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Auditor Report of James Hotels Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of James Hotels Limited which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit & Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to the preparation and presentation 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 judgement 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.

3. 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.

4. 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.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgement, 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.

6. Attention is invited to the following points of Note '4' of the financial statements.

i) Note 4.1 - pending litigations against the Company.

ii) Note 4.2- the Company has increased Authorised Share Capital Rs. 140,000,000/- to Rs. 520,000,000/- by passing a special resolution dated 14th December, 2011 by way of postal ballot; however, the exact number of Equity Shares & Preference shares has not been specifically classified.

iii) Note 4.5 - defaults in repayment of dues to banks and assignment of loans granted by State Bank of India to Asset Reconstruction Company (India) Limited. Provision for interest accrued, in absence of confirmation of balances by banks, has been made on accrual basis.

iv) Note 4.8 - non-payment of fee for increase in Authorised Share Capital.

v) Note 4.11 - provision of liability for Gratuity has been made on accrual basis; Actuarial Valuation report as required under Accounting Standard -15, has not been obtained.

vi) Note 4.13 - remuneration paid to Managing Director is subject to the approval of Shareholders and Central Government.

7. Net-worth of the Company has completely eroded; the management is of the opinion that the Company shall carry on its business as usual, hence the financial statements of the Company have been prepared on a going concern basis; the appropriateness of the said basis is inter-alia dependent upon future performance and profitability and presently we are unable to express an opinion on the same.

8. Subject to paragraph 6 & 7 above, 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 inconformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31sl March, 2015 and its loss and its cash flows for the year ended on that date.

9. As required by the Companies (Auditor's Report) Order, 2015 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 the paragraph 3 and 4 of the Order, to the extent applicable.

10. 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 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 it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit & 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, except provision of liability for Gratuity on accrual basis without taking actuarial valuation report as required under Accounting Standard - 15, 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 the 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; and

(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 Notes 4.1 & 4.4).

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii.there were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 9 of our report of even date on accounts of James Hotels Limited for the year ended 31st March, 2015).

i. In respect of its Fixed Assets :

a) The records maintained by the Company need to be updated to show full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, the Company has a programme for physical verification on a rotational basis, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business. Accordingly, certain fixed assets have been physically verified by the management, during the year, and no material discrepancies were noticed on such verification.

ii. In respect of its Inventories :

a) According to the information and explanations given to us, the physical verification of inventories is conducted by the management at periodic intervals; the frequency of verification is reasonable having regard to the size of the Company and the nature of its inventories.

b) According to the information and explanations given to us, the procedures for 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) According to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, 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 Companies Act, 2013. Accordingly, clauses (a) &(b) of paragraph 3(iii) of the Order are not applicable; hence not commented upon. iv. According to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchase of inventories & fixed assets and with regard to the sale of goods & rendering of services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any major weakness in the aforesaid internal control system during the year. v. The Company has not accepted any deposits from the public.

Unsecured loans from promoters were taken in pursuance of stipulations of the Banks. Unsecured loan (Rs.23,162,704/-) from promoter is exempt deposit, inconformity with the provisions of Section 73 of the Companies Act, 2013 read with Rule 2(c)(xiii) of the Companies (Acceptance of Deposits) Rules, 2014 . The Company, during the year, has repaid (Rs. 19,700,564/-) to the director and promoters of the Company. vi. The Central Government has not prescribed maintenance of cost records under Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014. vii. In respect of its Statutory dues :

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax. Wealth Tax, Service Tax, Excise Duty, Custom Duty, Value Added Tax, Cess and other material statutory dues, to the extent applicable, have not been regularly deposited, during the year, by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable, in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Custom Duty, Value Added Tax, Cess and other material statutory dues, were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable except as mentioned below:

Name of the Nature of Amount Period to which Statue Dues the amount relates

Income Tax Act, 1961 Tax deducted at source 10,350 Jun., 2014 to Sep., 2014

b) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax and Cess which have not been deposited with appropriate authorities on account of any dispute.

c) According to the information and explanations given to us, there is no amount 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.

viii. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

ix. According to the information & explanations given to us and on the basis of verification of records, the Company has defaulted in repayment of principal amount and interest due to State Bank of India, Punjab National Bank and United Bank of India; resultantly the accounts were classified as NPA, the amount of default remained unconfirmed, (refer Note 4.5). The Company, during the year, has not taken any loan from financial institution.

x. According to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xi. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were obtained.

xii. According to the information & explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VASUDEVA & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No. - 022239N

Sd/-

Dated : 30th May, 2015 (P.K. VASUDEVA)

Place : Chandigarh PARTNER

Membership No. -13787


Mar 31, 2014

1. We have audited the accompanying financial statements of James Hotels Limited which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit & Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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 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.

3. 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.

4. 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 judgement, 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, 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 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 audit opinion.

5. Attention is invited to the following points of Note ''4'' of the financial statements.

i) Note 4.2 - the Company has increased Authorised Share Capital Rs. 140,000,000/- to Rs.520,000,000/- by passing a special resolution dated 14th December, 2011 by way of postal ballot; however, the exact number of Equity Shares & Preference shares has not been specifically classified.

ii) Note 4.8 - non-payment of fee for increase in authorised share capital.

iii) Note 4.11 - non-provision of liability for Gratuity as per Accounting Standard -15.

6. Subject to paragraph 5 above, in our opinion and to the best of our information and according to the explanations given to us, the financial statements, read with notes annexed thereto, give the information required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) in the case of the Statement of Profit & Loss, of the loss for the year ended on that date and

7. As required by the Companies (Auditor''s Report) Order, 2003, 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.

8. 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, Statement of Profit & 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 & Loss and Cash Flow Statement, except non-provision of liability for Gratuity as per Accounting Standard -15, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 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, to the extent applicable;

e) on the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is, prima facie, disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

(Referred to in paragraph 7 of our report of even date on accounts of James Hotels Limited for the year ended 31st March, 2014).

i. In respect of its Fixed Assets :

a) The records maintained by the Company need to be updated to show full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, the Company has a programme for physical verification on a rotational basis, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business. Accordingly, certain fixed assets have been physically verified by the management, during the year, and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any of its fixed assets, during the year.

ii. In respect of its Inventories :

a) According to the information and explanations given to us, the physical verification of inventories is conducted by the management at periodic intervals; the frequency of verification is reasonable having regard to the size of the Company and the nature of its inventories.

b) According to the information and explanations given to us, the procedures for 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) According to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

iii. a) According to the information and explanations given to us, 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 Companies Act, 1956. Accordingly, clauses (a) to (d) of paragraph 4(iii) of the Order are not applicable; hence not commented upon.

b) According to the information and explanations given to us, the Company has taken unsecured loans (interest free) from five other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (The maximum amount outstanding during the year and the year end balances were Rs.458.63 lacs (five parties) & Rs. 428.63 lacs (four parties), respectively).

c) According to the information and explanations given to us, the conditions in respect of unsecured loans taken by the Company from parties covered in the register maintained under Section 301 of the Companies Act, 1956 are, prima-facie, not prejudicial to the interest of the Company.

d) According to the information and explanations given to us, the Company has not entered into any contractual agreement(s) with the above referred parties with regard to payment of interest & repayment of principal.

iv. According to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchase of inventories & fixed assets and with regard to the sale of goods & rendering of services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any major weakness in the aforesaid internal control system during the year.

v. a) According to the information and explanations given to us, 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, the transactions made in pursuance of such contracts or arrangements have been entered in the register maintained under Section 301 of the Companies Act, 1956; however no such transactions exceed the value of rupees five lacs in respect of any party covered in the register maintained under Section 301 of the Companies Act, 1956.

vi. According to the information & explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant applicable provisions of the Companies Act, 1956 and the rules framed thereunder.

Unsecured loans from promoters were taken in pursuance of stipulations of the Banks. Unsecured loans (Rs.42,863,268/-) from promoters [i.e. Directors (Rs. 4,650,251/-) & Others (Rs.38,213,017/-)] are exempt deposit, in conformity with the provisions of Section 58A of the Companies Act, 1956 read with Rule 2(b)(xi) of the Companies (Acceptance of Deposits) Rules 1975.

vii. In our opinion, the internal audit functions carried out during the year by an external agency appointed by the management have been commensurate with the size of the Company and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

ix. In respect of its Statutory dues :

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Wealth Tax, Cess and other material statutory dues, to the extent applicable, have generally been regularly deposited, during the year, by the Company with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable, in respect of Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material statutory dues, were in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable, except as mentioned below:

Name of the Statue Nature of Dues Amount Period to which the amount relates

Income Tax Act, 1961 Tax deducted Rs. 80,526 April, 2013 to at source August, 2013

c) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited with appropriate authorities on account of any dispute.

x. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year ended on that date but has not incurred any cash losses in the immediately preceding financial year.

xi. According to the information & explanations given to us and on the basis of verification of records, the Company has defaulted in repayment of dues (Rs 4,650,000/-,Rs 2,400,000/- & Rs 689,572/-) for the period from January, 2014 to March, 2014 and interest (Rs 7,163,332/-, Rs 6,627,767/- & Rs. 2,465,651/-) for the month of January, 2014 and February, 2014, to State Bank of India, Punjab National Bank and United Bank of India, respectively; which remained unpaid as on 31st March, 2014.The Company, during the year, has not taken any loan from financial institution.

xii. According to the information & 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.

xiii. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

xiv. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv. According to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were obtained.

xvii. According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that there is a usage of short-term funds for long-term investment to the extent of Rs.903.84 lacs.

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

xix. The Company did not have any outstanding debentures during the year.

xx. The Company has not raised any money by public issues during the year.

xxi. According to the information & explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VASUDEVA & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration No. 022239N

Sd/- (P.K. VASUDEVA) PARTNER Dated : 30th May, 2014 Membership No. 13787 Place : Chandigarh


Mar 31, 2012

1. We have audited the attached Balance Sheet of James Hotels Limited as at 31st March, 2012, the related Statement of Profit & Loss Account and the Cash Flow Statement 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.

2 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor's Report) Order, 2003, (as amended) 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.

4. Attention is Invited to the following points of Note '4' of the financial statements.

i) Note 4.4 - the Company has increased Authorised Share Capital Rs. 140,000,000/- to Rs. 520,000,000/- by passing a special resolution dated 14th December, 2011 by way of postal ballot; however, the exact number of Equity Shares & Preference Shares has not been specifically classified.

ii) Note 4.9 - non provision of depreciation on certain fixed assets (under construction/under installation).

5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

ii) In our opinion, proper books of account as required by Law have been kept by the Company so far as appears from our examination of those books.

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

iv) In our opinion, the Balance Sheet, Statement of Profit & Loss and the 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, to the extent applicable.

v) On the basis of written representations received from the directors as on 31" March, 2012 and taken on record by the Board of Directors, we report that none of the directors is, prima facie, disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act. 1956.

vi) Subject above comments in paragraph (4) above, in our opinion and to the best of our information and according to the explanations given to us. the said accounts read with notes annexed thereto, give the information required by Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

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

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

(Annexures referred to in paragraph 3 of our report of even date on accounts of James Hotels Limited for the year ended 31st March, 2012)

i) In respect of Its Fixed Assets:

a) The Company is updating records showing full particulars, including quantitative details and situation of fixed assets.

b) According to the information and explanation given to us, some of the fixed assets were physically verified during the year. However, no record evidencing physical verification was shown to us; hence not commented upon.

c) The Company did not dispose of substantial part of its fixed assets, during the year.

ii) The Company has not commenced operations and does not hold any inventories, accordingly clause (ii) of paragraph 4 of the Order is not applicable.

iii) a) According to the information and explanations given to us, the Company, during the year, has not granted any loan secured or unsecured, to Companies/firms/other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (b) to (d) of paragraph 4(iii) of the Order are not applicable.

b) According to the information and explanations given to us, One Company, during the year, has taken unsecured loans (interest free) from five other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (The maximum amounts outstanding during the year were Rs. 3,387.03 lacs and the year end balances were Rs. 287.13 lacs respectively).

c) According to the information and explanations given to us, the terms and conditions of payment of interest and repayment of principle (though not determined) are prima-facie, not prejudicial to the interest of the Company.

iv) In our opinion and according to the information and explanations given to us, there is an internal control system which does not appear to be commensurate with the size of the Company and nature of its business for the purchase of fixed assets. During the course of our audit, some areas have been noticed where the existing internal control system needs to be strengthened.

v) According to the information and explanations provided by the management, 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 and there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, therefore clause (v) (b) of paragraph 4 of the Order is not applicable.

vi) According to the information & explanations given to us. the Company has not accepted deposits from the public with in the provision of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

Unsecured loans from promoters were taken in pursuance of stipulations of the Banks. Unsecured loans (Rs. 28,713.268/-) from promoters (i.e. Promoters Directors (Rs. 150,251/-) & Others Promoters (Rs. 28,563,017/-)) are exempt deposit, in conformity with the provisions of Section-58A of the Companies Act, 1956 read with Rule 2(b)(xi) of the Companies (Acceptance of Deposits) Rules, 1975.

vii) The Company has an internal audit system, the scope and coverage of which, in our opinion, is required to be enlarged to be commensurate with the size and the nature of its business.

viii) The maintenance of cost records under Section 209 (i)(d) of the Companies Act, 1956 is not applicable to the Company.

ix) In respect of its Statutory dues:

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax. Sales Tax Service Tax. Wealth Tax, Cess and other material statutory dues, to the extent applicable have generally been regularly deposited, during the year, by the Company with the appropriate authorities.

According 10 the information and explanations given to us, the provisions of Employees State Insurance & Provident Fund are applicable w.e.f. March, 2012; no undisputed amounts, in respect of Investor Education and Protection Fund, Income Tax, Wealth Tax, Sales Tax, Service Tax, Cess and other applicable statutory dues were in arrears as at 31st March, 2012 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 and Cess which have not been deposited with appropriate authorities on account of any dispute.

x) The accumulated losses of the Company do not exceed fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year under audit, as well as in the immediately preceding financial year.

xi) According to the information and explanation given to us and on the basis of verification of records, the company has defaulted in repayments of interest on Term Loans from State Bank of India aggregating to Rs. 10.584,125/- for the months of January, 2012 & February, 2012 and Punjab National Bank Rs. 3,409,094/- for the month of February, 2012.

The Company has also defaulted in repayments of principal amount of Terms Loans from State Bank of India and Punjab National Bank aggregating to Rs. 12,000,000/- and Rs. 1,000,000/- respectively which were due for payment up to March, 2012.

The Company has not taken any loan from financial institution.

xii) According to the information & 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.

xiii) According to the information & explanations given to us. the Company is not a chit fund or a nidhi/mutual benefit fund/society

xiv) According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

xv) According to the information & explanations given to us. the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) According to the information and explanations given to us, term loans taken by the Company, have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us. the Company, during the year, has not raised any short term funds.

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

xix) The Company did not have any outstanding debentures during the year.

xx) The Company has not raised any money by public issue during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For VASUDEVA & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration No. 022239N

(PIYUSH SINGLA) PARTNER Membership No. 520263

Dated : 3rd August, 2012 Place : Chandigarh


Mar 31, 2011

1 We have audited the attached Balance Sheet of James Hotels Limited, as at 31st March. 2011 and the related Profit & Loss Account and the Cash Flow Statement -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 ouraudit.

2 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for ouropinion.

3 As required by the Companies (Auditor's Report) Order, 2003, (as amended) 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 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, Profit & 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 & Loss Account and the 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. to the extent applicable.

e) On the basis of written representations received from the directors as on 31* March, 2011 and taken on record by the Board of Directors, we report that none of the directors is, pnma facie, disqualified as on 31* March, 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f) Attention is invited to the following notesof Schedule 'L'

i) Note no. B.5 regarding default in repayment of dues (principal & interest) to Bank.

ii) Note no. B. 9 regarding non-provision of depreciation on certain assets (not put to use).

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2011.

b) in the case of the Profit & Loss Account, of the loss of the Company for the year ended on that date.

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on thatdate.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 3 of our report of even date on account of even date on accounts of james Hotels Limited for the year ended 31st March,2011)

1. In respect of its Fixed Asssets:

a) the Company is updating records showing full particulars, including quantitative details and situations of fixed assets. b) As explained to us,all the fixed assets have not been physically verfied by the mangement during the year, but there is a regular programme of verifition which, in our opinion, is reasonable having regard to the size of the Company & the nature of its assets: no material discrepanicies were noticed on such physical verification. c) None of the fixed assets of the Company were disposed off during the year.

2. a) The Company has not granted any loans, secured or unsecured to Companyies/firms or other parties covered in the register maintaned under section 301 of the Companies Act, 1956. However, in respect of unsecured loans taken from two parties (balance outstanding Rs. 287,803.268/-)covered in the register maintained under Section 301 of the Companies Act, 1956, the terms and conditions of repayment etc., though not determined are, primme facie, not prejudicial to the interest of the Company. The Company has not entered into any contractual agreement(s) with the above referred parties(others) with regard to repayment/ refund or paument of interest etc.

3. in our opinion and according to the information and explanations given to us, there is an internal control system which does not appear to be commensurate with size of the Company and nature of its business for the purchases for fixed assets. During the course of our audit, some areas have been noticed where the existing internal control system needs to be strengthened.

4. According to the information and explanattions provided by the manegement, the particulars of contraacts or arrangements that need to be entered in the register maintained under Sectiomn 301 of the Companies Act, 1956 have been so entered and there are no transactions that need to be entered into register maintained under Section 301 of the Company Act,1956, hence para (vb) of the order is not applicable

5.According to the information & explanations given to us, the Company has not accepted any deposits from the public with in the provision of Sections 58 A and of the Companies Act, 1956 and the companies (Acceptance of Deposits) rules, 1975.

6. The Company has an internal audit system, the scope and coverage of which, in our opinion, is required to be enlarged to be commensurate with the size and the nature of its business.

7. In respect of its Statutory dues:

a) According to the information and explanations given to us, the provisions of Employees State Insurance and Provident Fund are not applicable to the Company; no undisputed amounts in respect of Investor Education and Protection Fund, Income Tax, Wealth Tax, CST/VAT, Custom Duty, Cess and other applicable statutory dues, except Fringe Benefit Tax (Rs. 66,070/- for the year 2000-2009) were outstanding at the year end for a period of more than six months from the date they became payable.

b) According to the records of the Company there are no statutory dues that remain unpaid, as at 31st March, 2011, on account of any dispute.

8. The accumulated losses of the Company do not exceed fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year under review, as well as, in the immediately preceding financial year.

9. According to the information & explanations given to us and on the basis of verification of records, interest on term loan from State Bank of India, aggregating to Rs.9,119,886/-, for the months of January 2011 & February 2011,remained unpaid; the installment of term loan (State Bank of India) to the tune of Rs. 4,000,000/- due & payable till March. 2011, also remained unpaid. The Company, during the year, has not taken any loan from Financial Institution.

10 According to the information & 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.

11. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

12. According to the information & explanations given to us. the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly the provisions of clause 4{xiv) of the Order are not applicable to the Company.

13. According to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

14. According to the information and explanations given to us, term loans taken, during the year, have been applied for the purpose for which the Loans were obtained.

15. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2011, we report that no significant funds raised on short-term basis have, prima facie, been used for long-term investment by the Company, except unsecured loans from the promoter which have been used for completion of hotel project.

16 The Company has not made an preferential allotment of shares to parties and Companies covered in the restrict maintained under Section 301 of the Companies Act, 1956, during the year.

17. The Company has not issued any Debentures.

18. The Company has not raised any money by public issue during the year.

19. Based on the information and explanation furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.



For VASUDEVA & ASSOCIATES CHARTERED ACCOUNTANTS



Sd/- (N1TI M. LATAWA) PARTNER Dated : 18th June, 2011 Place : Chandigarh


Mar 31, 2010

1. We have audited the attached Balance Sheet of James Hotels Limited, as at 31st March, 2010, and the related Profit & 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.

2 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3 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 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Furtherto our comments in the Annexure referred to above, we reportthat:

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, Profit & 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 & Loss Account and the 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, to the extent applicable.

e) On the basis of written representations received from the directors as on 31s* March, 2010 and taken on record by the Board of Directors, we report that none of the directors is, prima facie, 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 with notes thereon and schedule annexed thereto and subject to note B.10 regarding non provision of depreciation on certain assets (not put to use), 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 affairs of the Company as at 31st March, 2010.

ii) in the case of the Profit & Loss Account, of the loss of the Company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date on accounts of James Hotels Limited for the yearended 31"March,2010)

1. In respect of its Fixed Assets:

a) The Company is updating records showing full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, all the fixed assets have not been physically verified by the management during the year, but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company & the nature of its assets; no material discrepancies were noticed on such physical verification.

c) None of the fixed assets of the Company were disposed off during the year.

2. a) The Company has not taken any loans, secured or unsecured from Companies or firms covered in the register maintained under section 301 of the Companies Act, 1956. However, in respect of unsecured loans taken from two parties (balance outstanding Rs. 184,973,234/-) covered in the register maintained under Section 301 of the Companies Act, 1956, the terms and conditions of repayment etc., though not determined are, prima facie, not prejudicial to the interest of the Company. b) 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 Companies Act, 1956; accordingly clauses (3-b) to (3-d) are not applicable and have, therefore, not been commented upon.

3. In our opinion and according to the information and explanations given to us, there is an internal control system which does not appear to be commensurate with the size of the Company and nature of its business for the purchase of fixed assets. During the course of our audit, some areas have been noticed where the existing internal control system needs to be strengthened.

4. According to the information and explanations provided by the management, 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 and there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, hence para (vb) of the Order is not applicable.

5. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposits from the public, within the meaning of sections 58A & 58AA or any other relevant applicable provisions of the Companies Act, 1956 and the rules framed thereunder.

6. The Company has an internal audit system, the scope and coverage of which, in our opinion, is required to be enlarged to be commensurate with the size and the nature of its business.

7. In respect of its Statutory dues:

a) According to the information and explanations given to us, the provisions of Employees State Insurance and Provident Fund are not applicable to the Company; no undisputed amounts in respect of Investor Education and Protection Fund, Income Tax, Wealth Tax, CST/VAT, Custom Duty, Excise Duty, Cess and other applicable statutory dues, except Fringe Benefit Tax (Rs. 66,070/- for the year 2008-2009) were outstanding at the year end for a period of more than six months from the date they became payable.

b) As informed, there were no disputed statutory dues which remained unpaid as at 31st March, 2010.

8. The accumulated losses of the Company do not exceed fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year under review, as well as, in the immediately preceding financial year.

9. According to the information & explanations given to us and on the basis of verification of records, the Company (except for interest Rs. 4,490,449/- for the month of February, 2010) has not defaulted in repayment of dues to the bank. The Company, during the year, has not taken any loan from Financial Institution.

10. According to the information & 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.

11. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

12. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly the provisions of clause 4(xiv) of the Order are not applicable to the Company.

13. According to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from banks orfinancial institutions.

14. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company, during the year, for the purposes for which the loans were obtained, other than temporary deployment pending application.

15 Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2010, we report that no significant funds raised on short-term basis have, prima facie, been used for long-term investment by the Company, except unsecured loans from the promoter directors which have been used for completion of hotel project.

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

17. The remaining clauses of the order are either not applicable to the Company or are not relevant in the current year and accordingly we have not reported thereon.

For VASUDEVA & ASSOCIATES

CHARTERED ACCOUNTANTS

Sd/- Dated: 27th August, 2010 (NITI M. LATAWA)

Place : Chandigarh PARTNER

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