Brigade Enterprises

1.  We have audited the attached Balance Sheet of BRIGADE ENTERPRISES
 LIMITED, as at 31st March, 2009 and also the Profit & Loss Account and
 the Cash Flow Statement for the period 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 (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, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order.
 
 4.  Further to our comments in the 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 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 such
 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 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, we report that none of
 the Directors of the Company are disqualified as on 31st March, 2009
 from being appointed as Directors of the Company under Clause (g) of
 sub section (1) of Section 274 of Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the accounts together with the notes
 thereon give the information required under 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:
 
 i) In the case of Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2009 .
 
 ii) In the case of Profit and Loss Account, of the Profit for the
 period ended on that date.
 
 iii) In the case of Cash Flow Statement of the Cash flows for the
 period ended on that date.
 
 ANNEXURE TO AUDITORS REPORT
 
 Annexure referred to in paragraph 3 of the Auditors’ Report to the
 members of Brigade Enterprises Limited on the accounts for the period
 ended 31st March, 2009.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of Fixed
 Assets.
 
 (b) All the fixed assets have been physically verified by the
 management during the period and no material discrepancies were noticed
 on such verification.
 
 (c) During the period, the Company has not disposed off any substantial
 part of its Fixed Assets that would affect the Going Concern assumption
 of the Company.
 
 (ii) (a) The Inventory has been physically verified at reasonable
 intervals during the period by the management. In our opinion, the
 frequency of verification is reasonable.
 
 (b) 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 inventories.  The
 discrepancies noticed on verification between physical stock and book
 stock was not material.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has neither granted nor taken any loans, secured or
 unsecured from the companies, firms and other parties mentioned in the
 Register maintained under Section 301 of the Companies Act, 1956 (b)
 Since the Company has neither granted nor taken any loans, the
 provisions of Clause (iii)(b), (iii)(c), (iii)(d), (iii)(e), (iii)(f),
 (iii)(g), of the Order are not applicable to the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, with regard to purchase of inventory, fixed assets and for
 the sale of goods. During the course of audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 system.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions that need to be entered into a
 register in pursuance of Section 301 of the Companies Act, 1956 have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the period have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) According to the information and explanations given to us, the
 Company has not accepted deposits from public and hence the directives
 issued by the Reserve Bank of India and the provisions of Sections 58A
 and 58AA or any other relevant provisions of the Act and the rules
 framed there under, are not applicable to the Company.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) According to the information and explanations given to us, the
 Central Government has not prescribed maintenance of cost records and
 hence the provision of Clause 4(viii) is not applicable.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, the Company is generally
 regular in depositing with appropriate authorities undisputed statutory
 dues including Employee Provident Fund, Employees State Insurance
 Scheme, Income-Tax, Sales-Tax, Service Tax, Wealth-Tax, Customs Duty,
 Excise Duty, Cess and any other statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income-Tax, Sales-Tax,
 Wealth-Tax, Service Tax, Customs Duty, Excise Duty, Cess were in
 arrears, as at 31st March, 2009 for a period of more than six months
 from the date they became payable.
 
 (c) According to the information and explanations given to us, the
 particulars of Income-Tax, Sales-Tax and Service Tax as at 31st March,
 2009, which have not been deposited on account of a dispute pending are
 as under:
 
 Name of the          Nature of Dues                        Amount (Rs.)
 Statute
 Service Tax     Service Tax on Import of Services           1,04,36,073
 Value Added Tax VAT liability on account of incorrect      47,83,85,764
 computation
                                                             6,04,55,776
                                                            10,84,48,519
 Income Tax Act  Disallowance of Deduction under               94,84,818
                      Section 80IB(10)
 
 Period to which the amount           Forum where dispute is
 relates                                      pending
 
 For the period from 1st July,        Customs, Excise and Service
 2004 to 28th February, 2006            Tax Appellate Tribunal
 For Asessment year 2005-06           Pending with Commissioner
                                             (Appeals)
 For Assessment year 2006-07
 For Assessment year 2007-08
 For Assessment year 2006-07          Pending with Commissioner
                                             (Appeals)
 
 (x) In our opinion, the Company has no accumulated losses and the
 Company has not incurred cash losses during the financial period
 covered by our audit and the immediately preceding financial period.
 
 (xi) 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 or bank or debenture holders.
 
 (xii) In our opinion, the Company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities. Hence, maintenance of records is not
 applicable.
 
 (xiii) In our opinion, the Company is not a chit fund or nidhi mutual
 benefit fund / society and therefore, the provisions of Clause 4(xiii)
 of the Order are not applicable to the Company.
 
 (xiv) According to the information and explanations provided to us, the
 Company is not dealing in or trading in shares, securities, debentures
 and other investments and accordingly, the provisions of Clause 4(xiv)
 of the Order are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institution and accordingly provisions of Clause 4(xv) of
 the Order are not applicable to the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, on an overall basis, the term loans 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 report
 that funds raised on short-term basis have not 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 shares during the
 period to parties and companies covered in the register maintained
 under Section 301 of the Act and therefore, the provisions of Clause
 4(xviii) of the Order are not applicable to the Company.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any debenture and therefore, the provisions of
 Clause 4(xix) of the Order are not applicable to the Company.
 
 (xx) In our opinion, in respect of the monies raised by the Company by
 way of public issue during the year, the management has disclosed the
 end use of money raised by public issues as a part of Notes to Accounts
 and the same has been verified.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 period under review.
 
                              For Narayanan, Patil and Ramesh
                                        Chartered Accountants
 
                                              L. R. Narayanan
 Place: Bangalore,                                    Partner
 Date: May 26, 2009                  Membership No. 200/25588