1.  We have audited the annexed Balance Sheet of Anant Raj Industries
 Limited as on March 31, 2011, the Profit and 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 Company''s
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement.  An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003, as
 amended by the Companies (Auditors’ Report) (Amendment) Order, 2004,
 [Order], 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 of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us, we give in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in Annexure referred to in paragraph 3
 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 appears from our examination of
 those books.
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 (e) On the basis of written representations received from the directors
 and taken on record by the Board of Directors, none of the directors is
 disqualified as on March 31, 2011 from being appointed as a director in
 the terms of clause (g) of sub-section (1) of section 274 of the
 Companies Act, 1956.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements read
 together with accounting policies and notes thereon and attached
 thereto give in the prescribed manner the information required by the
 Companies Act,
 
 1956, 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 March 31, 2011;
 
 ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditor’s Report
 
 [Referred to in paragraph 3 of the Auditors’ Report of even date to the
 Members of Anant Raj Industries Limited on the Financial Statements for
 the year ended March 31, 2011]
 
 i) In respect of fixed assets:
 
 a) The Company is maintaining proper fixed assets records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) The fixed assets were physically verified by the management at
 reasonable intervals during the previous year and no material
 discrepancies were noticed on such verification as compared to book
 records.
 
 c) In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 ii) In respect of inventories:
 
 a) The inventory includes land, buildings, construction
 work-in-progress, construction and development material, development
 rights, raw materials, stores and spares and finished goods were
 physically verified by the management at reasonable intervals during
 the year. The verification of raw materials lying in loose form like
 clay was carried out based upon parameters of volume and weight.
 
 b) In our opinion, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material and have been properly dealt with in
 the books of account.
 
 iii) The Company has neither granted nor taken any loans, secured or
 unsecured, to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods. Further,
 on the basis of our examination of the books and records of the
 Company, and according to the information and explanations given to us,
 we have neither come across nor have been informed of any continuing
 failure to correct major weaknesses in the aforesaid internal control
 systems.
 
 v) In respect of contracts or arrangements referred to in section 301
 of the Companies Act, 1956:
 
 a) According to the information and explanations given to us, the
 transactions made in pursuance of contracts or arrangements that need
 to be entered in the register maintained under section 301 of the
 Companies Act, 1956, have so been entered.
 
 b) Transactions made in pursuance of such contracts or arrangements
 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 public within the
 meaning of sections 58A, 58AA or any other relevant provisions of the
 Companies Act, 1956 and the rules framed there under.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii) According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of cost records
 under clause (d) of sub- section (1) of section 209 of the Companies
 Act, 1956 for the products of the Company.
 
 ix) a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, employees’ state insurance, income tax, sales
 tax, wealth tax, service tax, custom duty, excise duty, cess and other
 statutory dues as applicable with the appropriate authorities except
 for a few instances of slight delay in deposit.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees’
 state insurance, income tax, sales tax, wealth tax, service tax, custom
 duty, excise duty, cess and other statutory dues were outstanding, as
 at March 31, 2011, for a period of more than six
 
 months from the date they became payable. The Company has not charged
 and consequently, not deposited service tax amounting Rs. 597.87 lacs
 on revenue from leasing of immovable property, relying on order dated
 April 18, 2009 of the Hon’ble High Court of Delhi. The Company does not
 consider itself liable to pay service tax as the liability to deposit
 service tax on rental revenues is contractually recoverable from the
 tenants and therefore, the same has not been considered for the purpose
 of this report
 
 c) According to the information and explanations given to us, there are
 no dues of wealth tax, service tax, custom duty, excise duty and cess
 that have not been deposited with appropriate authorities on account of
 dispute. There are dues of income tax, sales tax and value added tax
 that have not been deposited with appropriate authorities on account of
 dispute. The forum where the disputes are pending are given below:
 
 
 Name of          Nature of         Amount      Period to
 the              dues                 Rs.          which
 Statue                                            amount
                                                  relates
  
 Haryana          Sales tax      8,550,807*       2002-03
 General Sales
 tax Act, 1973
 
 Haryana          Value added   13,164,978*       2003-04
 Value Added      tax 
 Tax Act, 2003
 
 Income tax       Income tax      27912346#       1997-98
 Act, 1961                                   
                                                  1998-99
 
                                                1999-2000
 
 
 Name of          Forum where dispute        Present status as on the
 the              is pending                 date of this Report
 statue
 
 Haryana          Hon''ble High Court of      Writ petition filed by 
 General sales    the Punjab & Haryana,      Company is pending
 tax Act, 1973    Chandigarh                 before the Hon''ble High
                                             Court of Punjab & 
                                             Haryana, Chandigarh
 
 Haryana          Hon''ble High Court of      Writ petition filed by 
 Value Added      Punjab & Haryana,          Company is pending before 
 Tax Act, 2003    Chandigarh                 the Hon''ble High Court of 
                                             Punjab & Haryana, 
                                             Chandigarh
 
 Income tax       Hon''ble High Court         Appeal filed by the Company
 Act, 1961        of Delhi                   is pending before the
                                             Hon''ble High of Delhi
 
 * Amounts are net of payments made and without considering interest for
 the overdue period, if any, as may be levied if demand as raised is
 upheld.
 
 # Excluding interest and additional tax.
 
 x) The Company has no accumulated losses as at the end of the year and
 it has not incurred any cash losses during the financial year covered
 by our audit and in the immediately preceding financial year.
 
 xi) According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to its Bankers.
 
 xii) According to the information and explanations given to us, 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) The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/ societies are not applicable to the
 Company.
 
 xiv) According to the information and explanations given to us, the
 Company does not deal or trade in shares, securities or debentures.
 Proper records have been maintained of the transactions and contracts
 in respect of the investments made by the Company.  The investments are
 held by the Company in its own name.
 
 xv) According to the information and explanations given to us, the
 Company has given Corporate guarantees of Rs. 160 Crores to banks to
 secure the credit facility extended by the banks to its 2 (two)
 subsidiary companies, against which outstanding amount as at March 31,
 2011 is Rs. 1,000.34 lacs.
 
 xvi) In our opinion and according to the information and explanations
 given to us, term loans have been applied for the purpose for which
 they were obtained.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, no funds
 raised on a short term basis have been used for long term investment.
 
 xviii) According to the information and explanations given to us, the
 Company has not made any preferential allotment of equity shares to
 parties or companies covered under 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. The funds raised through issue of global depository receipts
 are being utilized for the purpose for which they were raised.
 
 xxi) During the course of our examination of the books and record of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 
 B. Bhushan & Co.  
 Chartered Accountants 
 By the hand of
 
 Kamal Ahluwalia
 Partner
 Membership no. 093812
 Firm Regn. No.:001596N
 
 117, New Delhi House 
 Barakhamba Road 
 New Delhi.
 
 May 28, 2011