Auditor Report of Satra Properties (India) Ltd.

Mar 31, 2016

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Satra Properties (India) Limited (“the Company”), which comprise the Balance Sheet as at March 31, 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 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 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 Companies Act, 2013, 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provision 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 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company 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 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

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

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

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 sub-section (11) of section 143 of the Act, we give in the Annexure “A” statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Flow Statement dealt with by 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 March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; 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, in our opinion and to the best of our information and according to the explanation given to us:

i. The company has disclosed the impact of pending litigations on its financial position in its standalone financial statements —Refer Note 28 of the financial statements as at March 31, 2016.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at March 31, 2016.

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

(Referred to in Paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date)

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 explanations given to us, the Fixed Assets have been physically verified by the management during the year, no material discrepancies were noticed on such verification with book records. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.

c. According to the information and explanations given to us and on the basis of our examination of the records, the company does not have any immovable property and hence this paragraph is not applicable to the company.

ii. The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. No material discrepancies have been noticed on physical verification between physical stock and book records.

iii. In respect of loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered under register maintained under section 189 of the Companies Act, 2013;

a. In our opinion, the terms and conditions on which the loans have been granted are not, prima facie, prejudicial to the interest of the company;

b. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, this paragraph is not applicable to the Company in respect of repayment of the principal amount.

c. There are no overdue amounts in respect of loans granted to the parties covered under register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us and based on our examination of the records, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security given, if any.

v. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 of the Act and other relevant provisions with regard to the deposits accepted from the public 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 section 148(1) of the Act and are of the opinion that primafacie, the prescribed accounts and records have been made and maintained.

vii. a. According to the information and explanations given to us and on the basis of our examination of the records, the Company is generally regular in depositing with appropriate authorities the amounts deducted/ accrued in the books of accounts in respect of 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 other statutory dues, as applicable except for dues in respect of Service Tax, Value added tax, Dividend Distribution Tax, Income Tax, Works Contract Tax and TDS which have generally been regularly deposited during the year by the Company with the appropriate authorities, and there have been significant delays in few cases.

According to the information and explanations given to us, except for Rs. 2,13,07,899 /- on account of Dividend distribution tax, Rs. 82,96,075/- on account of Income-tax (Including TDS), Rs.3,38,77,883/- on account of Value added tax and Rs. 3,26,10,701/- on account of interest on Value added tax, no undisputed amounts payable in respect of Profession tax, Customs duty, Provident fund, Works contract tax, Cess, Service tax and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, following dues have not been deposited with the concerned authorities on account of dispute as at 31st March, 2016:

Name of the Statute	Nature of the Dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax	3,45,14,540	Asst. Yr. 2012-13	Commissioner of Income Tax (Appeals)
		6,90,02,060	Asst. Yr. 2011-12
		58,21,550	Asst. Yr. 2008-09	Assessing Officer
		1,62,135	Asst. Yr. 2007-08
		3,26,038	Asst. Yr. 2007-08	Income Tax Appellate Tribunal
Income Tax Act, 1961	TDS	1,33,49,391	Asst. Yr. 2007-08 to Asst. Yr. 2015-16	Assessing Officer

viii. In According to the information and explanations given to us, the company has not defaulted in repayment of dues to banks and financial Institution.

During the year, interest rate on 5,600 Non-Convertible Debentures amounting to '' 56 Crores was revised, with a reduction in rate of interest from 18% p.a. to 12% p.a. from the date of subscription and extension in the period of redemption period by one year.

The Company does not have any loan or borrowings from the government during the year.

ix. In our opinion and according to the information and explanations given to us, the monies raised by way of term loans were applied for the purposes for which they were raised. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.

x. According to the information and explanations given to us, no material fraud by the company or on the Company by its officer or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanation give to us and based on our examination of the records, the Company has not paid/ provided for managerial remuneration. Therefore, paragraph 3 (xi) of the Order is not applicable.

xii. In our opinion and according to the information given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanation give to us and based on our examination of the records of the Company, the transactions with related parties are in compliance of section 177 and 188 of the Companies Act, 2013 wherever applicable and the details have been disclosed in the Financial Statements, as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanations given by the management, 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 provisions of clause 3 (xiv) of the Order are not applicable to the company.

xv. The company has not entered into any non-cash transactions with the directors or persons connected with him. Therefore, paragraph 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.

For GMJ & Co.

Chartered Accountants

Firm Registration Number: 103429W

Haridas Bhat

Partner

Membership Number: 039070

Mumbai, 27 May 2016

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Mar 31, 2015

We have audited the accompanying Standalone financial statements of Satra Properties (India) Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

Management 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 and cash flows of the Company in accordance with the Accounting Standards referred to in 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; makingjudgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' 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 have conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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 Standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:-

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

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 by Section143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d) in our opinion, the 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 March 31, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

f) with respect to 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 the best of our information and according to explanation given to us:

i. Company has disclosed the amount of pending litigations on its financial position in it's Financial Statements which is in the nature of contingent liability being not required to be provided in the accounts.

ii. The Company does not anticipate any material foreseeable losses, on long-term contracts.

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 Auditors' Report of Satra Properties (India) Limited

The Annexure referred to in our Independent Auditors' Report to the members of company on the standalone financial statement for the year ended 31 March 2015, in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of even date.

We report that

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

b) The Fixed assets of the Company have been physically verified by the management which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

ii. a) In our opinion, physical verification of inventory lying with the Company has been conducted at reasonable intervals by the management.

b) In our opinion, the procedures of physical verification of inventory followed by the management are adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory. No material discrepancies have been noticed on physical verification between physical stock and book records.

iii. In respect of loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

a) In the case of the loans granted to the bodies corporate, the borrowers have been regular in the payment of the interest as stipulated. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, this paragraph is not applicable to the Company in respect of repayment of the principal amount.

b) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate.

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 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.

v. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits during the year under audit.

vi. We have been informed by the Company that the maintenance of cost record under Section 148(1) of the Act has not been prescribed by the Central Government.

vii. 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 of Wealth tax, Profession tax, Provident fund, Customs duty and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities, except for dues in respect of Works contract tax, Service tax, Value added tax and Income-tax which have generally been regularly deposited during the year by the Company with the appropriate authorities, and there have been significant delays in few cases. As explained to us, the Company did not have any dues on account of Employees' state insurance, Excise duty, cess and Investor education and Protection fund.

According to the information and explanations given to us, except Rs. 134,26,028/- on account of Dividend distribution tax, Rs. 157,15,389 on account of Income-tax, Rs. 539,64,358 on account of Value added tax and Rs. 18,25,000 on account of TDS, no undisputed amounts payable in respect of Wealth tax, Profession tax, Customs duty, Provident fund, Works contract tax, Cess, Service tax and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, following dues have not been deposited with the concerned authorities on account of dispute as at 31 March 2015

Name of the Statute Nature of the Amount (Rs.) Period to which Due a the amount relates

9,24,99,191 Asst. Yr. 2012-13

6,90,02,060 Asst. Yr. 2011-12

Income Tax

Income Tax Act, 1961 42,83,010 Asst. Yr. 2008-09

4,61,854 Asst. Yr. 2007-08 1,62,135 Asst. Yr. 2007-08

3,26,038 Asst. Yr. 2007-08

Income Tax Act, 1961 48,92,079 Asst. Yr. 2007-08 TDS to Asst. Yr. 2015-16

Name of the Statute Nature of the Forum Due a where dispute is pending

Assessing Officer / Commissioner of Income Tax (Appeals)

Income Tax

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

Assessing Officer

Income Tax Appeallate Tribunal

Income Tax Act, 1961 Assessing Officer TDS

c) According to the information and explanations given to us, the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provision of the Act and rules thereunder has been transferred to such fund within time.

viii. The Company does not have any accumulated losses at the end of the financial year and has not incurred any cash loss during the financial year and in the immediately preceding financial year.

ix. The Company has not defaulted in repayment of dues to bankers and debenture holders during the year under audit. The Company had not taken loans from any financial institution during the year.

x. In our opinion, in respect of the guarantee given by the company for the loans taken by others, the terms and conditions thereof are not, prima facie, prejudicial to the interest of the Company.

xi. In our opinion, the term loans have been used for the purpose for which the same were obtained.

xii. According to the information and explanations given to us, no material fraud on or by the Company has not been noticed or reported during the year nor we have been informed of any such case by the management that causes the financial statements to be materially misstated.

For GMJ & Co. Chartered Accountants Frm's Regn. No. 103429W

CA Haridas Bhat Partner M. No. 039070

Mumbai 29 May, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Satra Properties (India) Limited ("the Company") which comprise the balance sheet as at 31 March 2014, 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 purposes of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the accompanying financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014;

(ii) in the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows of the Company 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 enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, the statement of profit and loss and cash flow statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the directors as at 31 March 2014, and taken on record by the Board of Directors, we report that none of the directors of the Company 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 Act.

Independent Auditors'' Report

Annexure to the Independent Auditors'' Report - 31 March 2014

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verified certain fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to three companies covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). The maximum amount outstanding during the year was Rs. 77,59,29,409 and the year-end balance of such loans was Rs. 62,56,41,358. The Company has not granted any loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, except in the case of a subsidiary company and associate company where the rate of interest on which the loan has been granted is prejudicial to the interests of the Company, the rate of interest and other terms and conditions on which loans have been granted to the other company listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interests of the Company.

(c) The loans granted to companies covered in the register maintained under Section 301 of the Act are repayable on demand. According to the information and explanations given to us, the principal and interest have been paid as demanded by the Company during the year.

(d) There is no overdue amount in excess of Rupees one lakh in respect of the loans granted to the companies covered in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from one company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs. 25,95,00,000 and the year-end balance of such loans was Rs. 19,64,80,000.

(f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from a company listed in the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interests of the Company.

(g) The loans taken from a company covered in the register maintained under Section 301 of the Act are considered repayable on demand. According to the information and explanations given to us, the Company has been regular in repayment of principal and payment of interest as demanded.

(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 with regard to purchase of inventories, fixed assets, sale of commercial/residential premises and sale of services. The activities of the Company currently do not involve sale of goods. Accordingly, paragraph 4(iv) of the Order with respect to sale of goods is not applicable to the Company.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of 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.

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

(vii) The Company does not have an internal audit system.

(viii) 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 Act 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.

(ix) (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 of Wealth tax, Provident fund, Profession tax, Customs duty and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities, except for dues in respect of Works contract tax, Service tax, Value added tax and Income- tax which have generally been regularly deposited during the year by the Company with the appropriate authorities, and there have been significant delays in few cases. As explained to us, the Company did not have any dues on account of Employees'' state insurance, Excise duty, cess and Investor education and Protection fund.

According to the information and explanations given to us, except for Rs. 1,81,99,850/- on account of Dividend distribution tax, Rs. 5,29,63,975 on account of Income-tax and Rs. 3,22,89,193 on account of Value added tax no undisputed amounts payable in respect of Wealth tax, Profession tax, Customs duty, Provident fund, Works contract tax, Cess, Service tax 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.

(b) According to the information and explanations given to us, there are no dues of Wealth tax, Profession tax, Customs duty, Provident fund, Works contract tax, Service tax and Value added tax and Cess, which have not been deposited with the appropriate authorities on account of any disputes.

According to the information and explanations given to us, the following dues of Income-tax have not been deposited by the Company on account of disputes:

Name of the Statute Nature of the Amount (Rs.) Dues

Income Tax Act, 1961 Income Tax 6,90,02,060

Income Tax Act, 1961 Income tax 1,54,48,404

Income Tax Act, 1961 Income Tax 2,04,95,497

Income Tax Act, 1961 Income Tax 42,83,010

Income Tax Act, 1961 Income Tax 4,61,854

Income Tax Act, 1961 Income Tax 1,62,135

Income Tax Act, 1961 Income Tax 3,62,234

Income Tax Act, 1961 Income Tax 2,983

Income Tax Act, 1961 Income Tax 1,02,77,764

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

Income Tax Act, 1961 Asst. Yr. 2011-12 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2010-11 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2009-10 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2008-09 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2007-08 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2007-08 Assessing Officer

Income Tax Act, 1961 Asst. Yr. 2006-07 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Asst. Yr. 2005-06 Assessing Officer

Income Tax Act, 1961 Asst. Yr. 2007-08 Commissioner of Income Tax (Appeals)

(x) The Company does not have any accumulated losses at the end of the Financial Year and has not incurred cash losses in the Financial Year and in the immediately preceding Financial Year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers and debenture-holders during the year. The Company had not taken loans from any financial institution during the year.

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

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

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

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

(xvi) 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.

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

(xviii)The Company has not made any preferential allotment of shares to companies, firms and parties covered in the register maintained under Section 301 of the Act.

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

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

(xxi) 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 Bhuta Shah & Co. For B S R & Associates LLP Chartered Accountants Chartered Accountants Firm''s Registration No.: 101474W Firm''s Registration No.: 116231W

CA. Mitesh Kothari Bhavesh Dhupelia Partner Partner Membership No.: 110822 Membership No.: 042070

Mumbai, 30 May 2014 Mumbai, 30 May 2014

---

Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of Satra Properties (India) Limited ("the Company") which comprise the balance sheet as at 31 March 2013, 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

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

Auditors'' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

As more fully explained in Note 39 to the financial statements, construction work-in-progress of a project included construction cost of Rs. 157,974,510 arising out of a significant change in the structural plan of the project in the year ended 31 March 2009. In accordance with the provisions of Accounting Standard – 2, "Inventories", such construction costs should have been charged to the statement of profit and loss for the year ended 31 March 2009. During the year ended 31 March 2013, the Company has recognized revenue from this project as a result of which the cost of construction recognized in the statement of profit and loss includes Rs. 21,907,491 of construction cost incorrectly capitalised in an earlier year, resulting in an understatement of profit after tax for the year ended 31 March 2013 by Rs. 14,440,658. Consequently, the construction work-in-progress and the surplus in the statement of profit and loss continue to be overstated by Rs. 58,531,369 as at 31 March 2013.

Qualified Opinion

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 Qualified Opinion paragraph above, 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2013;

(ii) in the case of statement of profit and loss, of the profit of the Company for the year ended on that date; and

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

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 42 to the financial statements. As more fully explained therein, as per Circular No. 4/2013 dated 11 February 2013 ("the Circular") issued by the Government of India, Ministry of Corporate Affairs, the Company has not separately deposited or invested an amount of at least Rs. 77,460,000 being 15% of the amount of its debentures maturing within 1 year in specified deposits or investments as per the Circular, as specified in note 42 to the financial statements. The ultimate outcome of any possible penal consequences on this matter cannot presently be determined and, accordingly, no provision that may result due to non-compliance with the requirements of the Circular has been made in the financial statements.

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 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the balance sheet, the statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in the sub-section (3C) of Section 211 of the Act; and

e. on the basis of written representations received from the Directors as at 31 March 2013, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified 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 Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT – 31 MARCH 2013

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verified certain fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) The Company has not disposed of any fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to three companies covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). The maximum amount outstanding during the year was Rs. 806,976,710 and the year-end balance of such loans was Rs. 775,929,409. The Company has not granted any loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, except in the case of an associate company where the rate of interest on which the loan has been granted is prejudicial to the interests of the Company, the rate of interest and other terms and conditions on which loans have been granted to the other two companies listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interests of the Company.

(c) The loans granted to companies covered in the register maintained under Section 301 of the Act are repayable on demand. According to the information and explanations given to us, the principal and interest have been paid as demanded by the Company during the year.

(d) There is no overdue amount in excess of Rupees one lakh in respect of the loans granted to the companies covered in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from one company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs. 335,992,042 and the year-end balance of such loans was Rs. Nil.

(f ) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from a company listed in

the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interests of the Company. (g) The loans taken from a company covered in the register maintained under Section 301 of the Act are considered repayable on demand. According to the information and explanations given to us, the Company has been regular in repayment of principal and payment of interest as demanded. (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 with regard to purchase of inventories, fixed assets and sale of commercial/residential premises. The activities of the Company currently do not involve sale of goods and sale of services. Accordingly, paragraph 4 (iv) of the Order with respect to sale of goods and sale of services is not applicable to the Company. We have not observed any major weakness in the internal control system during the course of the audit. (v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of 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. (vi) The Company has not accepted any deposits from the public. (vii) The Company does not have an internal audit system.

(viii) 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 Act 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.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, a mou nts de ducte d/acc r ued i n t he book s of accou nt i n respe c t of u nd isputed st at utor y dues of Wea lt h Ta x, Profession Ta x a nd other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities, except for dues in respect of Provident Fund, Works Contract Tax, Cess, Service Tax, Value Added Tax and Income Tax which have generally been regularly deposited during the year by the Company with the appropriate authorities, and there have been significant delays in few cases. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Customs Duty, Excise Duty and Investor Education and Protection Fund. According to the information and explanations given to us, except for X 12,947,303 on account of Dividend Distribution Tax and 60,437,979 on account of Income Tax no undisputed amounts payable in respect of Wealth Tax, Profession Tax, Provident Fund, Works Contract Tax, Cess, Service Tax, Value Added Tax, Income 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. (b) According to the information and explanations given to us, there are no dues of Wealth Tax, Profession Tax, Provident Fund, Works Contract Tax and Cess, which have not been deposited with the appropriate authorities on account of any disputes. According to the information and explanations given to us, the following dues of Income-Tax, Service Tax and Value Added Tax have not been deposited by the Company on account of disputes:

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

Income Tax Act, 1961 Income Tax 69,002,060 Asst. Yr. 2011-12 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income tax 15,448,404 Asst. Yr. 2010-11 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 20,495,497 Asst. Yr. 2009-10 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 461,854 Asst. Yr. 2007-08 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 4,283,010 Asst. Yr. 2008-09 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 162,135 Asst. Yr. 2007-08 Assessing Officer

Income Tax Act, 1961 Income Tax 362,234 Asst. Yr. 2006-07 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 70,213 Asst. Yr. 2005-06 Assessing Officer

Maharashtra Value Value Added Tax 85,095,473 Fin. Yr. 2006-07 to Supreme court (filed by MCHI) Added Tax Act, 2002 2012-13

Finance Act, 1994 Service Tax 9,596,166 Fin. Yr. 2010-11 to Supreme court (filed by MCHI) 2012-13

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

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to its bankers and debenture holders at various dates during the year which have been made good as at the year end. The defaults existing as at the balance sheet date are on account of repayment ofX 14,063,100 to a bank for a period ranging from 78 days to 89 days. The Company has made good these defaults to the lender bank subsequent to the balance sheet date. The Company had not taken any loans from financial institutions during the year.

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

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

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

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

(xvi) 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.

(xvii) According to the information and explanations given to us and on an overall examination of the b alance sheet of the Comp any, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies, firms and parties covered in the register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of debentures issued during the previous year. There were no debentures issued during the current year.

(xx) The Company has not raised any money by public issues.

(xxi) 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 Bhuta Shah & Co. For B S R & Associates

Chartered Accountants Chartered Accountants

0Firm''s Registration No.: 101474W Firm''s Registration No.: 116231W

CA. Mitesh Kothari Bhavesh Dhupelia

Partner Partner

Membership No.: 110822 Membership No.: 042070

Mumbai Mumbai

28 May 2013 28 May 2013

---

Mar 31, 2012

We have audited the attached balance sheet of Satra Properties (India) Limited ('the Company') as at 31 March 2012 and 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.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as follows:

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 Companies Act, 1956 ('the Act'), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, except as stated in paragraphs (f) and (g) below, the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of the written representations received from the directors of the Company as of 31 March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) As more fully explained in Note 41 to the financial statements, construction work-in-progress of a project included construction cost of Rs. 157,974,510 arising out of a significant change in the structural plan of the project in the year ended 31 March 2009. In accordance with the provisions of Accounting Standard - 2, "Inventories", such construction costs should have been charged to the statement of profit and loss for the year ended 31 March 2009. During the year ended 31 March 2012, the Company has recognized revenue from this project as a result of which the cost of construction recognized in the statement of profit and loss includes Rs. 77,535,650for the year, resulting in an understatement of profit after tax for the year ended 31 March 2012 by Rs. 51,108,850. Consequently, the construction work-in-progress and the surplus in the statement of profit and loss continues to be overstated by Rs. 80,438,860 as at 31 March 2012;

(g) As more fully explained in Note 43 to the financial statements, in view of certain recent judicial pronouncements, the Company is required to pay Value Added Tax ('VAT') on sale of residential/commercial properties to the relevant authorities. The Company is currently in the process of ascertaining the exact applicability of these pronouncements, especially in respect of tax rate applicable, contractual ability to collect VAT from past and current customers and the mechanism of collection and payment of VAT to the government authorities. The Company is required to record the VAT collectable from customers and the VAT payable to the government authorities, and the VAT which is deemed to be not-collectable from its past and current customers needs to be charged to the statement ofprofit and loss. Pending quantification of the VAT collectable from customers, the VAT payable to the government authorities, and the VAT to be charged to the statement of profit and loss, we are unable to comment the impact of the same on the balance of trade receivables and other current liabilities as at 31 March 2012, on the rates and taxes and the profit for the year ended 31 March 2012 and the consequential impact on the balance in surplus in the statement of profit and loss as at 31 March 2012; and

(h) in our opinion, and to the best of our information and according to the explanations given to us, subject to the effect of the matter included in the paragraph (f) above and impact of adjustments required, if any, in respect of the matter included in the paragraph (g) above, the said accounts 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:

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

ii. in the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and

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

Annexure to the auditors' report - 31 march 2012

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verified certain fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) No fixed assets were disposed off during the year.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

iii) (a) The Company has granted unsecured loans to three companies covered in the register maintained under Section 301 of the Companies Act, 1956 ('the Act'). The maximum amount outstanding during the year was Rs. 732,252,315 and the year-end balance of such loans was Rs. 706,251,710. The Company has not granted any loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted to companies covered in the register maintained under Section 301 of the Act are repayable on demand. According to the information and explanations given to us, the principal and interest have been paid as demanded by the Company during the year.

(d) There is no overdue amount in excess of Rupees one lakh in respect of the loans granted to the companies covered in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from one company and one party covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs. 382,603,484 and the year-end balance of such loans was Rs. 335,992,042.

(f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from a company and a party listed in the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interest of the Company.

(g) The loans taken from a company and a party covered in the register maintained under Section 301 of the Act are considered repayable on demand. According to the information and explanations given to us, the Company has been regular in repayment of principal and payment of interest as demanded.

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 with regard to purchase of inventories, fixed assets, transferrable development rights and sale of commercial/residential premises and sale of transferrable development rights. The activities of the Company currently do not involve sale of goods. Accordingly, paragraph 4 (iv) of the Order with respect to sale of goods is not applicable to the Company. We have not observed any major weakness in the internal control system during the course of the audit.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of 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.

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

vii) The Company does not have an internal audit function.

viii) 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 Act 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.

ix) (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 of Wealth Tax, Cess, Profession Tax, Provident Fund and other material statutory dues have been regularly deposited during the year by the Company, except for Works Contract Tax, Service tax and Income Tax which have generally been regularly deposited during the year by the Company with the appropriate authorities, and there have been significant delays in few cases. Also refer Note 43 to the financial statements in respect of material statutory dues of Value added tax. As explained to us, the Company did not have any dues on account of Employees' State Insurance, Customs Duty, Excise Duty and Investor Education and Protection Fund.

According to the information and explanations given to us, except for Rs. 8,039,147 on account of Dividend Distribution Tax, Rs. 77,490,141 on account of Income Tax and Rs. 169,502 on account of Works Contract Tax, no undisputed amounts payable in respect of Wealth Tax, Cess, Profession Tax, Works Contract Tax, Provident Fund, Service Tax, Income tax and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Cess, Profession Tax, Works Contract Tax, Provident Fund and Service Tax which have not been deposited with the appropriate authorities on account of any disputes.

According to the information and explanations given to us, the following dues of Income-tax have not been deposited by the Company on account of disputes:

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

Income Tax Act, 1961 Income tax 17,455,266 A.Y. 2007-08 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income tax 461,854 A.Y. 2007-08 Commissioner of Income Tax (Appeals)

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

xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to its bankers and financial institutions at various dates during the year which have been made good as at the year end. The defaults existing as at the balance sheet date are on account of (a) repayment of interest amount to a bank of Rs. 2,383,166for a period ranging from 57 days to 89 days and; (b) the repayment of an amount of Rs. 20,927,604 to a bank which includes interest amount of Rs. 927,604 has remained unpaid as at the date of the auditor's report.

The Company has not defaulted in repayment of dues to its debenture holders during the year.

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

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

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

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

xvi) 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.

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

xviii) The Company has not made any preferential allotment of shares to companies, firms and parties covered in the register maintained under Section 301 of the Act.

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

xx) The Company has not raised any money by public issues.

xxi) 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 M/s. Bhuta Shah & co. For B S R & Associates

Chartered Accountants Chartered Accountants

Firm's Registration No. 101474W Firm's Registration No. 116231W

S. J. Parmar Bhavesh Dhupelia

Partner Partner

Membership No. 103424 Membership No. 042070

Mumbai, 30 May 2012 Mumbai, 30 May 2012

---

Mar 31, 2011

We have audited the attached Balance Sheet of Satra Properties (India) Limited (‘the Company') as at 31 March 2011 and 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.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as follows:

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 Companies Act, 1956 (‘the Act'), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, except as stated in paragraph (f) below, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

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

(f) As more fully explained in Schedule 36 to the financial statements, construction work-in-progress of a project includes construction cost of Rs. 157,974,510 arising out of a significant change in the structural plan of the project, resulting in over- statement of the construction work-in-progress as at 31 March 2011 (31 March 2010: Rs. 157,974,510). In accordance with the provisions of Accounting Standard – 2, "Inventories”, such construction costs should have been charged to the profit and loss account for the year ended 31 March 2009. As at 31 March 2011 and as at 31 March 2010, construction work-in-progress and the balance in the profit and loss account is over-stated by the above amount. As the Company has not recognised any revenue from this project during the years ended 31 March 2011 and 31 March 2010, this has no impact on the results for the years then ended; and

(g) in our opinion, and to the best of our information and according to the explanations given to us, subject to the effect of the matter stated in paragraph (f) above, the said accounts 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

ii. in the case of the Profit and Loss account, of the profit of the Company for the year ended on that date; and

iii. in the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT – 31 MARCH 2011 (Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verified certain fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has granted unsecured loans to four companies covered in the register maintained under Section 301 of the Companies Act, 1956 (‘the Act'). The maximum amount outstanding during the year was Rs. 1,009,569,328 and the year-end balance of such loans was Rs. 566,522,199. The Company has not granted any loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted to companies covered in the register maintained under Section 301 of the Act are repayable on demand. According to the information and explanations given to us, the principal and interest have been paid as demanded by the Company during the year.

(d) There is no overdue amount in excess of Rupees one lakh in respect of the loans granted to the companies covered in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from one company and one other party covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs. 406,452,576 and the year- end balance of such loans was Rs. 374,803,483.

(f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from a company and a party listed in the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interest of the Company.

(g) The loans taken from the Company and a party covered in the register maintained under Section 301 of the Act are considered repayable on demand. According to the information and explanations given to us, the Company has been regular in repayment of principal as demanded and in the payment of interest.

(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 with regard to purchase of inventories, fixed assets and sale of commercial/residential premises. The activities of the Company currently do not involve sale of goods and services. Accordingly, paragraph 4 (iv) of the Order with respect to sale of goods and services is not applicable to the Company. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of 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.

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

(vii) The Company does not have an internal audit function.

(viii) The Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Act for any of the activities carried out by the Company.

(ix) (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 of Wealth Tax, Cess, Profession Tax, Provident Fund and other material statutory dues have been regularly deposited during the year by the Company, except for Works Contract Tax and Income Tax which have generally been regularly deposited during the year by the Company with the appropriate authorities though there have been slight delays in a few cases. As explained to us, the Company did not have any dues on account of Employees' State Insurance, Customs Duty, Excise Duty, Service Tax and Investor Education and Protection Fund.

There were no dues on account of Cess under Section 441A of the Act since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

According to the information and explanations given to us, except for Rs. 2,686,545 on account of Dividend Distribution Tax and Rs. 69,246,492 on account of Income Tax, no undisputed amounts payable in respect of Wealth Tax, Profession Tax, Provident Fund, Works Contract Tax, Cess and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Service Tax, Works Contract Tax and Cess which have not been deposited with the appropriate authorities on account of any disputes. According to the information and explanations given to us, the following dues of Income-tax have not been deposited by the Company on account of disputes:

Name of the Statute Nature of Amount Period to which the Dues (Rs.) the amount relates

Income Tax Act, 1961 Income tax 17,455,266 A.Y. 2007-08

Income Tax Act, 1961 Income tax 461,854 A.Y. 2007-08

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

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

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to its bankers and financial institutions at various dates during the year which have been made good as at the year end. The defaults existing as at the balance sheet date are set out below:

Name of the bank/ Amount due on Amount repaid on financial institution

Indian Bank 31 January 2011 28 April 2011

Indian Bank 31 January 2011 Unpaid till 27 May 2011

Indian Bank 31 March 2011 Unpaid till 27 May 2011

HUDCO 28 February 2011 Unpaid till 27 May 2011

HUDCO 28 February 2011 27 April 2011

Syndicate Bank 31 January 2011 28 April 2011

Syndicate Bank 28 February 2011 28 April 2011

Syndicate Bank 31 March 2011 30 April 2011

Syndicate Bank 31 March 2011 Unpaid till 27 May 2011

Name of the bank/ Amounts due on Number of days financial balance sheet delay institution date

Indian Bank 1,829,229 87

Indian Bank 3,187,183 -

Indian Bank 64,845,677 -

HUDCO 75,449,264 -

HUDCO 2,500,000 58

Syndicate Bank 3,042,616 87

Syndicate Bank 3,537,493 59

Syndicate Bank 415,174 30

Syndicate Bank 103,451,331 -

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

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

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

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

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

(xvi) 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.

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

(xviii) The Company has not made any preferential allotment of shares to companies, firms and parties covered in the register maintained under Section 301 of the Act.

(xix) The Company has not issued any debentures. Accordingly, paragraph 4 (xix) of the Order is not applicable to the Company.

(xx) The Company has not raised any money by public issues. However, during the year the Company has made a preferential allotment of 6,000,000 equity shares of Rs. 20 fully paid up amounting to Rs. 120,000,000 including premium of Rs. 108,000,000.

(xxi) 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 & Associates Chartered Accountants Firm's Registration No: 116231W

Bhavesh Dhupelia Partner Membership No: 042070

Mumbai, 27 May 2011

For M/s Bhuta Shah & Co. Chartered Accountants Firm's Registration No.: 101474W

S. J. Parmar Partner Membership No: 103424

Mumbai, 27 May 2011

---

Mar 31, 2010

We have audited the attached Balance Sheet of Satra Properties (India) Limited (the Company) as at 31 March 2010, 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 onouraudit.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as follows:

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

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

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, except as stated in paragraph (f) below, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of the written representations received from the directors of the Company as on 31 March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) As more fully explained in Schedule 39 to the financial statements, construction work-in-progress of a project includes construction cost of Rs 157,974,510 arising out of a significant change in the structural plan of the project, resulting in over- statement of the construction work-in-progress as at 31 March 2010 (31 March 2009: Rs 157,974,510). In accordance with the provisions of Accounting Standard - 2, "Inventories", such construction costs should have been charged to the profit and loss account for the year ended 31 March 2009. As at 31 March 2010, construction work-in-progress and the profit and loss account are over-stated by the above amount. As the Company has not recognized any revenue from this project during the year ended 31 March 2010, this has no impact on the results for the year then ended; and

(g) in our opinion, and to the best of our information and according to the explanations given to us, subject to the effect of the matter stated in paragraph (f) above, the said accounts 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;

ii. in the case of the Profit and Loss account, of the profit of the Company for the year ended on that date; and

iii. in the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT - 31 MARCH 2010 (Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verified certain fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) The Company has not disposed of any fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has granted loans to two companies covered in the register maintained under Section 301 of the Companies Act, 1956 (the Act). The maximum amount outstanding during the year was Rs 462,602,250 and the year- end balance of such loans was Rs 462,602,250. The Company has not granted any loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted to companies covered in the register maintained under Section 301 of the Act are repayable on demand. According to the information and explanations given to us, the loans have not been demanded by the Company during the year.

(d) There is no overdue amount in excess of Rupees one lakh in respect of the loan granted to the Company covered in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from six companies and two other parties covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs 333,303,022 and the year-end balance of such loans was Rs 265,447,085.

(f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies and other parties listed in the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interest of the Company.

(g) The loans taken from the companies and other parties covered in the register maintained under Section 301 of the Act are considered repayable on demand. According to the information and explanations given to us, the loans have not been demanded during the year.

(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 with regard to purchase of inventories, fixed assets and sale of commercial/residential premises. The activities of the Company currently do not involve sale of goods and services. Accordingly, paragraph 4 (iv) of the Order with respect to sale of goods and services is not applicable to the Company. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanationsgiven to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of 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. (vi) The Company has not accepted any deposits from the public. (vii) The Company does not have an internal audit function.

(viii) The Central Govern ment has not prescribed the maintenance of cost records under Section 209(1) (d) of the Act for any of the activities carried out by the Company.

(ix) (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 of Wealth Tax, Provident Fund and Profession Tax have been generally regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of the records of the Company, there have been serious delays in several cases in respect of depositing the undisputed statutory dues of Works Contract Tax, Cess and Income Tax with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees State Insurance, Customs Duty, Excise Duty, Service Tax and Investor Education and Protection Fund.

There were no dues on account of Cess under Section 441A of the Act since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

According to the information and explanations given to us, except for Rs 1,053,834 on account of Works Contract Tax, Rs 2,426,658 on account of Dividend Distribution Tax and Rs 79,522,124 on account of Income Tax, no undisputed amounts payable in respect of Wealth Tax, Profession Tax, Provident Fund, Cess and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues of Wealth Tax, Works Contract Tax and Cess which have not been deposited with the appropriate authorities on account of any disputes. According to the information and explanations given to us, the following dues of Income-tax have not been deposited by the Company on account of disputes:

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

Income Tax Act, 1961 Income tax 17,455,266 A.Y. 2007-08 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income tax 461,854 A.Y. 2007-08 Commissioner of Income Tax (Appeals)

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

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to its bankers and financial institutions at various dates during the year which have also been made good as at the year end. The defaults existing as at the balance sheet date are set out below;

Name of the bank / financial Amount due on Amount repaid Amounts due on Number of days institution on balance sheet delay date

Indian Bank 31 March 2010 27 April 2010 3,726,479 27

SICOM Investment and Finance Limited 14 May 2009 12 May 2010 491,619,729 363

Yes Bank 31 January 2010 27 April 2010 5,636,197 85

Yes Bank 20 February 2010 19 May 2010 50,000,000 88

Yes Bank 28 February 2010 29 May 2010 5,561,400 89

Yes Bank 31 March 2010 Unpaid till date 6,286,630

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

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

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

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

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

(xvi) 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.

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

(xviii)The Company has not made any preferential allotment of shares to companies, firms and parties covered in the register maintained under Section 301 of the Act.

(xix) The Company has not issued any debentures. Accordingly, paragraph 4(xix) of the Order is not applicable to the Company.

(xx) The Company has not raised any money by public issues.

(xxi) 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 M/s Bhuta Shah & Co. For B S R & Associates

Chartered Accountants Chartered Accountants

Firms Registration No: 101474W

Firms Registration No: 116231W

S. J. Parmar Bhavesh Dhupelia

Partner Partner

Membership No: 103424 Membership No: 042070

Mumbai, 29 May, 2010 Mumbai, 29 May, 2010