) The matters stated in the Basis for Adverse Opinion section above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on 31st March, 2025 taken on record by the Board of Directors, none of the directors is disqualified from being appointed as director in terms of Section 164(2) of the ''Act'' as on 31st March, 2025.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure -B. Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting for the reasons stated therein.

h) In terms of the provisions of section 197(16) of the Companies Act, 2013 and according to the information, representation and explanation given to us by the management, no managerial remuneration has been paid/provided during the year apart from remuneration paid to one executive director in his operational capacity working also as Chief Financial Officer of the Company.

i) 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) Amendment Rules, 2021, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer note no. 34;

ii. According to the information and explanation given by the management, 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.

iv. (a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. No dividend is declared or paid by the Company during the year and hence, compliance with section 123 of the Companies Act, 2013 is not applicable to the Company.

vi. Based on our examination which included test checks, the Company has changed the accounting software ( from SAP to Tally Prime Gold ) from 1^st April 2024 for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable to the Company with effect from April 1, 2023, and reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirement for record retention is in place (both for the previous and existing Accounting Software) for the financial year ended March 31, 2025.

For KAMG & ASSOCIATE

Chartered Accountants (Firm''s Registration No. 311027E)

(Amitabha Niyogi) Partner

Membership No 056720 UDIN: 25056720BMJTAO8768

Place : Bengaluru Date : 30.04.2025

Mar 31, 2024

Satchmo Holdings Limited (Formerly known as NEL Holdings South Limited)

Report on the Audit of the Standalone Financial Statements Adverse

Opinion

We have audited the standalone financial statements of Satchmo Holdings Limited (formerly known as NEL Holdings South Limited and hereinafter referred as "the Company"), which comprise the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statement, including a summary of material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Adverse Opinion paragraph below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and due to the significance of matter described in the Basis for Adverse Opinion paragraph given below, the accompanying standalone financial statements do not give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its profit, changes in equity and its cash flows for the year ended on that date.

Basis for Adverse Opinion

The Company has stepped back / separated from certain projects under development and has transferred those projects to other developers/ landowners through the Memorandum of Understanding (MOU) or Business Transfer Agreement (BTA). Although these transactions have reduced the liability of the Company to banks and financial institutions, the ability of the Company to continue as a going concern remains uncertain in view of the negative net worth.

As the Company has not recognized this fact and has prepared the standalone financial statements on a going concern assumption basis without carrying out any adjustments, in our opinion, the standalone financial statements may not give a true and fair view. (Refer to note no. 44 of the standalone financial statements)

Other matters that require a modification to the opinion:

1) Year-end balance confirmation in respect of trade receivables, trade payables, vendor advances, advances from customers and other advances have not been provided for our verification and record for all the parties. In the absence of such confirmation, we are unable to ascertain any consequential effect of the above to the standalone financial statements for the year. As explained, necessary mails have been sent to some of the parties for confirmation. However, no replies have been received in this regard except in few cases.

The Company also has a receivable balance of Rs. 768 Lakh and a payable balance of Rs. 177 Lakh (excluding interest and disputed VAT liability under appeal) from/ to various government authorities. Due to such statutory non-compliance, we are unable to comment on the actual recoverability and payment of the dues against such balances.

3) Necessary documents for imprest transactions taken place during the financial year 2023-24 are not made available for our verification. In the absence of adequate audit evidence, we are unable to ascertain any consequential effect of the above to the financial statements for the year.

4) Inventories amounting to Rs 1,450 Lakh (Net of "Payable to land owner for land under JDA") has not been tested impairment for ascertaining the realizable value as on 31st March, 2024. To the extent of any possible diminution of value not accounted for, the standalone financial statement may not give a true and fair view as per the requirement of Ind AS 2. (Refer to note no. 7 of standalone financial statements)

5) The Company has entered into One-time Settlements (OTS) with JCF ARC (assigned by YES Bank) and HDFC Limited as per which, the Company has to repay the amounts mentioned in the settlement letters in a time-bound manner. In the event the Company defaults on the mentioned timelines or any other payment terms, the said settlement approvals shall stand revoked.

However, the Company has defaulted on the timelines of the payment under OTS with respect to both the lenders. Subsequently, the Company has received a notice from JCF ARC revoking the above-mentioned OTS and called upon to repay outstanding dues along with applicable interest charges, costs, etc. with immediate effect. (Refer to note no. 13 (i) and (ii) and note no. 14(i) of the standalone financial statements)

As explained, the Company is in communication with the lenders for seeking an extension for the balance payment therefore has not booked any further liability on the basis of such demand from JCF ARC.

No information / document is made available for subsequent correspondence after the revocation in case of HDFC Limited.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in Auditor''s Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our Adverse opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to the fact that:

a) During the year, the Company has divested its interest in its Wholly Owned Subsidiary - LOB Facilities Management Private Limited (LOB). Pursuant to the Company''s object clause to carry out the business of all types of facility management services, including all kinds and types of security services, and on approval from shareholders, the Company has taken over two projects, maintenance charges of which were earlier billed by LOB, without any consideration. (Refer to note no. 6(v) and 20 of the standalone financial statements)

During the year, on account of divestment of subsidiary LOB, the employees of LOB has been taken over by the Company along with all pending balances in respect of these employees.

As of the reporting date, the balance receivable from LOB is Rs. 524 Lakh, which has been impaired due to the negative net worth of LOB.

b) The opening balance of advances given to one of its subsidiaries, Northroof Ventures Private Limited, amounted to Rs. 229 Lakh. Further, during the year, the Company has disbursed (net of realization) fresh advances amounting to Rs. 816 Lakh to

meet the working capital requirements. This amount has been fully impaired due to the negative net worth of this subsidiary. (Refer to note no. 10(ii) of the standalone financial statements)

c) During the previous financial year, the Company had impaired the entire amount of CWIP in the second quarter, by further provision of Rs. 8,835 Lakh towards the development cost of the projects namely Plaza, Soho and Chelsea on the basis of expected unrealizable amount from the landowner on final settlement of their dues on exit and cancellation of the JDA agreement or on handover to incoming developer. (Refer to note no. 4.2 (i) of the standalone financial statements)

Towards the end of the previous financial year, the Company transferred the Chelsea project to the landowner via a memorandum of settlement. Accordingly, the provision for impairment accounted for earlier in the books of account amounting to Rs. 3,177 Lakh with respect to the Chelsea project had been written back. (Refer to note no. 4.2 (ii) of the standalone financial statements)

However, the cancellation agreement and release of charge etc. with respect to Plaza and Soho are yet to be executed by the Company. Further, the necessary valuation reports in respect of these projects were not provided to us.

e) According to the information and explanation provided to us, Gratuity plan of the Company is unfunded as at 31st March, 2024 and the Company has made provision for the entire Gratuity Liability. Employee Gratuity Liability is being met as and when they fall due. As no assets are maintained by the Company, there is a liquidity risk that the Company may run out of cash resources which may further affect the financial position of the Company. (Refer to note no. 32 of standalone financial statements)

f) Certain Managerial personnel duly appointed by members have intimated the Board that they would be foregoing their remuneration from their respective date of appointment in order to comply with the provisions of section 197(1) of the Companies Act, 2013 since lender''s approval prior to such appointment was not obtained. Accordingly, no managerial remuneration has been accounted for in the books of account in respect of those personnel. The board has noted the "Letter of Undertaking" received from the personnel for non-acceptance of salary and other remuneration.

g) The Company has written off/ written back several outstanding dues, including employee related liabilities of Rs. 46 Lakh, no longer required to be paid. As explained, such outstanding dues were lying in the books since long, which is ratified by the Board. (Refer to note no. 21 and 26 of the standalone financial statements)

h) Deferred tax has neither been ascertained nor accounted for due to the uncertainty of the taxable profit as estimated by the Management of the Company. (Refer to Note no. 16 of the standalone financial statements)

i) Security Deposit liability amounting to Rs. 17.50 Lakh against lease agreement is lying in the books. However, the Company has not discounted the same as per requirement of Ind AS 109 since the matter is sub-judice.

j) During the previous financial year, the Company had acquired JDA Rights in the Project at Commissariat Road in exchange for advance receivable along with its subsidiaries for an amount of Rs. 10,311 Lakh.

This Right has been classified as a Right of Use asset at the acquisition cost, and based on the management estimate, the carrying cost is below the net realizable value. The Company has yet to ascertain the period for necessary amortization. Refer to note no. 4.1 (i) and (ii) of the standalone financial statements)

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

Key Audit Matters

to the matters described in the Basis for Adverse Opinion section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	Response to Key Audit Matter
1. Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind-AS 115 "Revenue from contracts with Customers".	Principal Audit Procedure: Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows:
The revenue recognition by the Company in a particular contract is dependent on certain key judgments relating to identification of distinct performance obligations, determination of transaction price of identified performance obligation and disclosures including presentations of balances in the standalone financial statements. (Refer note 20 to the standalone financial statements.)	a) We have assessed the application of the provisions of the Ind AS 115 in respect of the Company''s revenue recognition and appropriateness of the estimated adjustments in the process. b) Selected a sample of existing continuing contracts and new contracts and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price.
	c) Tested the relevant information, accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
	d) Performed analytical procedures and test of details for reasonableness and other related material items.
	Our procedures did not reveal any major discrepancy

Information Other than the Financial Statements and Auditors'' Report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the draft Directors'' Report including annexures to Directors'' Report and other reports included in the Annual report, but does not include the Standalone Financial Statements and our auditors'' report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above, and in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the full Annual report which is expected to be made available to us subsequently, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of the Management and Those Charged with Governance for the Standalone 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 standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. 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 the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue a s a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our au ditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

a) During the previous financial year, the Company entered into a Memorandum of Understanding (MOU) with the Landowner and another Developer "Sattva Real Estate Private Limited" to exit the project "British Columbia" on repayment of Rs. 600 Lakh to HDFC Bank and settlement of customer dues by the Landowner. Pursuant to this, HDFC Limited has released the charge on the said project and all customer refunds in relation to this project were made by the end of the year. Accordingly, the transfer of the project has been recorded in the Books of accounts as given below: (Refer to note no. 43 of the standalone financial statements)

Particulars	Amount (Rs. In Lakh)	Note No. Reference
Sales:
Repayment of Term Loan by Landowner	600	13 - Borrowings
Amount refunded to customers by the Landowner	384	16 - Other Current Liabilities
Revenue on sale of projects (A)	984	19 - Revenue from operations
Cost of Sales:
Assets transferred
Refundable deposit towards joint development agreement	450	10 - Other Assets
Advance against Property	195	10 - Other Assets
Properties under development	3,326	7 - Inventories
Net Cost of Sales (B)	3,971	21 - Land and construction cost
Net Loss (A) - (B)	(2,987)

b) During the current financial year, the GST department has reinstated the GST registration vide form Reg 22 dated May 12, 2023. Pursuant to this, the Company has ascertained certain GST liabilities for previous years and deposited to the department.

However, the Company has received an order subsequently for cancellation of GST registration on account of failing to furnish the returns for prescribed periods.

c) As reported earlier, the Company in its earlier Annual General Meeting had declared its intention to enter into new areas of business. Accordingly, the Company had notified the SEBI on its revised main object for future businesses.

d) Necessary prior approval / omnibus approval from the Audit Committee as per requirement of Section 177 of the Companies Act, 2013 are not made available in case of advance against property amounting to Rs. 586 Lakh received from one related party viz. NIRPL Ventures Pvt Ltd. However, the same was subsequently ratified by the Audit Committee and Board.

Our report is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure - A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of

Matter and Other Matters paragraphs, 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.

d) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of

Matter and Other Matter paragraphs, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

e) The matters stated in the Basis for Adverse Opinion section above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on 31^st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified from being appointed as director in terms of Section 164(2) of the ''Act'' as on 31^stMarch, 2024.

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer note no. 34;

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

v. No dividend is declared or paid by the Company during the year and hence, compliance with section 123 of the Companies Act, 2013 is not applicable to the Company.

vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirement for record retention is not applicable for the financial year ended March 31, 2024.

For RAY & RAY

Chartered Accountants (Firm''s Registration No. 301072E)

(Shipra Gupta)

Place: Bengaluru Partner

Date: 10.05.2024 Membership No 436857

UDIN: 24436857BKFOHA2594

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Nitesh Estates Limited (''the Company''), which comprise the Balance Sheet as at 31^st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement, the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").

Management''s Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 Ind AS 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of the affairs of the Company as at 31^st March, 2018 and its loss, including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matter

1. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date of opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by us and on which we expressed an unmodified opinions in the reports for the year ended March 31, 2017 and March 31, 2016 dated 27^thMay, 2017and 28^th May, 2016 respectively, as adjusted for the differences in accounting principles adopted by the Company on transition to the Ind AS which have been audited by us.

2. Refer Note no 47 of the Ind AS financial statements wherein it is noted that the management is in the process of refunding the advance booking received before applicability of RERA from the potential customers due to non-registration of projects under RERA and is in the process of complying with the pending requirements of RERA Act.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A", 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 except information related to deferred tax assets/ liabilities as stated in Note no 20(a), 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B" and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014,as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations against the Company on its financial position in its standalone Ind AS financial statements in respect of claims and demands on the Company which are being contested as mentioned in Note 34.

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"A" TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure A referred to in our report to the members of NITESH ESTATES LIMITED under the heading ''Report on Other Legal and Regulatory Requirements of our report at even date.

We report that:

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

b) According to the information and explanation given to us, some of the fixed assets have been physically verified by the Management during the year in a phased program and no material discrepancies were noticed on such verification. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and the nature of its assets.

c) According to information and explanation given to us no immovable properties are held in the name of the company.

ii. The Company is engaged in the business of real estate development and related services and holds inventories in the form of land, developed and under development of properties. In our opinion and according to the information and explanations given to us, having regard to the nature of inventories, the procedures and frequency of the physical verification by way of title deeds, site visits by the management and certification of work completion are reasonable and adequate having regard to the size of the Company and the nature of its business.

iii. According to the information and explanation given to us, the Company has granted unsecured loans to companies, firms, or other parties as listed in the register maintained under Section 189 of the Companies Act, 2013 (Refer to Note 30 to the financial statements).In our opinion and according to the information and explanations given to us, the terms and conditions of the loans are not prejudicial to the Company''s interest.

iv. According to the information and explanation given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to loans and investments made.

v. The Company has not accepted any deposits during the year and so the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 are not applicable.

vi. The Central Government has prescribed for the maintenance of the cost records under Section 148(1) of the Companies Act, 2013 in respect of the products of the Company. Accordingly, the Management has appointed a Cost Auditor whose report is still awaited and could not be produced to us.

vii. (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess, Custom Duty, Goods and Services Tax (GST) and other statutory dues applicable to it.

There are no undisputed amounts payables in respect of provident fund, Employees'' State Insurance, Sales Tax, Service Tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities except GST of Rs. 6 Lakhs and Income Tax of Rs 488 Lakhs [Refer Note no 34 (a) (ii)] as at 31^st March, 2018 for a period more than six months from the date they became due.

(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited by the company as on 31^st March, 2018.

Name of Statute	Nature of Dues	Period to which the amount relates	Amount (Rs. in Lakhs)	Forum where Disputes is Pending
Income Tax Act, 1961	Income tax	AY 2009-10	148	CIT- Appeal
		AY 2011-12	66	CIT-Appeal
		AY 2011-12	9	CIT- Appeal
KAVAT Act	VAT	AY 2009-10	247	JCCT - Appeal
		AY 2011-12	421	DCCT-Audit
		AY 2012-13	1,655	DCCT-Audit
		AY 2013-14	118	DCCT-Audit

Refer Note no 34 (a) (ii) to the notes to the financial statements for interest on income tax.

viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government. However, the Company has defaulted in repayment of principal and interest to debenture holders for an amount of Rs. 8311 Lakhs [Refer note 17(i)]. The Company has not taken any loans or borrowings from the government.

ix. The company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised.

x. According to the information and explanations given to us ,no fraud on or by the company has been noticed or reported during the year. Accordingly, the provisions of clause 3(x) of the said order are not applicable.

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us by the management all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provision of clause 3(xiv) of the Order is not applicable.

xv. The company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provision of clause 3(xv) of the Order is not applicable.

xvi. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.Accordingly, the provision of clause 3(xvi) of the Order is not applicable.

''Annexure B'' to the Independent Auditor''s Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NITESH ESTATES LIMITED ("the Company") as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls.

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.

Inherent Limitations Of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company generally has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India .

For RAY& RAY

Chartered Accountants

Firm''s Registration No.301072E

Mrinal Kanti Banerjee

Partner

Membership No 051472

Place: Bangalore

Date: 30^th May, 2018

Mar 31, 2016

The Members of

Nitesh Estates Limited Report on the Standalone Financial Statements

We have audited the accompanying financial statements of NITESH ESTATES LIMITED ("the Company") which comprise the Balance Sheet as at 31^st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 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 application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of 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 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, 2016, and its profit / loss 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 "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the said 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 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 in this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone 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 31st March, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2016 from being appointed as director in terms of Section 164(2) of the Act.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 25 to the financial statements;

II. The Company has no material foreseeable losses, if any, on long-term contracts including derivative contracts .

III. The Company is not required to transfer any amount to the Investor Education and Protection Fund.

ANNEXURE A TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of NITESH ESTATES LIMITED for the year ended March 31, 2016

We report that:

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

(b) According to the information and explanation given to us, most of the fixed assets have been physically verified by the Management during the year and no material discrepancies were noted on such verification. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and the nature of its assets.

(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, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits during the year and so the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 are not applicable.

(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) (a) According to the information and explanations given to us, the company is generally regular in depositing undisputed

statutory dues including Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues to the appropriate authorities.

There are no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-Tax, Sales-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, 2016 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, 2016 on account of disputes are given below:

Name of the statute	Nature of the dues	Amount (Rs. in lakhs)	Period to which amount Pertains	Forum where Disputes is Pending
Income Tax Act	Income Tax	22.50	AY-2011-2012	Asst Commissioner of Income Tax Appeals

(viii) The company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

(ix) The company has not raised any money raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised.

(x) No fraud on or by the company has been noticed or reported during the year;

(xi) No managerial remuneration has been paid or provided during the year.

(xii) Company is not a nidhi company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

(xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;

(xv) The company has not entered into any non-cash transactions with directors or persons connected with him;

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to the Auditors'' Report- Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NITESH ESTATES LIMITED ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India .

For and on behalf of RAY & RAY

Chartered Accountants

Firm Registration No. 301072E

Mrinal Kanti Bandopadhyay

Partner

Membership No. 051472

Bangalore

28^th May, 2016

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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