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Auditor Report of Advani Hotels & Resorts (India) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of ADVANI HOTELS & RESORTS (INDIA) LIMITED, ("the Company") which comprise of Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under the Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and 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 those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26 (l) to the financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our report of even date to the members of ADVANI HOTELS & RESORTS (INDIA) LIMITED for the year ended 31st March, 2015. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with a phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies between the books records and physical inventory have been noticed.

2. (a) In our opinion, physical verification of inventories has been conducted by the management at reasonable intervals.

(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 inventories and no material discrepancies were noticed on physical verification.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act, 2013, hence our comments on the receipt of the principal amount and interest and reasonable steps of recovery of the overdue amount are not given.

4. 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, we have neither come across nor have we been informed of any continuing failure to correct any major weaknesses in internal control system.

5. The Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under. We are informed that the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court has not passed any Order.

6. The maintenance of cost records has not been prescribed for any of the products of the Company under sub-section (1) of section 148 of the Companies Act.

7. (a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues, including provident fund, employees' state insurance, income- tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no arrears of undisputed amounts payable in respect of above statutory dues which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, value added tax or cess except the following:

Name of the statute Nature of dues Amount
Central Sales Tax Act, Central Sales tax 12.16 1956

Income-tax Act, 1961 Income-tax on 10.66 completion of regular assessment

Income-tax Act, 1961 Income-tax on 54.47 completion of regular (Rs. 54.18 paid) assessment

Income-tax Act, 1961 Income-tax on 79.78 completion of regular assessment

Income-tax Act, 1961 Income-tax on 89.13 completion of regular assessment

Income-tax Act, 1961 Income-tax on 15.13 assessment of TDS

Customs Act, 1962 Differrential duty on 42.60 equipment imported 49.60 under EPCG Scheme Plus Interest and Penalty

Name of the statute Period to which Forum where the the amount dispute is relates pending

Central Sales Tax Act, 1956 Asst. Year 2005-06 Asst. Commissioner & 2006-07 of Commercial Tax (Value Added Tax)

Income-tax Act, 1961 Asst Year 2005-06 Income-Tax Appellate Tribunal

Income-tax Act, 1961 Asst Year 2010-11 Commissioner of Income-tax (Appeals)

Income-tax Act, 1961 Asst Year 2011-12 Commissioner of Income-tax (Appeals)

Income-tax Act, 1961 Asst Year 2012-13 Commissioner of Income-tax (Appeals)

Income-tax Act, 1961 Asst Years 2005-06 Commissioner of to 2008-09 Income-tax (Appeals)

Customs Act, 1962 2000 Customs, Excise and Service Tax Appellate Tribunal

(c) The Company has transferred to Investor Education and Protection Fund (IEPF) in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under within time.

8. The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the financial year or in the immediately preceding financial year.

9. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks except in respect of an instalment of ^ 25 lakhs, where there was a delay of one month. The Company has not taken any loan from any financial institution and by way of issue of debentures.

10. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. In our opinion on an overall basis and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

12. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G. VERMA & CO.

Chartered Accountants Registration No. 111381W

J.G. VERMA

Partner

Mumbai, May 13, 2015 Membership No. 5005


Mar 31, 2014

We have audited the accompanying financial statements of ADVANI HOTELS & RESORTS (INDIA) LIMITED, ("the Company") which comprise of Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2014;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

MATTER OF EMPHASIS

We draw attention to Note 33.1(c) to the financial statements which describes payment/provision of remuneration of Rs. 1,251,946 to a relative executive of the Company, for which an application for approval has been made to the Central Government under Section 314(1B) of the Act, which is awaited. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 those books;

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(e) On the basis of written representations received from the Directors of the Company, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2014 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in our report to the members of ADVANI HOTELS & RESORTS (INDIA) LIMITED for the year ended 31st March, 2014. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has physically verified its fixed assets during the year in accordance with the a regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed by the Management on such physical verification as compared to book records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. (a) As explained to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination of the inventory records of the Company, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a) to (d) of clause 4 (iii) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Act. Therefore, the provisions of sub-clauses (e) to (f) of clause 4 (iii) of the Order are not applicable to the Company.

4. 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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions to be entered in the register maintained under Section 301 of the Act, have been entered in the register.

(b) According to the information and explanation given to us, the Company has not entered into any contracts/arrangements which need to be entered in the register maintained under Section 301 of the Act, exceeding the value of '' 5 Lakhs in respect of each party during the year under review.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA and other provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause 4 (vi) of the Order is not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Act for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Company''s operations do not give rise to any excise duty liability.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2014 which were outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess except the following:

Name of the Nature of dues Amount statute (Rs. in lakhs)

Central Sales Tax Act, Central Sales tax 12.16 1956

Income-tax Act,1961 Income-tax on 10.66 completion of regular assessment

Income-tax Act, 1961 Income-tax on 54.47 completion of (Rs. 54.18 paid) regular assessment

Income-tax Act, 1961 Income-tax on 78.79 completion of regular assessment

Income-tax Act, 1961 Income-tax on 15.13 assessment of TDS

Name of the Period to which Forum where the statute the amount dispute is relates pending

Central Sales Tax Act, Asst. Years Asst. Commissioner 1956 2005-06 & of Commercial Tax 2006-07 (Value Added Tax)

Income-tax Act,1961 Asst. Year Income-Tax 2005-06 Appellate Tribunal

Income-tax Act, 1961 Asst. Years Commissioner of 2010-11 Income-tax (Appeals)

Income-tax Act, 1961 Asst. Years Commissioner of 2011-12 Income-tax (Appeals)

Income-tax Act, 1961 Asst.Years 2005-06 Commissioner of to 2008-09 Income-tax (Appeals)



10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the financial year or preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks as per loan agreements or extended due dates. There were no borrowings from any financial institutions or by way of debentures.

12. According to the information and explanations given 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.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions.

16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken during the year were applied for the purpose for which the loans were obtained.

17. 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 prima facie, not been used during the year for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year under audit. Accordingly, the provisions of clause (XIX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

20. The Company has not raised money by public issue during the year. Accordingly, the provisions of clause (XX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G. VERMA & CO. Chartered Accountants Registration No. 111381W

J.G. VERMA Partner Mumbai, May 19, 2014 Membership No. 5005


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of ADVANI HOTELS & RESORTS (INDIA) LIMITED, ("the Company”) which comprise of Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2013;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order”), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order

2. As required by Section 227 (3) of the Act, 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 those books;

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956; and

(e) On the basis of written representations received from the Directors of the Company, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March, 2013 from being appointed as a Director under Clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in our Report of even date to the members of ADVANI HOTELS & RESORTS (INDIA) LIMITED on the financial statements for the year ended 31st March, 2013. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has physically verified its fixed assets during the year in accordance with the regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed by the Management on such physical verification as compared to book records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. (a) As explained to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clauses (a) to (d) of clause 4 (iii) of the Order are not applicable to the Company. (b) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clauses (e) to (f) of clause 4 (iii) of the Order are not applicable to the Company.

4. 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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. In our opinion and according to the information and explanations given to us, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section; and (b) the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rupees Five lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause 4 (vi) of the Order is not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Company''s operations do not give rise to any excise duty liability. (b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2013 which were outstanding for a period of more than six months from the date they became payable.

10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the financial year or preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks as per loan agreements or extended due dates. There were no borrowings from any financial institutions or by way of debentures.

12. According to the information and explanations given 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.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions.

16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken during the year were applied for the purpose for which the loans were obtained.

17. 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 prima facie, not been used during the year for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year under audit. Accordingly, the provisions of clause (xix) of paragraph 4 of the aforesaid Order are not applicable to the Company.

20. The Company has not raised money by public issue during the year. Accordingly, the provisions of Clause (xx) of Paragraph 4 of the aforesaid Order are not applicable to the Company.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G. VERMA & CO.

Chartered Accountants Registration No. 111381W

J.G. VERMA

Partner

Mumbai, May 13, 2013 Membership No. 5005


Mar 31, 2012

We have audited the attached Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED, as at 31st March, 2012 and also the Statement of Profit and Loss and 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.

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.

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, and on the basis of such checks as we considered appropriate, we enclose 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:

1. 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.

2. 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.

3. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement, dealt with by this Report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March, 2012 from being appointed as a Director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. 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 significant accounting policies and the other notes appearing on the financial statements stated in the Notes on Financial Statements, 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:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2012;

(ii) in the case of Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has physically verified its fixed assets during the year in accordance with the regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed by the Management on such physical verification as compared to book records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. (a) As explained to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clauses (a) to (d) of clause 4 (iii) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clauses (e) to (f) of clause 4 (iii) of the Order are not applicable to the Company.

4. 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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) there were no such transactions exceeding the value of Rupees five lacs in respect of any party during the year and accordingly our comments on the reasonableness of the prices have not been given.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause 4 (vi) of the Order is not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Company's operations do not give rise to any excise duty liability.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2012 which were outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess except the following: Name of the Nature of dues Amount Period to which Forum where the statute (Rs. in lakhs) the amount dispute is relates pending

Central Sales Tax Act, Central Sales tax 12.16 Asst. Years Asst. Commissioner 1956 2005-06 & of Commercial Tax 2006-07 (Value Added Tax)

Income-tax Act, 1961 Income-tax on 10.66 Asst. Year Income-Tax completion of 2005-06 Appellate Tribunal regular assessment

Income-tax Act, 1961 Income-tax on 15.13 Asst Years 2005-06 Commiss ioner of assessment of TDS to 2008-09 Income-tax (Appeals)

Finance Act, 1994 Service tax 1.76 October 2004 to Commissioner April 2006 (Appeals), Customs, C.Excise and Service Tax

10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the financial year or preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks as per loan agreements or extended due dates. There were no borrowings from any financial institutions or by way of debentures.

12. According to the information and explanations given 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.

13. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions.

16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken during the year were applied for the purpose for which the loans were obtained.

17. 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 prima facie, not been used during the year for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year under audit. Accordingly, the provisions of clause (XIX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

20. The Company has not raised money by public issue during the year. Accordingly, the provisions of clause (XX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G. VERMA & CO.

Chartered Accountants

Registration No. 111381W

J.G. VERMA

Partner

Mumbai, July 10, 2012 Membership No. 5005


Mar 31, 2011

We have audited the attached Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED, as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Company 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.

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.

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, and on the basis of such checks as we considered appropriate, we enclose 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:

1. 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.

2. 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.

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this Report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable Accounting Standards referred to in sub-Section (3-C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March, 2011 from being appointed as a Director under Clause (g) of sub-Section (1) of Section 274 of the Companies Act, 1956.

6. 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 significant accounting policies stated in Schedule "K" and the other notes appearing 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:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2011;

(ii) in the case of Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) During the year under report, the Company has formulated a policy to carry out physical verification of its fixed assets in a phased manner at regular intervals, which in our opinion is reasonable having regard to its size of the Company and nature of fixed assets. The Company has physically verified its fixed assets during the year in accordance with the above policy. No material discrepancies were noticed by the Management on such physical verification as compared to book records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. (a) The inventories have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable;

(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) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 except an interest free advance of Rs. NIL (maximum balance Rs. 96,980,573/-) being amount due on current account from one of its erstwhile subsidiaries, out of which Rs. 25,315,947/- has been written off as irrecoverable against the provision made for the same in the previous year.

(b) The terms and conditions of above interest free advance given were prima facie not prejudicial to the interest of the Company except to the extent indicated in 3(a) above.

(c) According to the information and explanations given to us, there is no stipulation for repayment of the above advance given by the Company to its subsidiary. However, the entire amount except Rs. 25,315,947/- which is considered doubtful by the Management has been recovered during the year.

(d) In view of our comment in paragraph 3 (c) above, clause Ml (d) of paragraph of the aforesaid Order is not applicable to the Company.

(e) The Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In view of the same, our comments on clauses III (f) and (g) of paragraph (4) of the aforesaid Order are not applicable to the Company.

4. 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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section; and (b) such transactions exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Company's operations do not give rise to any excise duty liability.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2011 which were outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess except the following:

Name of the Nature of dues Amount Period to which statute (Rs. in the amount lakhs) relates

Central Sales Central Sales tax 12.16 Asst. Years Tax Act, 1956 2005-06 & 2006-07

Income-tax Act, Income-tax on 10.66 Asst. Year 1961 completion of 2005-06 regular assessment

Income-tax Act, Income-tax on 15.13 Asst Years 1961 assessment of TDS 2005-06 to 2008-09



Name of the statute Forum where the dispute is pending

Central Sales Tax Act, 1956 Asst. Commissioner of Commercial Tax (Value Added Tax)

Income-tax Act, 1961 Income-Tax Appellate Tribunal

Income-tax Act, 1961 Commissioner of Income-tax (Appeals)

10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the financial year or preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company had not defaulted in repayment of dues to banks as per loan agreements or extended due dates. There were no borrowings from any financial institutions or by way of debentures.

12. According to the information and explanations given 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.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company had given a guarantee for loan taken by one of its erstwhile subsidiaries from a bank, the terms and conditions whereof, in our opinion, were not prima facie prejudicial to the interest of the Company. The said guarantee has been extinguished during the year.

16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken during the year were applied for the purpose for which the loans were obtained.

17. 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 prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year under audit. Accordingly, the provisions of clause (XIX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

20. The Company has not raised money by public issue during the year. Accordingly, the provisions of clause (XX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO. Chartered Accountants Registration No. 111381W

J.G. VERMA Partner Membership No. 5005

Mumbai, May 13, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED, as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 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.

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, and on the basis of such checks as we considered appropriate, we enclose 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:

1. 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.

2. 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.

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this Report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. 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 significant accounting policies stated in Schedule "K" and the other notes appearing 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:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2010; (ii) in the case of Profit and Loss Account, of the profit of the Company for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets were physically verified during the year and after the close of the year by the management. No material discrepancies were noticed by the Management on such physical verification as compared to book records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable;

(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) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 except an interest free advance of Rs. 90,908,724/- (maximum balance Rs. 119,416,887/-) being amount due on current account from one of its subsidiaries, out of which Rs. 25,315,947/- is considered doubtful of recovery and provided for.

(b) The terms and conditions of above interest free advance given are prima facie not prejudicial to the interest of the Company except to the extent indicated in 3(a) above.

(c) According to the information and explanations given to us, there is no stipulation for repayment of the above advance given by the Company to its subsidiary. However, the entire amount except Rs. 25,315,947/- which is considered doubtful by the Management has since been recovered after the close of the year.

(d) In view of our comment in paragraph 3 (c) above, clause III (d) of paragraph of the aforesaid Order is not applicable to the Company.

(e) The Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In view of the same, our comments on clauses III (f) and (g) of paragraph (4) of the aforesaid Order are not applicable to the Company.

4. 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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Companys operations do not give rise to any excise duty liability.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2010 which were outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess except the following:

Name of the Nature of dues Amount statute (Rs. in lakhs)

Central Sales Tax Act, Central Sales tax 12.16 1956

Income-tax Act, 1961 Income-tax on 10.66 completion of regular assessment



Name of the Period to which Forum where the Statue the amount dispute is relates pending

Central Sales Tax Act, 1956 Asst. Years Asst. Commissioner 2005-06 to of Commercial Tax 2006-07 (Value Added Tax)

Income-tax Act, 1961 Asst. Years Income-Tax 2005-06 Appellate Tribunal

10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the financial year or preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks as per loan agreements or extended due dates There were no borrowings from any financial institutions or by way of debentures.

12. According to the information and explanations given 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.

13. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund / societies are not applicable to the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has given guarantee for loan taken by its one of the subsidiaries from a bank, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the Company. The said guarantee has since been extinguished after the close of the year.

16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken during the year were applied for the purpose for which the loans were obtained.

17. 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 prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year under audit. Accordingly, the provisions of clause (XIX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

20. The Company has not raised money by public issue during the year. Accordingly, the provisions of clause (XX) of paragraph 4 of the aforesaid Order are not applicable to the Company.

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO.

Chartered Accountants Registration No. 111381W

J.G.VERMA

Partner

Membership No. 5005

Mumbai, November 4, 2010

 
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