Kolte-Patil Developers

We have audited the attached Balance sheet of KOLTE PATIL DEVELOPERS
 LIMITED, as at 31 st March, 2009 and the Profit and Loss account and
 also the Cash Flow statement of the Company for the period ended on
 that date annexed thereto (all together referred) to the financial
 statement . These financial statements are the responsibility of the
 Companys management.  Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 We conducted our audit in accordance with auditing standard 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 test basis evidence supporting the amount and disclosure
 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.
 
 As required by the Companies (Auditors Report) Order, 2003 issued by
 the Central Government of India in terms of Sub-Sec.(4A) of Sec. 227 of
 The Companies Act, 1956 and according to the information and
 explanation given to us during the course of the audit and on the basis
 of such checks as we considered appropriate, we have enclosed in the
 Annexure a Statement on the matters specified in the Paragraphs 4 and 5
 of the said order, to the extent applicable to the Company.
 
 Further to our comments in Annexure referred to in paragraph 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.
 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 the
 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 accounts;
 
 iv. In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standard referred to in sub-section (3C) of Section 211 of the
 Companies Act. 1956.
 
 v. On the basis of written representation received from the Director,
 as on 31st March, 2009 and taken on record by the Board of Directors,
 we report that none of the director is disqualified as on 31st March,
 2009 from being appointed as 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
 explanation given to us, the accounts read with 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 case of the Balance Sheet, of the state of the companys affairs
 as at 31st March 2009;
 
 b) In case of the Profit and Loss Account of the profit of the Company
 for the period ended on that date, and
 
 c) In the case of Cash Flow Statement, cash flow of the company for the
 period ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 OUR REPORT OF EVEN DATE AND IN TERMS OF THE EXPLANATION* AND THE
 INFORMATION GIVEN TO US AND ON THE BASIS OF SUCH CHECKS AS WE
 CONSIDERED APPROPRIATE, WE FURTHER STATE THAT:
 
 1.  In our opinion and according to the information and explanation
 given to us, the nature of Companys business/activities during the
 year is such that the requirements of clauses (xiii) and (xiv) of
 paragraphs of the Companies (Auditors Report) Order, 2003 are not
 applicable to the Company.
 
 2.  In respect of Fixed Assets :
 
 a.  The Company has maintained proper records showing full particulars
 including quantitative details and situation of Fixed Assets.
 
 b.  As explained to us, the Fixed Assets have been physically verified
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable having regard to the size of the Company
 and nature of its assets. No material discrepancies were noticed on
 such physical verification.
 
 c.  Although some of the Fixed Assets have been sold / disposed of
 during the year, in our opinion and according to the information and
 explanations given to us, the ability of the Company to continue as a
 going concern is not affected.
 
 d.  None of the Fixed Assets has been revalued during the year.
 
 3.  In respect of Inventories :
 
 a.  As explained to us, an inventory of major items of building
 materials and stores has been physically verified by the management at
 reasonable intervals during the year. In our opinion, the frequency of
 such verification is reasonable.
 
 b.  In our opinion and on the basis of the information and explanations
 given to us, the procedures for 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 has maintained proper records of inventory.
 Verification of inventory is being conducted in a phased programme by
 the management designed to cover all inventory, which in our opinion is
 reasonable having regard to the size and the nature of the Company. The
 discrepancies noticed on such verification were not material and have
 been properly dealt with in the books of account.  d. The valuation of
 stocks is fair and proper, and in accordance with the normally accepted
 accounting principles and is on the same basis as in the preceding
 year.
 
 4.  a.  According to information and explanation given to us , the
 Company has taken unsecured loan from parties covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs.  605.54 lakhs and the year end
 balance taken from such parties was Rs. 540.00 lakhs.  The Company has
 granted advances/ loans to parties and to subsidiary companies in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 8684.68 lakhs and the
 year end balance of advances/loans was Rs.5278.40 lakhs.
 
 b.  In our opinion, the rate of interest and other terms and conditions
 on which loan has been taken from a party listed in the register
 maintained under section 301 of the Companies Act, 1956 are not prima
 facie, prejudicial to the interest of the company.  The advances given
 by the Company to wholly owned subsidiary companies and other group
 companies is interest free and the other terms and conditions on which
 advance has been given are not prima facie, prejudicial to the interest
 of the Company,
 
 c.  The Company is regular in repaying the payment of interest in
 respect of loan taken by the Company. In respect of advances given to
 wholly owned subsidiary companies and other group companies, the
 advances are interest free and repayable on demand.
 
 d.  In respect of advances given to employees, wholly owned subsidiary
 companies and other group companies, these are repayable on demand and
 therefore the question of overdue amount does not arise.
 
 5.  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 nature of its business
 with regard to purchase of construction material, fixed assets, and
 with regard to the sale of units.  During the course of our audit, we
 have not observed any continuing failure to correct major weaknesses in
 internal controls.
 
 6.  In our opinion and according to the information and explanations
 given to us, the transactions that needed to be entered in the Register
 in pursuance of Section 301 of the Companies Act, 1956 have been
 entered.
 
 In our opinion and according to the information and explanations given
 to us, there are transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 have been1 made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 7.  In our opinion .and according to the information and explanations
 given to us, the Company has not accepted any deposit from the public
 within the meaning of Section 58A and 58AA of the Companies Act, 1956
 or any other relevant provision of the act and the Companies
 (Acceptance of Deposits) Rules, 1975.
 
 8.  In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 9.  The Central Government has not prescribed maintenance of cost
 records under Section 209(1) (a) of the Companies Ret, 1956, for any of
 the operations of the Company.
 
 10.  The Company is regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, employees state
 insurance, income tax and other material statutory dues applicable to
 it. According to the information andexplanations given to us, no
 undisputed amounts payable in respect of Wealth Tax, Income tax and
 Sales Tax were outstanding as on 31st March, 2009 for period of more
 than six months from the date they became payable.
 
 11.  The Company does not have any accumulated losses at the end of
 financial year and has not incurred cash losses in the financial year
 and in the immediately preceding financial year accordingly, paragraph
 4 (x) of the Order is not applicable.
 
 12.  According to the information and explanation given to us and based
 on our observations during the audit, the Company has not defaulted in
 repayment of dues to any financial institution or bank.
 
 13., The.Company, has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.  Accordingly, paragraph 4 (xii) of the Order is not
 applicable.
 
 14.  According to the information and explanations given to us and the
 representations made by the management, the Company has given guarantee
 for loan taken by other group companies, from bank. However, as one of
 the businesses of the Company is to promote the companies and also
 considering the long term involvement with those companies, the
 guarantee has not been considered prima facie, prejudicial to the
 interest of the Company.
 
 15.  According to the information and explanations given to us and
 representations made by the management, term loans have been applied
 for the purpose for which they were raised
 
 16.  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 raised on short-term basis have been used for long-term
 investment.
 
 17.  According to the information and explanations given to us, 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 and therefore provisions of clause 4 (xviii) of the
 Order are not applicable to the Company.
 
 18.  The Company has not issued any debentures during the year nor were
 any debentures outstanding at the beginning of the year.  Accordingly
 the provisions of Clause (xix) of the Paragraph 4 of the Companies
 (Auditors Report) Order, 2003 are not applicable to the Company.
 
 19.  We have verified the end use of money raised by way of Public
 Issue and Employee Stock Option Plan in previous year 2007-08 as
 disclosed in the note no.26 of Notes to Accounts.
 
 20.  Based upon audit procedure performed for the purpose of reporting
 true and fair view of financial statements and as per the information
 and explanations given by management, which have been relied upon by
 us, we report that no fraud on or by the Company has been noticed or
 reported during the course of audit.
 
 
                                         For S P C M & Associates
                             (Formerly Known as Bora Kasat & Co.)
                                            Chartered Accountants
 
                                                 CA Suhas P. Bora
 Place: Pune                                              Partner
 Date : 30th June, 2009                      Membership No.039765