Jai Realty Ventures Auditors Report

INDEPENDENT AUDITORS

To the Members of Jai Realty Ventures Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Jai Realty Ventures Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, 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 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 principles generally accepted in India, including accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act").This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

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

Opinion

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

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

Emphasis of Matter

We draw our attention to the Note 21 of financial statements, regarding preparation of financial statements on going concern basis even though the Company continued to incur losses and its accumulated losses as at 31.03.2013 are more than its Shareholders funds since the holding company has confirmed its willingness to provide the necessary financial support. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 ("the Order") issued by the

Central Government of India in terms of Sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

For Chaturvedi & Shah

Chartered Accountants

(Firm Registration No. 101720W)

R. Koria

Partner

Membership No.: 35629

Place: Mumbai

Date: 2^nd May, 2013

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT

(Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date to the members of Jai Realty Ventures Limited on the accounts for the year ended 31^st March 2013 )

(i) In respect of its fixed assets:

The Company does not have any fixed assets, hence the provisions of Clause (i) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(ii) In respect of its inventories:

The Company does not have any Inventories, hence the provisions of Clause (ii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(iii) In respect of loans, secured / unsecured, granted or taken by the company to / from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :-

(a) According to the information and explanations given to us, The Company has granted interest free unsecured loans to 3 wholly owned subsidiaries Companies. In respect of said loans the maximum amount outstanding at any time during the year was Rs. 29,30,80,017/- and year- end balance was Rs. 29,26,70,323/-.

(b) In our opinion and according to the information and explanations given to us, the aforesaid loans are interest free and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The aforesaid outstanding interest free loan was not due for repayment hence the question of overdue amount does not arise.

(d) The company has taken unsecured loan from its holding company. In respect of such loan the maximum amount outstanding at any time during the year was Rs. 3,93,92,22,472/- and year- end balance was Rs. 3,93,92,22,472/-.

(e) According to information and explanations given to us, the aforesaid loan is interest free and other terms and conditions are not, prima facie, prejudicial to the interest of the Company.

(f) The above interest free loan was not due for repayment and hence the question of overdue amount does not arise.

(iv) In our opinion and according to the information and explanations given to us the Company has not purchased any inventory and fixed assets and sold any goods or services during the year, hence the provisions of clause (iv) of the paragraph 4 of the Companies (Auditor’s Report) order, 2003, are not applicable to the Company.

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

(vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public. hence, the provisions of Clause (vi) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(vii) As the company is not listed on any stock exchange or the paid up capital and reserve as at the Commencement of the financial year did not exceed Rupees fifty lacs or average annual turnover for a period of three consecutive financial years immediately preceding the financial year did not exceed rupees Five crore, the provisions of clause (vii) of the paragraph 4 of the Companies (Auditor’s Report) order 2003 are not applicable to the Company.

(viii) The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of activities carried on by the Company, hence, the provisions of Clause (viii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(ix) According to the information and explanation given to us. in respect of statutory and other dues:

(a) The Company has generally been regular during the year in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax and Cess and other material statutory dues, as applicable, with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31^st 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 sales tax, Income tax, Custom duty, Wealth tax, Service tax and excise duty, cess as applicable, which have not been deposited on account of any dispute.

(x) The Company has accumulated losses at the end of the financial year. The Company has incurred cash losses during the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, the Company has not taken any borrowings from financial institutions, banks or debenture holders, hence the provisions of Clause (xi) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi mutual benefit fund/society. Hence, the provisions of Clause (xiii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(xiv) The Company has maintained proper records of transactions for investment in Equity Shares and other investments and timely entries have been therein. All investments have been held by the Company in its own name.

(xv) As per the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, hence the provisions of Clause (xv) of paragraph 4 of the Companies (Auditor’s Report) Order 2003 are not applicable to the Company.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the company has not taken any term loan.

(xvii) On review of utilization of funds based on an overall examination of the Balance Sheet of the Company as at 31^st March, 2013, we report that prima facie, funds raised on short-term basis have not been utilized for long term investment.

(xviii) During the year, the Company has not made preferential allotment of shares to the parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any Debentures during the year.

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

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.