To,

The Members of D. S. Kulkarni Developers Ltd.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements ofD. S. Kulkarni Developers Ltd. which comprise the a) Balance Sheet as at the 31st March 2016 b) Statement of Profit and Loss for the year ended on that date c) Cash Flow Statement for the year ended on that date, and d) A summary of significant accounting policies and other explanato ry information.

Management 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 and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of theCompanies (Accounts) Rules, 2014.

This responsibility also includes a) 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; b) selection and application of appropriate accounting policies; c) making judgments and estimates that are reasonable and prudent; and d) design,implementationandmaintenanceofadequateinternalfinancialcontrols, 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 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 thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to free from material misstatement. An obtainreasonableassuranceabout whether the financial audit involves performing procedures to obtain audit evidence about the amounts and the 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 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a) in the case of the standalone balance sheet, of the state of affairs of the Company as at 31st March, 2016

b) in the case of the standalone statement of profit & loss, of the profit of the Company for the year ended on that date.

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

Report on other legal and regulatory requirements

a) As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of Section 143(11) of the Companies Act, 2013, we enclose, on the basis of our opinion, our examination of the relevant records and according to the information and explanation given to us, in the "Annexure A" a statement on the matters specified in Paragraphs3 and 4 of the said Order.

b) As required by Section 143(3) of the Act, we report that

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

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

iii The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account statements comply with the Accounting Standards

iv Inouropinion,theaforesaid standalone financial specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

v On the basis of the written representations received from the directors as on31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

vi With respecttotheadequacyoftheinternal financial reporting of the controlsover Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

vii 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:

a) the Company does not have any pending litigations which would i mpact its financial position

b) the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

c) there has been no delay on the part of the Company in transferring amounts, required to be transferred, to the Investor Education and Protection Fund

For Gokhale, Tanksale & Ghatpande,

Firm Registration No: 103277W

Chartered Accountants

S. M. Ghatpande

Partner

Membership No. 30462 Place: Pune Date: 24th May 2016

"Annexure A" Referred to in Paragraph a) under the heading "Report on other legal and regulatory requirements" of Our Report of Even Date

(i) Fixed Assets

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets during the financial year under review.

(b) The management has not physically verified all the fixedassets during the year but there is a regular programme of verification which is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification during the financial year under review.

(c) The title deeds of immovable properties owned by the Company are held in the name of the company

(ii) Inventories

The management has conducted physical verification of inventories at reasonable intervals during the year. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

(iii) Loans granted to related parties

(a) The Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained u/s 189 of the Act. The number of parties and amount involved in the transactions is as follows: -

Number of Parties Amount of loans given Balance ( Rs. Lacs)
31-Mar-16 31-Mar-15
Two (Two) 10,544.06 9,471.31

(b) The rate of interest and other terms and conditions of loans, secured or unsecured, granted by the Company, are not, prima facie, prejudicial to the interest of the Company;

(c) In respect of the loans, secured or unsecured, given by the Company, the terms of repayments of the principal amount and the payments of the interest have not been stipulated. Hence no repayment can be said to be overdue. However, the Company has made provision for loans whose recovery may be doubtful.

(iv) Compliance with S. 185 & S. 186

The Company has made investments, granted loans, offered guarantee and security in complaince with the provisions of section 185 & section 186 of CA, 2013 .

(v) Deposits

The Company has complied with the provisions of Sections 73-76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and the Reserve Bank of India Directives in the matter of acceptance of deposits from the public. No Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard.

(vi) Cost Records

The Company has maintained cost records as required by the Companies (Cost Record &Audit), 2014 prescribed by the Central Government u/s 148(1) of the Act.

(vii) Payment of statutory dues

(a) There have been instances of delay in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protaction Fund, Employees’ State Insurance, TDS, Income-tax (except advance tax), Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, cess and other material statutory dues applicable to it.

The amount of undisputed statutory dues outstanding on 31/03/2016 is Rs.17.14 crores. There are no arrears of outstanding undisputed statutory dues (except advance tax of approximately Rs. 4.39 crores) as at the last day of the financial year for a period of more than six months from the date those became payable.

(b) There are no disputed amounts outstanding in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, cess and other material statutory dues applicable to it as at the last day of the Financial year. The disputed amounts in respect of income tax are as follows:

Rs. Lacs
Sr. No. Forum where dispute is pending Assessment Year 31-Mar-16 31-Mar-15
1 High Court of Judicature, Mumbai 2004-05 67.25 67.25
2 High Court of Judicature, Mumbai 2005-06 152.02 152.02
3 High Court of Judicature, Mumbai 2006-07 311.45 311.45
4 High Court of Judicature, Mumbai 2007-08 418.80 418.80
5 High Court of Judicature, Mumbai 2008-09 116.00 116.00
6 High Court of Judicature, Mumbai 2009-10 156.93 156.93
7 Income Tax Appellate Tribunal 2010-11 99.95
High Court of Judicature, Mumbai 2010-11 99.95
8 Commissioner of Income Tax (Appeals) 2011-12 35.47
Income Tax Appellate Tribunal 2011-12 35.47
9 Commissioner of Income Tax (Appeals) 2012-13 40.40
Income Tax Appellate Tribunal 2012-13 40.40
Total 1,398.27 1,398.27

The ITAT Pune decided the Company’s appeals for AY 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 in favour of the Company. However, the Dept has filed a reference with the High Court of Judicature at Mumbai. The Company expects that the ITAT Pune will decide similarly the Company’s appeals for AY 2010-11, 2011-12 &2012-13 in favour of the Company. Against these contingent liabilities the Company paid Rs. 903.53 lacs. However, after the decision of the ITAT in the Company’s favour, the Company received a refund of Rs. 726.24 lacs.

(c) During the year under review, the Company has transferred Rs. 269,914/- to the Investor Education and Protection Fund in accordance with the provisions of section 124(5) the Companies Act, 2013 and Rule 4 of the Companies (Declaration & Payment of Dividend) Rules 2014, made thereunder

(viii) Default in repayment of bank loan

The Company has not defaulted in repayment of dues to debenture holders. The Company has delayed by a short period repayment of dues to financial institutions and banks during the year. However, the lending institutions have confirmed that as at the date of this report the respective accounts are classified as standard.

(ix) Application of proceeds of term loans / public offer

The company has applied the term loans obtained during the year towards the purpose for which the loans were obtained. During the year under review, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments).

(x) Fraud

The contents of Paragraph 3(x) of CARO, 2016 are not applicable since no material fraud on or by the Company has been noticed or reported during the financial year under review.

(xi) Managerial remuneration

The Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act 2013

(xii) Nidhi Company

The contents of Paragraph 3(xii) of CARO, 2016 are not applicable since the Company is not a Nidhi Company.

(xiii) Related party transactions & compliance with S.177 & 188

All the transactions with related parties are in compliance with Sections 177 & 188 of the CA 2013 and details thereof have been disclosed in the financial standards.

(xiv) Preferential allotment / private placement of shares or convertible debentures & compliance with S 42

The contents of Paragraph 3(xiv) of CARO, 2016 are not applicable since the Company has not made preferential allotment or private placement of equity shares or fully or partly-paid convertible debentures during the year under review.

(xv) Non-cash transactions with directors etc. & compliance with S.192

The contents of paragraph 3(xv) of CARO 2016 are not applicable since

(a) the directors have not entered into any arrangement for acquiring any assets from the company for a consideration other than cash during the financial year underreview.

(b) the company has not entered into any arrangement for acquiring any assets from the directors for a consideration other than cash during the financial year under review.

(xvi) Compliance with S.45IA of RBI Act

The contents of paragraph 3(xvi) are not applicable since the company is not required to register itself with RBI under section 45IA of the RBI Act.

For Gokhale, Tanksale & Ghatpande

Firm Registration No: 103277W

Chartered Accountants

S. M. Ghatpande

Partner

Membership No. 30462

Place: Pune

Date: 24th May 2016

"Annexure B" Referred to in Paragraph (b)(vi) under the heading "Report on other legal and regulatory requirements" of Our Report of Even Date

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

We have audited the internal financial controls over Company") as of 31st March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’).

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and its operating effectiveness. over financial reporting included obtaining anunderstandingofinternal financialreporting, controlsover assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over assurance regarding the reliability of financial reporting purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and proceduresthat

(a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

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

For Gokhale, Tanksale & Ghatpande

Firm Registration No: 103277W

Chartered Accountants

S. M. Ghatpande

Partner

Membership No. 30462

Place: Pune

Date: 24th May 2016