1 We have audited the attached Balance Sheet of D.S. Kulkarni
 Developers Limited as at the 31st March 2011, the Profit and Loss
 Account and also the Cash Flow Statement of the Company for the year
 ended on that date, both 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 the auditing standards
 generally accepted in India. These 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 the 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, and the
 Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the
 Central Government of India in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose, on the basis of our opinion, our
 examination of the relevant records and according to the information
 and explanations given to us, in the Annexure a statement on the
 matters specified in Paragraphs 4 and 5 of the said Order.
 
 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 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 Profit and Loss Account and the Cash Flow
 Statement of the Company dealt with by this Report are in agreement
 with the books of account;
 
 (iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the 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 at 31st March, 2011, and taken on record by the Board of
 Directors, we do hereby certify that none of the directors of the
 Company as on 31st March 2011is disqualified under Section 274(1) (g)
 of the Companies Act, 1956 on the said date for being appointed as a
 director in the aforesaid Company;
 
 (vi) We cannot, as required by S.227(3)(g) of the Companies Act, 1956,
 state whether the cess payable u/s 441A of the Companies Act, 1956, has
 been paid and, if not, the details of the amount of cess not so paid
 because the Central Government has not, till the date of this report,
 notified u/s 441A(1) the amount of cess payable u/s 441A(2) and has not
 specified u/s 441A(4) the manner in which the said cess is to be paid.
 
 (vii) In our opinion, to the best of our information and according to
 the explanations given to us, the said accounts, read with the notes
 thereon, give the information required by 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:
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at the 31st March 2011;
 
 b) In the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 c) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Annexure Referred to in Paragraph 3 of Our Report of Even Date on the
 Accounts of D.S. Kulkarni Developers Limited For the Year Ended 31st
 March 2011.
 
 (i) (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the assets have not been physically verified by the management
 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.
 
 (c) The contents of Paragraph 4(i)(c) of CARO, 2003 are not applicable
 since the company has not disposed of a substantial part of its fixed
 assets.
 
 (ii) (a) Physical verification of inventory has been conducted by the
 management at reasonable intervals during the year.
 
 (b) The procedures of physical verification of inventories 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 the book records were not material and have been properly dealt with
 in the books of account.
 
 (iii) (a) The company has not granted loans, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. 
 
 (b) The company has not taken loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.
 
 (iv) There are adequate internal control system 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 real estate, goods and
 services. We have not observed any continuing failure to correct major
 weaknesses in internal control system.
 
 (v) (a) The transactions made in pursuance of contracts or
 arrangements, that need to be entered into the register maintained
 under Section 301, of the Companies Act, 1956 have been recorded in the
 register;
 
 (b) The transactions referred to under sub clause (a) above, which
 exceed Rs. 5,00,000/- in each case have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vi) The Company has complied with the provisions of Section 58A,
 Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules,
 1975 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 in this regard.
 
 (vii) The company has an internal audit system, which, in our opinion,
 is commensurate with its size and nature of its business. 
 
 (viii) Maintenance of cost records has not been prescribed by the
 Central Government under clause (d) of sub-section (1) of section 209
 of the Companies Act, 1956.
 
 (ix) (a) The company is generally regular in depositing undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employees'' State Insurance, Sales-tax, Wealth Tax,
 Service tax, Customs Duty, Excise Duty, cess and other statutory dues
 with the appropriate authorities.
 
 (b) There are no disputed amounts outstanding in respect of Sales Tax /
 Wealth tax / Service tax / Customs Duty / Excise Duty / Cess as at the
 last day of the Financial year. The disputed amounts in respect of
 Income tax are as follows
 
 Sr.  Amount in                                             Assessment
 
                     Forum where dispute is pending 
      Rs. Lacs                                                  Year
 
 1       22.25       Income Tax Appellate Tribunal            2004-05
 
 2      10.00        Income Tax Appellate Tribunal            2005-06
 
 3       7.14        Commissioner of Income Tax (Appeals)     2006-07
 
 4     197.80        Commissioner of Income Tax (Appeals)     2007-08
 
 5     209.44        Commissioner of Income Tax (Appeals)     2008-09
 
       446.63
 
 (x) The company has no accumulated losses at the end of the financial
 period and has not incurred any cash losses during the period and in
 the preceding year.
 
 (xi) The company has not defaulted in repayment of dues to any
 financial institution or bank. The company has no debenture holders.
 
 (xii) The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities
 and therefore the question of maintenance of documents and records in
 respect thereof does not arise.
 
 (xiii) The company is not a chit fund, nidhi, mutual benefit / society.
 
 (xiv) The company is not dealing in shares, debentures and other
 securities and hence the question of maintenance of proper records of
 the transactions and contracts does not arise.
 
 (xv) The company has given guarantee of Rs. 108.84 crores for a loan
 taken by its subsidiary.
 
 (xvi) During the year under review the company has applied the term
 loans obtained during the period for the purpose for which the said
 loans were obtained
 
 (xvii) During the year under review the company has not used for long
 term investment the funds raised on short term basis.
 
 (xviii) During the year under review, the company has not made
 preferential allotment of shares to parties and companies covered in
 the Register maintained under section 301 of the Companies Act, 1956.
 
 (xix) The company has no debentures.
 
 (xx) During the year under review the company has not raised any money
 by public issue.
 
 (xxi) During the year under review no fraud on or by the Company has
 been noticed or reported.
 
 For Gokhale, Tanksale & Ghatpande
 
 Chartered Accountants
 
 Firm Registration No. 103277W
 
 S. M. Ghatpande
 
 Partner
 
 Membership No. 30462
 
 Place : Pune.
 
 Date : 10th May, 2011