We have audited the attached balance sheet of KAMA Holdings Ltd., as at
 31st March 2011, and also the profit and loss account and the cash flow
 statement for the year ended on that date annexed thereto.
 
 Responsibilities of management These financial statements are the responsibility of the company’s
management.
 
 Responsibilities of auditors Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 Basis of opinion
 
 We conducted our audit in accordance with the 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.
 
 Opinion
 
 As required by the Companies (Auditor’s 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.
 
 Further subject 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, profit and 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 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;
 
 (v) On the basis of written representations received from the
 directors, as on 31st March 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 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) We understand that pursuant to the Core Investment Companies
 (Reserve Bank) Directions, 2011 the company intends to apply for
 registration as Systemically Important Core Investment Company.
 
 (vii) In our opinion and to the best of our information and according
 to the explanations given to us, the said accounts read together with
 the accounting policies and notes thereon give the information required
 by the Companies Act, 1956, in the manner so required 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 31st March 2011;
 
 (b) in the case of the profit and loss account, of the profit 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.
 
 The Annexure referred to in the main Auditors’ Report of even date:
 
 The company is not carrying on the business of chit fund, nidhi, or
 mutual fund, or dealing or trading in shares / securities, hence the
 clauses applicable to these businesses have not been considered below.
 
 Fixed Assets
 
 1.  a.  The company has maintained proper record
 
 showing full particulars including quantitative details and situation
 of its fixed assets. However in respect of office equipment, record in
 terms of values are only kept.
 
 b. The company has a regular program of verifying all the assets over a
 period of three years which in our opinion is reasonable having regard
 to the size of the company and the nature of the assets.
 
 Transactions with parties u/s 301 of the Companies Act, 1956
 
 2.  The company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.
 
 3.  The company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.
 
 4.  There are no contracts or arrangements that were required to be
 entered into the register in pursuance of section 301 of the Act.
 
 
 Loans, Advances and Guarantees
 
 5.  a.  The company has taken loans from banks and
 
 others. The terms and conditions on which these have been taken are not
 prima facie prejudicial to the interest of the company.
 
 b.  The payment of principal and interest are regular in respect of all
 such loans taken.
 
 In view of what is stated in (a) & (b) above, there are no overdue
 amounts.
 
 6.  The company has not issued any debenture.
 
 7.  The company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 However,
 
 8.  The company has stood guarantee for loans taken by KAMA REALTY
 (Delhi) Ltd, its wholly owned subsidiary, from banks or financial
 institutions.
 
 9.  The term loans taken by the company have been applied for the
 purpose for which they were obtained.
 
 10.  The funds raised on short-term basis from the banks have not been
 used for long-term investment and vice versa.
 
 
 Internal Control
 
 11.  a.  In our opinion and according to the information
 
 and explanations given to us, there is an adequate internal control
 system commensurate with the size of the company and the nature of its
 business.
 
 b. There are no continuing failures to correct matters in respect of
 lack of adequacy of internal controls brought to notice.
 
 12.  The company has an adequate internal audit system commensurate
 with its size and nature of its business.
 
 
 Fixed Deposit
 
 13.  In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of section
 58A and 58 AA or any other relevant provisions of the Companies Act
 1956, The Companies (Acceptance of Deposits) Rules, 1975 and directives
 issued by Reserve Bank of India with regard to the deposits accepted
 from the pubic.
 
 
 Statutory Dues
 
 14. a. According to the records of the company, undisputed dues
 including provident fund, Investors Education and Protection fund,
 employees’ state insurance, income tax, sales-tax, wealth tax, service
 tax, custom duty, excise duty, cess and any other statutory dues have
 generally been regularly deposited with the concerned authorities.
 
 b.  Details of dues of disputed income tax after adjusting refunds due
 is given below:
  
 Name of         Forum         Nature of   Period of    Amount
 Statute         where case    dues        dispute     (in Rs.Lacs)
                 is pending
 
 Income          ITAT          Income Tax  AY 2006-07         14.70
 Tax Act,
 1961
 
 Income          CIT           Income Tax  AY 2007-08         65.92
 Tax Act,        (Appeals)
 1961
                                               TOTAL          80.62
 OTHERS
 
 15.  The company has no accumulated losses at the end of the financial
 year. The company has neither incurred cash losses in the current
 financial year nor in the immediately preceding financial year.
 
 However, pursuant to the Scheme of Arrangement approved by the Hon’ble
 High Court under Section 391- 394 of the Companies Act, 1956, certain
 equity and preference shares were issued pursuant to the Scheme.
 
 16.  The company has not issued any fresh share capital and hence the
 question of neither the preferential allotment nor the end use thereof
 arises.
 
 17.  No fraud on or by the company has been noticed or reported during
 the year.
 
                                   For THAKUR, VAIDYANATH AIYAR & CO.
                                               Chartered Accountants
                                                    Reg. No. 000038N
                                                        V. Rajaraman
                                                             Partner
                                                           M.No.2705
 
 Place: New Delhi 
 Date: 30th May 2011