1.  We have audited the attached Balance Sheet of BSEL Infrastructure
 Realty Limited as at 31 st March, 2011 and also the Profit & Loss
 Account and 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 have 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 mis-statement. 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 Companies (Auditor''s Report) (Amendment) Order, 2004
 (together the ''Order'') issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of
 India (the ''Act'') and on the basis of such checks of the books and
 record 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 the Annexure referred to above, we
 report that:
 
 I.  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.
 
 II.  In our opinion, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of
 those books.
 
 III.  The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 IV.  In our opinion, the Balance Sheet, 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.
 
 V.  On the basis of the written representation received from the
 Directors, as on March 31,2011, and taken on record by the Board of
 Directors, we report that none of the Director is disqualified as on
 March 31, 2011 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956.
 
 VI.  In our opinion and to the best of our information and according to
 the explanations given to us, they said accounts give the information
 required by the Companies Act, 1956,in the manner so required and give
 a true and fair view and are 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 31 st March, 2011.
 
 (b) In the case of the Profit & Loss account, of the Loss for the year
 ended on that date; and
 
 (c) In the case of Cash Flow Statement, of the Cash Flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 I.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) Physical verification has been conducted by the management at
 reasonable intervals in respect of finished goods, stores, spare parts
 and raw materials. The discrepancies noted during the physical
 verification were not material.
 
 (c) Fixed assets disposed off during the year were not substantial and
 therefore do not affect the going concern assumption.
 
 II.  (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (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 inventory and no
 material discrepancies were noticed on physical verification.
 
 III.  (a) The Company has not granted secured or unsecured loans to the
 company which is covered in the register maintained under section 301
 of the Act.
 
 (b) The Company has not granted interest free loan to the parties
 covered in the register maintained under section 301 of The Companies
 Act, 1956, hence the comment on the rate of interest and terms and
 conditions thereon is not required.
 
 (c) The Company has not granted secured or unsecured loans to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act, and there is no repayment schedule
 prescribed, hence the comment on the receipt of the principal and
 interest thereon is not required.
 
 (d) The Company has not granted secured or unsecured loans to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act, and there is no overdue amount which is
 more than rupees one lakh, hence the comment on the overdue amount is
 not required.
 
 (e) The Company has not taken secured/unsecured loans from the Company
 covered in the register maintained under section 301 of the Companies
 Act, 1956.
 
 (f) The Company has not taken interest free loan from the parties
 covered in the register maintained under section 301 of The Companies
 Act, 1956, hence the comment on the rate of interest and terms and
 conditions the it'' on is not required.
 
 (g) The Company has no outstanding secured or unsecured loans to the
 Companies 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 procedures
 commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, no major
 weakness has been noticed in the internal controls in respect of these
 areas.
 
 V.  (a) According to the information and explanations given to us, we
 are of the opinion that particulars of the contracts or agreements that
 need to be entered have been so entered in the registers required to be
 maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 agreements have been made at price which is reasonable having regard to
 the prevailing market price at relevant time.
 
 VI.  The Company has not accepted any deposits from the public.
 
 VII.  In our opinion, the Company has an internal audit system,
 commensurate with its size and the nature of its business.
 
 VIII.  The Central Government has not prescribed maintenance of cost
 records by the Company under section 209 (1) (d) of the Act.
 
 IX.  (a) According to the information and explanations given to us and
 records of the Company examined by us, the Company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investor Education Protection Fund, Employees
 State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom
 Duty, Excise Duty, Cess and other material statutory dues applicable to
 it. According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Service Tax, Customs Duty, Excise Duty and Cess is outstanding at
 the year end for a year 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, Customs Duty, Wealth Tax, Excise Duty,
 Service Tax and Cess which have not been deposited on account of any
 dispute. However, the demand of Rs. 26,424,532/- is demanded for Income
 Tax for Assessment Year 2001-02 by the income tax authorities against
 which appeal has been filed in CIT (Appeal) after payment and refund
 adjustment of Rs.10,569,813/-.
 
 X.  The Company has no accumulated losses at the end of the financial
 year. The Company has incurred cash losses in the current financial
 year as well as incurred cash losses in the immediately preceding
 financial year.
 
 XI.  Based on our audit procedures and on the information and
 explanation given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to financial
 institution, bank or debenture holders.
 
 XII.  According to the information and explanations given to us and
 based on the documents and records produced to us,the Company has not
 granted loans and advances 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. Therefore, the provisions of clause 4 (xiii) of
 The Companies (Auditor''s Report) Order, 2003 as amended by Companies
 (Auditor''s Report) (Amendment) Order, 2004 (together the ''Order'') are
 not applicable to the Company.
 
 XIV.  In our opinion, the Company is dealing in or trading in shares,
 securities, debentures and other investments and proper records have
 been maintained of the transactions and contracts and timely entries
 have been made therein. The shares, securities, debentures and other
 securities have been held by the Company, in its own name.
 
 XV.  To best of our knowledge and belief and according to the
 information and explanation given to us, in our opinion, the terms and
 conditions on which the Company has given guarantee for loans taken by
 others from banks or financial institutions are not prejudicial to the
 interest of the Company.
 
 XVI.  There are no term loans outstanding from any Financial
 Institution from the beginning of the financial year..
 
 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 no funds have been raised on short term basis.
 
 XVIII.  According to information and explanations given to us, the
 Company has not made any preferential allotment of shares to the
 parties and Companies covered in register maintained under section 301
 of the Act.
 
 XIX.  The Company did not have any debentures during the year.
 
 XX.  The Company has not raised any funds by way of public issue during
 the financial year.
 
 XXI.  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 RAJU & PRASAD
 
 Chartered Accountants
 
 FRN NO. 003475 S
 
 Sd/-
 
 CA.Avinash T.Jain
 
 Partner
 
 Membership No. 41689
 
 Place :Mumbai
 
 Date : 30.05.2011