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Auditor Report of Fomento Resorts & Hotels Ltd.

Mar 31, 2016

To the Members of

Fomento Resorts and Hotels Limited

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Fomento Resorts and Hotels Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2016, 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 and presentation of these financial statements that give a true and fair view of 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.

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 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 in the circumstances. 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 aforesaid 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 2016, 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,

2016 (“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”, a statement on the matters specified in paragraph 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 it appears from our examination of those books;

c) The Balance sheet, the Statement of Profit and Loss and the Cash-Flow Statement dealt with 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;

e) On the basis of written representations received from the Directors as on 31st March 2016 and taken

on record by the Board of Directors, none of the Directors is disqualified as on 31st March 2016 from being appointed as a director in terms of section 164 (2) of the Act;

f) With respect to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure “B”; and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit & 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 statements

- Refer Note 35 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; and

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

Annexure “A” to the Independent Auditors’ Report

The Annexure referred to in paragraph 1 of our report of even date to the members of Fomento Resorts and Hotels Limited for the year ended 31st March 2016:

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 considering the nature of fixed assets, the same have been physically verified by the Management at reasonable intervals during the year which in our opinion is reasonable. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

II. According to the information and explanations given to us, the management has conducted physical verification of inventories at reasonable intervals and no material discrepancies were noticed between the physical stock and book records on such physical verification.

III. 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 (''the Act'').

IV. The Company has not granted any loans, made any investments or provided guarantees and hence reporting under Clause IV of the Order is not applicable.

V. According to information and explanations given to us, the company has not accepted any deposits from the public during the year.

VI. The Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 for the Company.

VII. (a) The Company is 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, cess, value added tax and other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty, value added tax and cess which were outstanding as at 31st March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited on account of disputed matters pending before the appropriate authorities:

(Rs. in lakhs)

Name of the Statute

Forum where dispute is Pending

Amount

Period to which the amount relates

1.Expenditure Tax Act

High Court of Bombay, Panaji Bench, Goa.

Rs.676.88

Assessment Year 1996-97 to 2002-03

2. Income Tax Act

Commissioner of Income Tax (Appeals), Panaji,-Goa.

Rs. 5.04

Assessment Year 2009-10

3. Income Tax Act

Commissioner of Income Tax (Appeals), Panaji,-Goa.

Rs.6.30

Assessment Year 2011-12

4.Income Tax Act

Commissioner of Income Tax (Appeals), Panaji,-Goa.

Rs.4.91

Assessment Year 2012-13

5. Income Tax Act

Commissioner of Income Tax (Appeals), Panaji-Goa

Rs. 5.84

Assessment Year 2013-14

VIII. The Company has not taken any loans from Banks/Financial institutions/Debenture holders. Hence reporting under Clause VIII of the order is not applicable.

IX. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause IX of the Order is not applicable.

X. According to the information and explanation given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

XI. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

XII. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly clause XII of the order is not applicable.

XIII. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, wherever applicable and the details of such transaction have been disclosed in the financial statements as required by the applicable accounting standards.

XIV According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

XV According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, clause XV of the order is not applicable.

XVI. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934

Annexure “B” to the Independent Auditors’ Report

Report on the Internal Financial controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Fomento Resorts and Hotels Ltd. (“the Company”) as at 31st March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria establishing by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) and Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based in the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on audit of internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For H. K. APARANJI

Chartered Accountants

Firm Regn. No. 000199S

MOHAN B. PYATI

Partner

Membership No. 203120

Place: Margao-Goa

Date: May 30, 2016


Mar 31, 2015

We have audited the accompanying financial statements of Fomento Resorts and Hotels Limited ("the Company"), which comprise the 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 and presentation of these financial statements that give a true and fair view of 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.

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 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 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 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 aforesaid 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 enclose 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 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 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; and

f) With respect to the other matters to be included in the Independent Auditors Report in accordance with rule 11 of the Companies (Audit & 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 statements – Refer Note 35 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; and

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

Annexure referred to in paragraph 1 of our report of even date to the Members of Fomento Resorts and 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 considering the nature of fixed assets, the same have been physically verified by the Management at reasonable intervals during the year which in our opinion is reasonable. No material discrepancies were noticed on such verification.

II. (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

III. (a) 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 ('the Act').

(b) Since the Company has not granted any loans as stated in clause III (a) of the order, clause (III)(b) of the order is not applicable.

IV. 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 with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in internal control system.

V. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public as defined under sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Further, during the course of our audit we have neither come across nor have we been informed of any order passed under the aforesaid Section by the Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal.

VI. The Central Government has not prescribed the maintenance of cost records under section 148 (1) of the Companies Act, 2013 for the Company.

VII. (a) The Company is 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, cess, value added tax and other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty, value added tax and cess which were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited on account of disputed matters pending before the appropriate authorities:

(in lac) Name of the Statute Forum where dispute is Pending Amount Period to which the amount relates

1.Expenditure Tax Act High Court of Bombay, Panaji Bench, Goa. Rs.676.88 Assessment Year 1996-97 to 2002-03

2.Income Tax Act Commissioner of Income Tax (Appeals), Panaji,–Goa. Rs. 5.04 Assessment Year 2009-10

3.Income Tax Act Commissioner of Income Tax (Appeals), Panaji,–Goa. Rs.6.30 Assessment Year 2011-12

4.Income Tax Act Commissioner of Income Tax (Appeals), Panaji,–Goa. Rs.4.91 Assessment Year 2012-13

(c) According to the information and explanations given to us the amount required to be transferred by the company 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. The Company has not incurred cash losses during the financial year covered by our report and in the immediately preceding financial year.

IX. The Company has not taken any loan from Banks/Financial institutions/Debenture holders. Hence reporting under Clause (IX) of the order is not applicable.

X. The Company has not given any guarantee for the loans taken by others from banks or financial institutions during the year. Hence, reporting under clause X of the order is not applicable.

XI. The Company has not obtained any term loans. Therefore the provisions of clause XI of order are not applicable to the company.

XII. During the course of our examination of the books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.

For H. K. APARANJI Chartered Accountants Firm Regn. No. 000199S

MOHAN B. PYATI Partner Membership No. 203120

Place: Margao-Goa Date : 30th May 2015


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Fomento Resorts and Hotels Limited (the Company), which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash-Flow Statement for the year then ended, and summary of significant accounting policies and other explanatory information.

MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s 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 Subsection (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 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 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 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 subsection (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 comply with the Accounting Standards referred to in Subsection (3C) of Section 211 of the Companies Act, 1956.

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

The Annexure referred to in paragraph 1 of the our report of even date to the Members of Fomento Resorts and Hotels Limited on the accounts of the Company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation 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 considering the nature of fixed assets, the same have been physically verified by the Management at reasonable intervals during the year which in our opinion is reasonable. No material discrepancies were noticed on such verification.

(c) During the year no substantial part of fixed assets have been disposed off by the Company. Therefore, the provisions of clause 1(c) of the aforesaid Order, in our opinion, are not applicable to the Company.

II. (a) The inventory has been physically verified by the Management during the year.

In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

III. (a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) Since the Company has not granted any loans as stated in paragraph III (a) above, Clause iii (b) to clause iii (d) of the order are not applicable.

(c) The Company has taken interest free unsecured loans amounting to Rs.1123.91 lakhs (Maximum amount outstanding during the year Rs.1123.91 lakhs) and interest bearing unsecured loan from a Company amounting to Rs. 608.23 lakhs (maximum amount outstanding during the year Rs. 608.23 lakhs) listed in the register maintained under Section 301 of the Companies Act 1956.

(d) The interest free loans taken are without stipulation as to their repayment and prima facie not prejudicial to the interest of the Company. In so far as interest bearing unsecured loan is concerned, the rate of interest and the terms and conditions of loan taken are prima facie not prejudicial to the interest of the Company.

(e) Since the interest bearing unsecured loan is not due for repayment as to its principal amount and interest, clause (iii) (g) of paragraph 4 of the order is not applicable.

IV. 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 with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in internal control system.

V. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, transactions made in pursuance of Contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs 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.

VI. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public as defined under section 58A, 58AAor any other relevant provisions of the Companies Act, 1956 and the rules framed there under. Further, during the course of our audit we have neither come across nor have we been informed of any order passed under the aforesaid Section by the Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal.

VII. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

VIII. The Central Government has not prescribed maintenance of cost records under section 209 (1 )(d) of the Companies Act, 1956 for the Company.

IX. (a) The Company is regular in depositing with appropriate authorities undisputed Statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess which were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable except Luxury Tax amounting to Rs. 34,772/-

(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited on account of disputed matters pending before the appropriate authorities:

(Rs. in Lakhs) Name of the Statute Forum where dispute is Amount Pending

1. Expenditure Tax Act i) High Court of Bombay, Rs. 676.88 Panaji Bench, Goa.

2. Income Tax Act ii) Commissioner of Income Rs. 5.04 Tax (Appeals), Panaji-Goa.

X. The Company has no accumulated losses. The Company has not incurred cash losses during the financial year covered by our report and in the immediately preceding financial year.

XI. The Company has not taken any loan from Banks/Financial institutions. Hence reporting under Clause (XI) of paragraph 4 of the order is not applicable. Further the Company has not issued any debentures and as such reporting regarding default in repayment of the same does not arise.

XII. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of Clause XIII of the aforesaid Order are not applicable to the Company.

XIV. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause XIV of the aforesaid Order are not applicable to the Company.

XV. The Company has not given any guarantee for the loans taken by others from banks or financial institutions during the year.

XVI. The Company has not obtained any term loans. Therefore the provisions of clause XVI of order are not applicable to the company.

XVII. According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for longterm investments.

XVIII. The Company has not raised any money by issue of shares during the year. Therefore, the provisions of Clause XVIII of the aforesaid Order are not applicable to the Company.

XIX. The Company has not issued any debentures during the year under audit. Accordingly, the provisions of Clause XIX of the aforesaid Order are not applicable to the Company

XX. The Company has not raised any money by way of public issue during the year. Therefore, the provisions of Clause XX of the aforesaid Order are not applicable to the Company

XXI. During the course of our examination of the books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.

For H.K.APARANJI

Chartered Accountants

Firm Reg. No. 000199S

Sd/-

(MOHAN B. PYATI)

Partner

M. No. 203120

PLACE: MUMBAI

DATE: 29th MAY, 2013


Mar 31, 2010

We have audited the attached Balance Sheet of Fomento Resorts and Hotels Ltd, as at 31st March, 2010, and also the Profit and Loss Account and the Cash Flow Statement 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.

1. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) order 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3 Further to our comments in the Annexure referred to in paragraph 2 above, 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 purposes 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(e) On the basis of written representations received from the Directors, as on 31$t March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(1) in the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2010;

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

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



ANNEXURE

STATEMENT REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF FOMENTO RESORTS AND HOTELS LIMITED.

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

(b) As explained to us considering the nature of fixed assets, the same have been physically verified by the Management at reasonable intervals during the year which in our opinion is reasonable. No material discrepancies were noticed on such verification.

(c) During the year no substantial part of fixed assets have been disposed off by the Company. Therefore, the provisions of clause 1 (c) of the aforesaid Order, in our opinion, are not applicable to the Company.

I (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

Ill (a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) Since the Company has not granted any loans as stated in paragraph III (a) above, Clause iii(b) to clause iii(d) of the order are not applicable.

(c) The Company has taken interest free unsecured loans amounting to Rs.1123.91 lakhs (Maximum amount outstanding during the year Rs. 1123.91 lakhs) from two Companies listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since the loans taken are interest free and without stipulation as to their repayment are prima facie not prejudicial to the interest of the Company.

(e) In view of our comment in paragraph III (d) above, clause III (f) & (g) of the order is not applicable.

IV 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 with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in internal control system.

V (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. In respect of service contract entered into with two private limited companies, the company has not obtained prior approval of the Central Government as required under the proviso to section 297(1) of the Companies Act, 1956(refer note 8 of notes forming part of accounts).

(b) According to the information and explanations given to us, transactions made in pursuance of Contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs 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.

VI In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public as defined under section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. Further, during the course of our audit we have neither come across nor have we been informed of any order passed under the aforesaid Section by the Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal.

VII In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

VIII The Central Government has not prescribed maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 for the Company.

IX (a) The Company is regular in depositing with appropriate authorities undisputed Statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess which were outstanding as at 31st March, 2010 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 dues of income tax/sales tax/wealth tax/service tax/customs duty/excise duty/cess which have not been deposited on account of any dispute other than disputed expenditure tax as indicated below:

Name of the Statute Forum where dispute is Pending Amount

Expenditure Tax i) High Court of Bombay, Rg 6.76.88.008

Panaji Bench, Goa.

X The Company has no accumulated losses. The Company has not incurred cash losses during the financial year covered by our report and in the immediately preceding financial year.

XI In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or Banks. Further the Company has not issued any debentures and as such reporting regarding default in repayment of the same does not arise.

XII The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

XIII In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause XIII of the aforesaid Order are not applicable to the Company.

XIV In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause XIV of the aforesaid Order are not applicable to the Company.

XV The Company has not given any guarantee for the loans taken by others from banks or financial institutions during the year.

XVI The Company has not obtained any term loans. Therefore the provisions of clause XVI of order are not applicable to the company.

XVII According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

XVIII The Company has not raised any money by issue of shares during the year. Therefore, the provisions of Clause XVIII of the aforesaid Order are not applicable to the Company.

XIX The Company has not issued any debentures during the year under audit. Accordingly, the provisions of Clause XIX of the aforesaid Order are not applicable to the Company.

XX The Company has not raised any money by way of public issue during the year. Therefore, the provisions of Clause XX of the aforesaid Order are not applicable to the Company.

XXI During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.



for H.K. APARANJI

CHARTERED ACCOUNTANTS



MOHAN B. PYATI

PARTNER

Place: Margao, Goa.

Date :28th July, 2010

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