Auditor Report of B Nanji Enterprises Ltd.

Mar 31, 2015

We have audited the accompanying stand alone financial statements of B Nanji Enterprises Limited, Ahmedabad which comprise the balance sheet as at March 31, 2015 and the statement of profit & loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the financial statements

Management is responsible for preparation of these financial statements that give a true and fair review of the financial position financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including Accounting Standards referred to in sec. 133 of the Companies Act, 2013 "the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the Auditing and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under.

We conducted our auditing accordance with the Standards on Auditing specified u/s. 143(10) of the Act. These 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 misstatements.

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 risk 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 whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

BASIS FOR QUALIFIED OPINION

Attention is invited to Note No. 1 regarding of valuation of work-in - progress at Vevji, Umargaon site at Direct Cost Plus Borrowing Cost, for which no direct nexus for deployment of fund borrowed is established, which is not in conformity with the requirement of accounting standards i.e. AS-2, AS-7 and AS-16 issued by the Institute of Chartered Accounts of India. Had the company not included the borrowing cost in valuation of stock the profit for the year would have been lower by Rs.427.48 lacs and value of current assets would be lower by Rs.427.48 lacs

Attention is invited to Note No. 2 regarding of Sales of Flats/Apartments of Akansha Flats, scheme at Vevji, Umargam, Dist. Thane Maharashtra, sales is accounted at the time of giving possession to the purchasers. However, in view of the provisions of Maharashtra Ownership of Flats Act, 1963, company has to form either co. op. Society or a Company and execute sale deed in favour of society/ company. Company has booked sales in the books of accounts on giving possession to the buyers of the flats. Company has not recovered the contribution from the members for the proposed society as stipulated in the Agreement for Sale.

Attention is invited to Note No. 3 advance payment of Rs.300.00 lacs a.gainst an a.greement of Rs.486.00 lacs with related party during the year under review without prior approval of members by way of a special resolution.

Attention is invited to Note No. 4 rega.rding Rs. 220.55 lacs received as advance for land in earlier years which is not considered as Deposit within the meaning of Sec. 73 of the Act read together with Rule 2 (12)(d).

Attention is invited to Note No. 5 regarding No Provision for Bad and Doubtful Interest free loans of Rs.69.07 lacs given in earlier years.

Attention is invited to Note No. 8 regarding non provision of Leave Enca.shment which is not in conformity with Accounting Standard AS- 15 issued by the Institute of Chartered Accountants of India.

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 aforesaid stand alone financial statements give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March 2015 and its' Profit and its cash flow for the year ended on that date.

Other Matter

Report on other legal and regulatory requirement.

1. As required by the Companies ( Auditor's Report) Order 2015 ( "the Order" issued by the Central Government of India in the terms of sub - sec.(11) of section 143 of the Companies Act, 2013 we give in the Annexure a statement on the matters specified in paragraphs 3 & 4 of the Order to the extent applicable.

2. As required by sec. 143(3) of the Companies Act, 2013 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) Except for the effect of the matter described in sub para-1 of the Basis Of Qualified Opinion paragraph, in our opinion proper books of account, as required by law, have been kept by the Company so fat as appears from our examination of those books.

(c) The balance sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report, are in agreement with the books of accounts.

(d) Except for the effect of the matter described in sub - para 1 to 8 of the Basis of Qualified Opinion paragraph above, In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The company has disclosed the impact of pending litigations on its financial statements.

ii. The company has made provisions as required under the applicable laws for accounting standards for material foreseeable losses on long term contracts

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

ANNEXURE TO THE AUDIT REPORT

1. (a) The company has updated fixed assets register to show full particulars including quantitative details and situation of its fixed assets and reconciling the same with general ledger.

(b) According to the information and explanations given to us all the assets have been physically verified by management at the end of the year which in our opinion, is reasonable having regard to the size and nature of its business. We have been informed that no material discrepancies were noticed on such verification.

2. (a) The inventory includes Land including Banakhat rights in Land, Completed Building, Construction work in progress and development material. Physical verification of these inventories have been conducted at the year end by the management. The frequency of such verification is required to be Strengthen.

(b) Company has given contract for construction work including labour and material and hence no stock of materials is required to be maintained. Regarding other materials the same is treated as directly consumed as and when purchased. Hence the company is not required to maintain any stock records and its question of its physical verification does not arise.

3. In our opinion and according to the information and explanations given to us there is adequate internal control procedure commensurate with the size of the company and nature of its business regard to awarding contracts, purchases of materials, fixed assets. sale of goods and services. During the course of our audit, we have not observed continuing failure to correct major weaknesses in internal controls.

4. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 and rules framed there under. However amount received as advance for sale of Land or contribution from members is not considered as Deposits within the meaning of Section 73 of the Companies Act, 2013 read with Rule 2(XII)(d).

5. We have been informed by the management, no cost audit records has been prescribed under section 148(1) of the Companies Act, 2013 in respect of products of the company.

6. Company is not depositing Provident Fund Dues with appropriate authorities in time. Provident Fund Dues (Both employees and employer's Contribution are still payable for the period from Sept.14 to March 15) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Value Added Tax, Excise Duty, Custom Duty, Service Tax, Sales Tax and other statutory dues applicable to company were in arrears, as at 31/03/2015 for a period of more than six months from the date become payable.

7. In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to a financial institution.

8. In our opinion, the company has given guarantee to a The Vijay Co- Operative Bank Ltd., Tata Capital Financial Services Ltd. for advances taken by a firm M/s. B Nanji in which Company is a partner.

9. The loans have been applied for the purpose for which they were raised.

10. 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 ATUL DALAL & CO. CHARTERED ACCOUNTANTS (Firm Reg. No.100760W)

AHMEDABAD MAY 15, 2015 ATUL J. DALAL PROPRITER MEM. NO.14665

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Mar 31, 2014

We have audited the accompanying financial statements of B Nanji Enterprises Limited, Ahmedabad which comprise the balance sheet as at March 31, 2014 and the statement of profit & loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial statements :

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

Auditor''s responsibility :

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risk 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 reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

BASIS FOR QUALIFIED OPINION :

1) Attention is invited to Note No. 2 regarding valuation of the work-in-progress at Umargaon, site at Direct Cost Plus Borrowing cost, for which no direct nexus for deployment of fund borrowed is established, which is not in confirmity with the requirement of various accounting standards i.e. AS-2, AS-7 AS-16 issued by the Institute of Chartered Accountants of India. Had the company not included the borrowing cost in valuation of stock, the profit for the year would have been lower by Rs. 468.61 lacs. From the current year, Company has changed the system of valuation of WIP at Bhilad & Kathlal . Last year it has included entire borrowing cost in valuation of WIP, however from the current year it has not included the borrowing cost in the valuation of WIP of Bhilad & Kathlal to comply with the requirement of As-2 & AS-7 issued by the Institute of Chartered Accountants of India, as result of the same the profit for the year is decreased by Rs. 63-70 lacs.

2) Attention is invited to Note No.3 regarding unsecured interest free loans/ advance given to a company under the same management in which Chairman & Managing Director and Executive directors are interested which is not in confirmity of provisions of the Sec. 295 of the Companies Act, 1956.

3) In case of Sales of Flats/Apartments of Akanksha Flats, Scheme at Umargaon, Dist. Thane, Maharashtra, sales is accounted at the time of giving possession to the purchasers. However, in view of the provisions of Maharashtra Ownership of Flats Act, 1963, company has to form either Co. Op. Society or a Company and execute sale deed in favour of Society/ Company at the time of Completion of Scheme. Pending execution of sale deed / conveyance in favour of Society / Company, Company has booked sales in the accounts on giving possession to the buyers of the flats/ Company has not recovered the contribution from the members of the proposed society as stipulated in the Agreement for Sale / Act.

Opinion :

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in para 1,2 and 3 of the basis for qualified opinion paragraph above and the possible effect of the matter described in para 1,2 & 3 above, of 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:

(a) In case of the balance sheet, of the state of affairs of the Company as at March 31, 2014.

(b) In the case of the statement of profit & loss, profit for the year ended on that date, and

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

Report on other legal and regulatory requirement :

1. As required by the Companies ( Auditor''s Report) Order 2003 ( "the Order" issued by the Central Government of India in the terms of sub - sec.(4A) of section 227of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the Order.

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

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

(b) Except for the effect of the matter described in sub para-1 of the Basis Of Qualified Opinion paragraph, in our opinion proper books of account, as required by law, have been kept by the Company so fat as appears from our examination of those books.

(c) The balance sheet, statement of profit & loss and cash flow statement dealt with by this report, are in agreement with the books of accounts.

(d) Except for the effect of the matter described in sub - para 1, 2 & 3 of the Basis of Qualified Opinion paragraph above, In our opinion, the balance sheet, statement of profit & loss and cash flow statement comply with the Accounting Standards referred to in the sub-sec.(3C) of sec.211 of the Act.

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

ANNEXURE TO THE AUDIT REPORT

1. (a) The company is in process of updating fixed assets register to show full particulars including quantitative details and situation of its fixed assets and reconciling the same with general ledger.

(b) According to the information and explanations given to us all the assets have been physically verified by management at the end of the year which in our opinion, is reasonable having regard to the size and nature of its business. We have been informed that no material discrepancies were noticed on such verification.

(c) During the year no major assets have been disposed off by the company.

2. (a) The inventory includes Land including Banakhat rights in Land, Completed Building, Construction work in progress and development material. Physical verification of these inventories have been conducted at the year end by the management. The frequency of such verification is required to be enhanced.

(b) Company has given contract for construction work including labour and material and hence no stock of materials is required to be maintained. Regarding other materials the same is treated as directly consumed as and when purchased. Hence the company is not required to maintain any stock records and itsquestion of its physical verification does not arise.

3. (a) Company has taken interest bearing loans from 2 directors and interest free loan from companies covered in the register maintained u/s 301 of the Companies'' Act, 1956. & from other Companies. The maximum amount involved during the year was Rs.1124.00 lacs and the year end balance of loans taken from such parties was Rs.1078.91 lacs.

(b) In our opinion, the terms and condition on which such loans were taken from companies, firms and other parties listed in the register maintained u/s 301 of the Companies Act, 1956 are, not prima-facie, prejudicial to the interest of the company.

(c) As no repayment schedule has been fixed for loans taken/granted the same have not been repaid / recovered. However interest has been credited in the account wherever payable.

(d) As no repayment schedule has been fixed for loans taken/ granted, we could not opine whether there is any overdue amount of loan taken from or granted to the parties / companies, firms or any other parties listed in the register maintained u/s 301 of the company Act, 1956. except interest free loan given to a company under the same management for which no repayment schedule has been fixed and hence not repaid by that company.

4 In our opinion and according to the information and explanations given to us there is adequate internal control procedure commensurate with the size of the company and nature of its business regard to purchases of materials, fixed assets. sale of goods and services. During the course of our audit, we have not observed continuing failure to correct major weaknesses in internal controls.

5. In our opinion and according to the information and explanations given to us, particulars of all contracts or arrangements that need to be entered into the register maintained u/s 301 of the Act, have been so entered.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of sec.58A & 58AAof the companies Act.1956 and rules framed there under.

7. Company has not yet introduced internal audit system.

8. As per the information and explanations given to us, the Company has not maintained any cost records as required under clause (d) of sub- section(1)of section 209 of the Act in respect of real estate operations, hence the question of our review of the same does not arise

9. Company is generally regular in depositing Provident fund Dues with appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax and cess were in arrears, as at 31/03/2014 for a period of more than six months from the date become payable except VAT and service tax of earlier years amount of which is not ascertained by the company and VAT for the year 2006-07 amounting to Rs.13.22 lacs

10. In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to a financial institution.

11. The company has not granted any loans or advance on the basis of security by way of pledge of shares, debentures and other securities.

12. In our opinion the company is not a chit fund or a nidhi mutual fund/society.

14. In our opinion, the company is not dealing in shares, securities, debentures or other investment. Hence, the provisions of clause 4 (xiv) of the Companies (auditor''s Report) Order 2003 are not applicable.

15. In our opinion, the company has not given any guarantee for loans taken by others.

16. As informed to us the company has not taken/ availed any long term loan during the year under consideration and hence the question of its application or use does not arise.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. 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 ATUL DALAL & CO. CHARTERED ACCOUNTANTS FIRM REG. NO. 100760W

AHMEDABAD ATUL J. DALAL MAY 30, 2014 PROPRIETOR MEM. NO. 14665

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Mar 31, 2012

We have audited the attached balance sheet of B. Nanji Enterprises Limited as at March 31, 2012 and the Statement of Profit & Loss and also 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 the 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 amount and disclosures in financial statements, An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies ( Auditor’s Report ) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956,and on the basis of such checks and verification as were considered necessary, we report, in annexure a statement on the matters wherever applicable as specified in paragraph 4 & 5 of the said Order.

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

1) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit .

2) 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.

3) The balance sheet, statement of profit & loss and cash flow statement dealt with by this report are in agreement with the books of accounts.

4) The balance sheet, Statement profit & loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, except:

(a) Note No.1 regarding Non Provision of Income Tax Demand of earlier years of Rs.617.69 lacs.

(b) Note No. 3 regarding accounting entry made for adjusting creditors account by debiting creditors and crediting account of Bhikhubhai N Padsala on his statement that he had made the payment to such party in earlier year by Cash.

(c) Note No.4 regarding non provision of Retirement Benefit being accounted on cash basis which is not in conformity with As-15, Accounting Standards for retirement benefits to employees, issued by the Institute of Chartered Accountants of India.

(d) Note No. 5 regarding non provision of Current and Deferred Tax liability.

(e) Note No. 6 regarding non provision of VAT and Service Tax Liability for earlier years, amount of which is not determined

5) On the basis of written submission received from directors as on 31/03/2012 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31/03/2012 from being appointed as a director of the company as required u/s 274 (1) (g) of the Companies Act,1956.

6) In our opinion, and to the best of our information and explanations given to us, the said accounts, read together with notes & other documents annexed thereto, give the information required by the companies Act.1956. in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the balance sheet, of the affairs of the state of affairs of the company as at March 31, 2012,

(b) In the case of the Statement of Profit & Loss, of the profit for the period ended on that date, and

(c) In the case of the case flow statement, of the case flow for the period ended on that date.

ANNEXURE TO THE AUDIT REPORT

1. (a) The company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.

(b) All the assets have been physically verified by management at the end of the year which in our opinion, is reasonable having regard to the size and nature of its business. We have been informed that no material discrepancies were noticed on such verification.

(c) During the year no major assets have been disposed off by the company.

2. (a) Inventory has been physically verified by the management during the year, in our opinion, the frequency of

verification is reasonable.

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

(c) As informed to us no major discrepancy have been noticed on such verification.

3. (a) Company has taken interest free loans from 2 directors, shareholders and from companies covered in the register maintained u/s 301 of the Companies’ Act, 1956. The maximum amount involved during the year was Rs.2024.73 lacs and the year end balance of loans taken from such parties was Rs.1289.61 lacs.

(b) In our opinion, the terms and condition on which such loans were taken/granted to companies, firms and other parties listed in the register maintained u/s 301 of the Companies ACT.1956 are, not prima-facie, prejudicial to the interest of the company.

(c) As no repayment schedule has been fixed for loans taken/granted the same have not been repaid / recovered.

(d) As no repayment schedule has been fixed for loans taken/granted, we could not opine whether there is any overdue amount of loan taken from or granted to the parties / companies, firms or any other parties listed in the register maintained u/s 301 of the company Act,1956.

4 In our opinion and according to the information and explanations given to us there is adequate internal control procedure commensurate with the size of the company and nature of its business regard to purchases of materials, fixed assets. sale of goods and services. During the course of our audit, we have not observed continuing failure to correct major weaknesses in internal controls .

5. In our opinion and according to the information and explanations given to us, there are no transactions to be entered into the register maintained u/s 301 of the companies Act, 1956 and exceeding the value of rupees five lacs.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of sec.58A & 58AAof the companies Act.1956 and rules framed there under.

7. Company has not yet introduced internal audit system.

8. According to the information and explanations given to us. Central Government has not prescribed the maintenance of cost accounting records u/s 209(1) (d) of the companies Act,1956.

9. Company has not deposited with appropriate authorities undisputed statutory dues of Provident Fund. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax and cess were in arrears, as at 31/03/2012 for a period of more than six months from the date become payable except VAT and service tax of earlier years.

According to the information and explanations given to us, the disputed dues of income tax that have not been deposited on account of matter pending before respective authorities are as under.

Name of Statute Nature of Amount involved Forum where Dues Rs. In lacs dispute is pending

Income Tax Act,1961 Tax on Rs.617.69 Before CIT Appeals

Income Tax AY 2004-05 Reassessment & 2009-10

11. In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to a financial institution.

12. The company has not granted any loans or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the company is not a chit fund or a nidhi mutual fund /society.

14. In our opinion, the company is not dealing in shares, securities, debentures or other investment. Hence, the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) Order 2003 are not applicable.

15. In our opinion, the company has not given any guarantee for loans taken by others.

16. In our opinion, the company has taken loan for purchase of Vehicles during the year.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investments. No long term funds have been used to finance short term assets except permanent working capital.

18. The company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. 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 ATUL DALAL&CO.

CHARTERED ACCOUNTANTS

(Firm Reg. No.100760W)

ATUL J. DALAL

Place : Ahmedabad PROPRIETOR

Date : 25-08-2012 MEM. NO.14665

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Mar 31, 2009

We have audited the attached balance sheet of B. Nanji Enterprises Limited as at March 31, 2009, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date Annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 amount and disclosures in financial statements, An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956,and on the basis of such checks and verification as were considered necessary, we report, in annexure a statement on the matters wherever applicable as specified in paragraph 4 & 5 of the said Order.

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

1) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit except

(A) for legal cases filed against the company by workers and previous management of Supreme Conchem Ltd., its Bankers, and other parties for land buyer/seller and others.

2) 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.

3) The balance sheet, profit & loss account and cash flow statement dealt with by this report are in agreement with the books of accounts.

4) The balance sheet, the profit & loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, except:

(a) Note 1 regarding non provision of Bonus, Gratuity and Leave encashment being accounted cash basis which is not in conformity with As-15, Accounting standards for Retirement benefits to employees, issued by the Institute of Chartered Accountants of India.

(b) Note No.2 regarding Non Provision of Income Tax Demand of Rs. 14184063

(c) Note No. 3 regarding non provision of VAT and Service Tax Liability, amount of which is not determined.

(d) Note No. 5 regarding non provision for diminution in the value of investments over cost, which is not in compliance with AS-13 Accounting Standard for Investments.

(e) Note No. 6 regarding non provision of Income Tax liability including of deferred tax liability for the year and for earlier year.

5) On the basis of written submission received from directors as on 31-3-2009 and taken on record by the Board of Director, we report that none of the director is disqualified as on 31-3-2008 from being appointed as a director of the company as required u/s274 (1) (g) of the Companies Act, 1956

6) In our opinion, and to the best of our information and explanations given to us, the said accounts, together with the documents annexed thereto and subject to:

(a) Accounting policy as stated in policy no.3 of Significant Accounting Policies pertaining to accounting of purchase/sale of land without execution of legal document.

(b) Note No. 1 regarding non provision of gratuity liability, amount of which is not ascertained.

(c) Note no. 2 regarding non provision of Income Tax Liability of Rs. 14184063

ANNEXURE TO THE AUDIT REPORT

1. (a) Preparation of records of fixed assets are under process.

(b) All the assets have been physically verified by management at the end of the year which in our opinion, is reasonable having regard to the size and nature of its business. We have been informed that no material discrepancies were noticed on such verification.

(c) During the year no major assets have been disposed off by the company.

2. (a) Inventory has been physically verified by the management during the year, in our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of 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 has maintained records but not properly of inventory, hence we could not opine whether discrepancies noticed on verification between the physical stocks and book records were material or not.

3. (a) Company has taken interest free loans from 2 directors & from a company covered in the register maintained u/s 301 of the CompaniesAct, 1956. The maximum amount involved during the year was Rs.383.61 lacs and the year end balance of loans taken from such parties was Rs 97.72 lacs. There are 7 parties covered in the register maintained u/s 301 of the companies Act, 1956 to which the company has granted free loans. The maximum amount involved during the year was Rs.667 73 lacs and the years and balance of loans granted to such parties was Rs.408.55 lacs.

(b) In our opinion, the terms and condition on which such loans were taken/granted to companies, firms and other parties listed in the register maintained u/s 301 of the Companies ACT. 1956 are ,not prima-facie, prejudicial to the interest of the company.

(c) As no repayment schedule has been fixed for loans taken/granted the same have not been repaid / recovered.

(d) As no repayment schedule has been fixed for loans taken/granted , we could not opine whether there is any overdue amount of loan taken from or granted to the parties / companies, firms or any other parties listed in the register maintained u/s301 of the company Act, 1956.

4. In our opinion and according to the information and explanations given to us there is no adequate internal control procedure commensurate with the size of the company and nature of its business regard to purchases of inventory, fixed assets, sale of goods and services. During the course of our audit, we have not observed continuing failure to correct major weaknesses in internal controls.

5. (a) In absence of the records/registers made available to us maintained u/s 301 of the Companies Act, 1956,we are not in a position to opine whether the transactions that need to be entered into the register maintained u/s 301 of the companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us There are no transactions made in pursuant to contract to be entered into the register maintained u/s 301 of the companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of sec.58A& 58AAof the companies Act. 1956 and rules framed there under.

7. Company has not yet introduced internal audit system.

8. According to the information and explanations given to us. Central Government has not prescribed the maintenance of cost accounting records u/s 209(1) (d) of the companies Act, 1956.

9. Company is not regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, wealth tax. cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax and cess were in arrears, as at 31-3-2009 for a period of more than six months from the date become payable .

According to the information and explanations given to us there the disputed dues of income tax that have not been deposited on account of matter pending before respective authorities are as under.

Name of Statute Nature of Amount Forum where Dues involved dispute is pending Rs. In lacs

Income Tax Act, 1961 Regular Rs.141.84 Before C.I.T. Appeals AY 2005-06

11. In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to a financial institution.

12. The company has not granted any loans or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the company is not a chit fund or a nidhi mutual fund /society.

14 In our opinion, the company is not dealing in shares, securities, debentures or other investment. Hence, the provisions of clause 4 (xiv) of the Companies (auditors Report) Order 2003 are not applicable.

15. In our opinion, the company has not given any guarantee for loans taken by others

16. In our opinion, the company has taken term loan during the year.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investments. No long term funds have been used to finance short term assets except permanent working capital.

18. The company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. 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.

FORATULDALAL&CO. CHARTERED ACCOUNTANTS

Place : AHMEDABAD

Date : 18/08/2009 ATUL J. DALAI-

PROPRIETOR MEM. N0.14665