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Auditor Report of Apollo Sindoori Hotels Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of APOLLO SINDOORI HOTELS LIMITED which comprise of the Balance Sheet as at 31st March 2015, Statement of Profit & Loss and 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 Management and Board of Directors of the Company are 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 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.

Auditor's 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 there under.

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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 to 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 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.

Basis for Qualified Opinion

We draw attention to Note 16 (3) on not providing for impairment of assets pending outcome of arbitration which involves certain claims towards the value of certain assets taken over by the landlord of the erstwhile leased premises. The additional provision if any required to be made on account of impairment of assets consequent to the arbitrator award is not ascertainable at this stage and not provided for and accordingly the impact if any is also not ascertainable.

Our opinion is qualified in respect of this matter.

Qualified 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 except for the effects of the matter described in the "Basis for Qualified Opinion" paragraph in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2015; and

b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date.

c) 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 2015, ('the Order') issued by the Central Government of India in terms of Sub section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 and Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid financial statements comply with the Accounting Standards Specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 except for the effects of the matter described in the "Basis for Qualified Opinion" paragraph.

(e) On the basis of written representations received from the directors as on 31st March 2015 and 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 Auditors report in accordance with Rule 11 of the Companies ( Audits 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.

(ii) There was no amount which was required to be transferred to the Investor Education and Protection Fund.

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

Annexure referred to in Paragraph 1 under the heading "Report on other legal and regulatory requirements" of our Report of even date to the members of APOLLO SINDOORI HOTELS LIMITED on the accounts of the company for the year ended 31st March, 2015 :

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) As explained to us, these fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;

(ii) (a) Inventories have been physically verified 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 nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts and were not material.

(iii) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has not been noticed or reported.

(v) The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

(vi) On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under sub-section (1) of Section 148 of the Act have been made and maintained. However, we are not required to and have not carried out any detailed examination of such records.

(vii) (a) According to the information and explanations given to us and based on the records of the company examined by us, the company has not been regular in depositing the undisputed statutory dues, including Provident Fund, Employees' State Insurance Act, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India. Undisputed amounts payable in respect of Service Tax of Rs.2,63,671/- and Labour welfare fund of Rs.1,82,275/-was in arrears as at 31st March 2015 for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and based on the records of the company examined by us, the dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty , Excise Duty and Cess and other material statutory dues as on 31st March 2015 which have not been deposited on account of disputes are given below:

Name of the Statute Nature of Dues Amount Forum where the Rs.Lacs dispute is pending

Income Tax Act 1961 Income Tax 13.93 Income Tax Appellate Tribunal

(c) The no amount which was required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The company has no accumulated losses as at 31st March 2015. The company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

(ix) The company has not defaulted in repayment of dues to banks.

(x) The company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) The Term loans have been applied for the purpose for which they were obtained.

(xii) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For R.SUBRAMANIAN AND COMPANY Chartered Accountants ICAI Regd. No. 004137S

R.RAJARAM Place : Chennai Partner Date : 29th May 2015 M.No: 25210


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Apollo Sindoori Hotels Limited ("the Company"), which comprise the Balance Sheet as at March 31,2013, 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.

Auditor''s 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 qualified audit opinion.

Basis for Qualified Opinion

Attention is invited to Note No. 16 (3) regarding impairment of assets based on the valuation adopted by the company pending outcome of arbitration which involves certain claims towards the compensation loss / diminution in value of certain assets in respect of erstwhile / leased premises. The additional provision if any required to be made on account of impairment of assets consequent to the arbitrator award is not ascertainable at this stage and not provided for and accordingly the impact if any is also not ascertainable.

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 except for the effects of the matter described in the "Basis for Qualified Opinion" paragraph in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Statement of Profit and Loss, 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 is 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account ;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 3 of our report of even date:

i. a. The Company is maintaining records which are in the process of being updated showing full particulars, including quantitative details and situation of fixed assets

b. Fixed Assets were physically verified during the year by the management, in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. As per the information made available to us no material discrepancies have been noticed on such verification.

c. Substantial part of the fixed assets has not been disposed off during the year affecting going-concern.

ii. a. Physical verification of Inventory has been conducted at reasonable intervals by the management.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. Proper records of inventory have been maintained by the company and material discrepancies noticed on physical verification have been properly dealt with in the books of the company.

iii. During the year, the company has not availed loan from company listed in the Register maintained under section 301 of the Companies Act, 1956.

iv. During the year, the company has not granted Loans to companies, Firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956.

v. In our opinion and according to the information and explanations given to us, internal control procedures are adequate commensurate with the size of the company and the nature of its business for the purchase of Fixed Assets and for the rendering of services. During the course of audit, we have not observed any continuing failure to correct major weakness in Internal Control.

vi. a. The particulars of contracts or arrangements referred to section 301 of the Companies act have been entered in the register required to be maintained under that section.

b. The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vii. The company has not accepted any fixed deposits from the public during the year requiring compliance of provisions of Section 58 A and 58 AA or any other relevant provisions of the Companies Act 1956.

viii. The Company has an internal audit system commensurate with the size and the nature of business.

ix. According to the information and explanations given to us the Central Government has not prescribed the Maintenance & cost records under section 209 (1) (d) and The Companies Act, 1956 for the services rendered by the company.

x. a. According to the information and explanations given to us, the company has been depositing undisputed statutory dues including Employees Provident fund, employees'' State Insurance, Investor protection fund, Income tax, sales tax, wealth tax, and any other statutory dues with the appropriate authorities during the year. However delay has been observed in the payment of Employees Provident fund, Employees state insurance, tax deducted at source, dividend distribution Tax and Service Tax and Investor Protection Fund.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, service tax were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable. Dividend Distribution Tax of RS. 5,27,312/-which was inarrearswaspaidon30.04.2013

c. According to the information and explanations given to us, the following are the dues in respect of Income tax and Service Tax, which have not been deposited on account of any dispute and there are no such dues in respect of Wealth Tax, Customs Duty and Excise Duty.

SI.No Nature of dues Forum Where Disputed Amount Unpaid (RS. in lakhs)

1 Income Tax Income Tax Appellate Tribunal 13.93

xi The Company does not have accumulated losses and has not incurred Cash loss during current year and in the immediately preceding financial year.

xii. The Company has not defaulted in the repayment of dues to Debenture holders, financial institution or bank.

xiii. The Company has not granted any loan or advance on the basis of Security by way of pledge of shares, Debentures and other securities.

xiv. The provisions of Special Statute relating to Chit fund/Nidhi are not applicable to this company.

xv. The Company is not dealing in or trading in shares, securities, debentures and other Investments.

xvi. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or Financial Institutions during the financial year. A Corporate Guarantee of RS. 280 Lakhs was given in earlier years and its terms are not prejudicial to the interest of the Company.

xvii. To the best of our knowledge and belief and according to the information and explanation given to us, no term loan was availed by the company during the current year.

xviii. According to the Cash flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short term basis have not been used for Long term Investment.

xix. During the year, 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.

xx. No debentures have been issued by the Company during the year.

xxi. The Company has not raised any money by way of Public issue during the year.

xxii. To the best of our knowledge and according to information and explanations given to us, no fraud on or by the company was noticed or reported during the financial year that causes the financial statements to be materially misstated.

for R. SUBRAMANIAN AND COMPANY, Chartered Accountants Firm Regn.No.004137S

R. RAJARAM Place: Chennai Partner Date: 21.05.2013 M.No.25210