Auditor Report of Sterling Greenwoods Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Sterling Greenwoods Limited (the Company), which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013_of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''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.

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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

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

(c) In the case of the Cash Flow Statement, of the cash flows of the Company 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 Section 227(4A) 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 Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of the written representations received from the directors as on March 31,2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of Section 274(1) (g) of the Act.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date)

I. Fixed Assets: -

The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

Physical verification of fixed assets except leased out resort''s assets have been carried out by the Management at the end of the year (not carried out due to dispute) which in our opinion is at reasonable intervals having regard to the size of the Company and nature of its assets. Further we have been informed that reconciliation of assets physically verified with the fixed assets register is in progress and according to information and explanation, given no material discrepancies have been noticed on such verification by the Management.

During the year, the Company has not disposed of substantial part of its fixed assets.

II. Inventories :-

(a) As explained to us, the stocks of land and stores & consumables have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stocks followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of stock records, in our opinion the stock records, in our opinion, the Company is maintaining proper records of inventory/stock. No material discrepancies have been noticed on physical verification of inventory/stocks as compared to book records.

III. (a) According to information and explanations given to us, the Company has granted loans covered in the register maintained under section 301 of the Companies Act, 1956.

(i) There is one Company covered in the register maintained under section 301 of the Companies Act, 1956 to which the Company has granted loans. The maximum amount involved during the year was Rs. 474824/- and the year-end balance of loans granted to such party was Rs. 3889948/-.

(ii) The Company has granted the said loan to subsidiary Company interest free and no stipulation has been made for re-payment, prima facie not prejudicial to the interest of the Company.

(b) According to information and explanations given to us, the Company had taken loans from three parties covered in the register maintained under section 301 of the Companies Act, 1956. Particulars are as under.

Particulars Amount (Rs.)

Taken or Accepted in year NIL

Repaid During the year 58,10,890/-

Maximum Amount involved 76,96,570/-

Closing Balance 22,00,502/-

(i) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(ii) The loans taken were re-payable on demand. The re-payment of the principal amount was as demanded and payment of interest has been regular.

(iii) As per the information and explanations given to us, the Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest where applicable.

IV. The Management of Company is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure. The objectives of internal control structure are to provide management with reasonable, but not absolute assurance that transactions are executed in accordance with Management''s authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations of internal control structure, errors/irregularities may occur and not be detected. Also, projections of any evaluation of the structure to future period is subject to the risk that procedures may become inadequate because of changes in conditions or that effectiveness of the design and operation policies and procedure may deteriorate.

In our opinion and according to the information and explanations given to us and on the basis of audit procedures performed in accordance with generally accepted audit practices in India for the purpose of reporting on true and fair view of financial statements, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of Inventories, fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control.

V. (a) According to the information given to us, there are transactions during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 and they are so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements (including transactions of finance) exceeding the value of rupees five lakhs during the year, as per information and explanations given by the Management, the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

VI. The Company has accepted deposits falling within the meaning of the provisions of sections 58A and 58AA of the Companies Act, 1956 from the directors and relatives on stipulation of the lenders bank of the Company in line with the Companies (Acceptance of Deposits) Rules, 1975 According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

VII. In our opinion, the Company has availed services of professional firm of chartered accountants for internal audit, the system commensurate with its size and nature of its business.

VIII. "We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost record under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained." We have not, however made a detailed examination of the said records with a view to determine whether they are accurate or complete.

IX. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing 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 any other material statutory dues applicable to it with the appropriate authorities.

According to information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us and records of the Company examined by us, there were disputed amounts payable in respect of Service Tax as follows:

Service Tax Demand disputed and pending with Appellate Tribunal:-

* -Against Resort & Hotel Business: Rs. 2303073/- (The Company has deposited Rs. 1175000/-)

* Service Tax Penalty Disputed and pending with Appellate Tribunal: - - Against Real Estate Business: Rs. 3410080-/- - Against Resort & Hotel Business: Rs. 3983113/-

* Service Tax Demand Disputed and pending with Appellate Tribunal: -

* Against Resort & Hotel Business: Rs. 482101/- (The Company has deposited Rs. 300000/-)

* Service Tax Demand Disputed and pending with Add Comm : -

* Against Resort & Hotel Business: Rs. 776572/- (The Company has deposited Rs. 450000/-)

* Against Resort & Hotel Business: Rs. 421367/- (The Company has deposited Rs. 200000/-)

* Service Tax Penalty pending with Appeal with Add. Comm : - -Against Resort & Hotel business : Rs. 421367/-

Subject to above, the Company has no undisputed amounts payable in respect of Income Tax, Sales/VAT Tax, Wealth- Tax, Service Tax, Customs Duty and Excise Duty, Cess which have remained outstanding as on 31st March, 2014 for a period of more than six months from the date they became payable.

X. The Company has no accumulated losses during the year and it has not incurred cash losses during the year or financial year immediately preceding.

XI. On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks.

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

XIII. The Company is not a chit fund and nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments.

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

XVI. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained,

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

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

XIX. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.

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

According to information and explanations given to us and based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For ANIL S. SHAH & CO. Chartered Accountants

ANIL S. SHAH Place : Ahmedabad Firm Reg. No. : 1o0474W Date : 30th May, 2014 Member No. : 16613

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Mar 31, 2012

We have audited the attached Balance-Sheet of STERLING GREENWOODS LIMITED as on 31/03/2012, related statement of Profit & Loss Account of the company for the year ended on that date annexed thereto and Cash Flow Statement for the period ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 misstatements. An Audit Includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well evaluating the overall financial statements presentation. We believed that our audit provides a reasonable basis for our opinion.

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

2. Further to our comments in the Annexure referred to in paragraph (2) above, we state that:

(i) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purpose of our Audit.

(ii) In our opinion, the Company has kept proper Books of Accounts as required by law so far as appears from our examination of the Books.

(iii) The said Balance Sheet and statement of Profit & Loss Account and cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and statement of Profit & Loss Account and cash flow statement dealt with by this report have been prepared in compliance with the accounting standards referred to in sub section (3C) of section 211 of the Act, to the extent applicable.

(v) On the basis of our review of the written representations received from the directors as on 31st March, 2012, and -taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31s1 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the company 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 Balance Sheet of the state of affairs of the Company as at 31st March, 2012.

(b) In the case of statement of Profit & Loss Account of the Profit for the year ended on that date.

And

(c) In the case of 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)

I. Fixed Assets

The Company has maintained proper records to showing full particulars including quantitative details and situation of fixed assets. However the entries their in requires updation.

Physical verification of fixed assets has been carried out by the Management at the end of the year, which in our opinion is at reasonable intervals having regard to the size of the Company and nature of its assets. We have been informed that the reconciliation of assets physically verified with the fixed assets register is in progress.

However, according to the information and explanations given to us, no material discrepancies were noticed on such verification. -

During the year the Company has not disposed of substantial part of its fixed assets.

II. Inventories

(a) The stocks of land and stores and consumables have been physically verified during the year by the management In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relatioi to the size of the Company and the.nature of it's business.

(c) On the basis of our examination of stock records, in our opinion the stock records, in our opinion the company i; maintaining proper records of inventory/stock. No material discrepancies have been noticed on physical verificatior of inventory/stocks as compared to book records.

III. (a) According to information and explanations given to us, the company has granted loans covered in the register maintained under section 301 of the Companies Act, 1956.

(i) There is one Company covered in the register maintained under section 301 of the Companies Act, 1956 to which the Company has granted loans. The maximum amount involved during the year was Rs. 161818/- and the year-end balance of loans granted to such parties was Rs. 2992239/-.

(ii) The Company has granted the said loan to subsidiary Company interest free and no stipulation has been made for re-payment, prima facie not prejudicial to the interest of the Company.

(b) According to information and explanations given to us, the Company had taken loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. Particulars are as under.

Particulars Amount

Taken or Accepted in year Rs. 16,00,000/- Repaid During the year Rs. 45,72,918/- Maximum Amount involved Rs. 1,14,37,549/- Closing Balance Rs. 1,12,11,444/-

(iii) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(iv) The loans taken were re-payable on demand. The re-payment of the principal amount was as demanded and payment of interest has been regular.

(v) As per the information and explanation given to us, the Company is regularly in repaying the principal amounts as stipulated and has been regular in the payment of interest where applicable.

IV. The management of Company is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibly, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure.The objective of internal control structure are to provide management with reasonable, but not absolute assurance that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principals. Because of inheriting limitations of internal control structure, errors/irregularities may occur and not be detected. Also, projections of any evaluation of the structure to future period is subject to the risk that procedures may become inadequate because of changes in conditions or that effectiveness of the design and operation policies and procedure may deteriorate.

V. In our opinion and according to the information and explanations given to us and on the basis of audit procedures performed in accordance with generally accepted audit practices in India for the purpose of reporting on true and fair view of financial statements, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with for the purchase of Inventories, fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control.

VI. (a) According to the information given to us, there are transactions during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 and they are so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements (including transactions of finance) exceeding the value of rupees five lakhs during the year, as per information and explanation given by the management, the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

VII. The Company has accepted deposits falling within the meaning of the provisions of sections 58A and 58AA of the Companies Act, 1956 from the directors and relatives on stipulation of the lenders bank of the Company inline with the Companies (Acceptance of Deposits) Rules, 1975.

According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

VIII. In our opinion, the Company has availed services of professional firm of chartered accountants for an internal audit, the system commensurate with its size and nature of its business. .

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

X. According to the information and explanation given to us, in respect of statutory dues:

The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Employees' state Insurance, income tax, SalesTax, WealthTax, ServiceTax, Custom Duty, Excise duty, Cess and any other material statutory dues applicable to it with the appropriate authorities.

According to the information and explanation given to us, there were undisputed amounts payable in respect of Sen/ice Tax as follows:

ServiceTax Demand disputed and pending with AppellateTribunal:-

- Against Resort & Hotel Business: Rs.2303073/-(the Company has deposited Rs. 1175000/-)

ServiceTax Penalty Disputed and pending with AppellateTribunal: -

- Against Real Estate Business: Rs.3410080/-

- Against Resort & Hotel Business: Rs.23 03073/-

ServiceTax Demand Disputed and pending with AppellateTribunal: -

- Against Resort & Hotel Business: Rs.482101/-

ServiceTax Demand Disputed and pending with Add Comm : -

- Against Resort & Hotel Business: Rs.776572/-

Subject to above, the Company has no undisputed amounts payable in respect of IncomeTax, Sales/VAT Tax, Wealth- Tax, Customs Duty and Excise Duty, Cess which have remained outstanding as on 31 st March, 2012 for a period of more than six months from the date they became payable.

X. The Company has no accumulated losses during the year and it has not incurred cash losses during the year or financial year immediately proceeding.

XI. On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks.

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

XIII. The Company is not a chit fund and nidhi / mutual benefit fund/ society.Therefore, the provisions of clause 4(xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments.

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

XVI. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained,

XVII. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

XVIII. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Registered maintained under section 301 of the Act.

XIX. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.

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

XXI. Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For, ANIL S. SHAH & CO.

Chartered Accountants

ANIL S. SHAH

Place Ahmedabad (Partner)

Place. Ahmedabad Rrm Reg Nq . 100474W Date: 14/08/2012 Member No.: 16613

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Mar 31, 2011

We have audited the attached Balance-Sheet of STERLING GREENWOODS LIMITED as on 31/03/2011, related Profit & Loss Account of the company for the year ended on that date annexed thereto and Cash Flow Statement for the period ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 misstatements. An Audit Includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well evaluating the overall financial statements presentation. We believed that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of sub- section (4-A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a Statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (2) above, we state that:

(i) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purpose of our Audit.

(ii) In our opinion, the Company has kept proper Books of Accounts as required by law so far as appears from our examination of the Books.

(iii) The said Balance Sheet and Profit & Loss Account are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report have been prepared in compliance with the accounting standards referred to in sub section (3C) of section 211 of the Act, to the extent applicable.

(v) On the basis of our review of the written representations received from the directors as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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 ;

(vi) being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 ;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the company Act, 1956 in the manner so required and give a true and fair view :

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

(b) In the case of Profit & Loss Account of the Profit for the year ended on that date.

And

(c) In the case of 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)

I. Fixed Assets: -

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

The management has physically verified all the fixed assets at the year end. No material discrepancies have been noticed on such verification.

During the year the Company has not disposed of substantial part of its fixed assets.

II. Inventories :-

(a) The stocks of land and stores have been physically verified during the year by the management. In our opinion,

the frequency of verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of stock records, in our opinion the stock records, in our opinion the company is maintaining proper records of stock. No material discrepancies have been noticed on physical verification of stocks as compared to book records.

III. (a) According to information and explanations given to us, the company has not granted interest free unsecured loans

payable on demand covered in the register maintained under section 301 of the Companies Act, 1956.

(b) According to information and explanations given to us, the Company had taken loans from parties covered in the register maintained under section 301 of the Companies Act, 1956. Particulars are as under.

Particulars Amount

Taken or Accepted in year Rs. 1,71,12,636/-

Repaid During the year Rs. 1,17,43,315/-

Closing Balance Rs. 1,90,77,816/-

(ii) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(i) As per the information and explanation given to us, the Company is regularly receiving the principal amounts as stipulated and has been regular in the payment of interest where applicable.

IV. The management of Company is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibly, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure. The objective of internal control structure are to provide management with reasonable, but not absolute assurance that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principals. Because of inheriting limitations of internal control structure, errors/irregularities may occur and not be detected. Also, projections of any evaluation of the structure to future period is subject to the risk that procedures may become inadequate because of changes in conditions or that effectiveness of the design and operation policies and procedure may deteriorate.

V. In our opinion and according to the information and explanations given to us and on the basis of audit procedures performed in accordance with generally accepted audit practices in India for the purpose of reporting on true and fair view of financial statements, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with for the purchase of fixed assets and for the sale of Services. There is no continuing failure to correct major weaknesses in the internal control.

VI. (a) According to the information given to us, there are transactions during the year that need to be entered into a

register in pursuance of section 301 of the Companies Act, 1956 and they are so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements (including transactions of finance) exceeding the value of rupees five lakhs during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

VII. The Company has accepted deposits from the public within the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 subject to rules and regulations provided there under.

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

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

X. According to the information and explanation given to us, there were undisputed amounts payable in respect of Income- Tax, & Service Tax as follows:

(a) Service Tax Demand disputed and pending with Appellate Tribunal:- - Against Resort & Hotel Business: Rs.23,03,073/- in which the company has deposited Rs. 1150000/- Service Tax Penalty Disputed and pending with Appellate Tribunal: -

- Against Real Estate Business: Rs. 34,10,080/-

- Against Resort & Hotel Business : Rs.23,03,073/

(b) Income Tax Liabilities (For the Asst. Year 1995-96) of which appeal by Income Tax Department is pending before the Income Tax Appellate Tribunal against the demand reduced by the C.I.T. Company is contingently liable for the amounting of Rs.92,61,016/-. Company has not made the provisions for the above nor it has provided demand of interest U/s. 220 amounting of Rs.3,00,000 paid during the year accounted with Advance Income Tax.

Subject to above, the Company has no undisputed amounts payable in respect of Wealth-Tax, Customs Duty and Excise Duty which have remained outstanding as on 31st March, 2011 for a period of more than six months from the date they became payable.

XI. The Company has no accumulated losses during the year and it has not incurred cash losses during the year or financial year immediately proceeding.

XII. On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks.

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

XIV. The Company is not a chit fund and nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

XV. The Company is not dealing or trading in shares, securities, debentures and other investments.

XVI. The Company has not given any guarantees for loans taken by others from banks and financial institutions during the year.

XVII. The Company has not obtained any term loan during the year.

XVIII. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

XIX. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Registered maintained under section 301 of the Act.

XX. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.

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

XXII. Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

Place : Ahmadabad For, Baheti Bhadada & Associates Chartered Accountants Date : 24/05/2011

B. K. BAHETI

(Partner)

(Sd/-)

Firm Reg. No. : 100865W

---

Mar 31, 2010

We have audited the attached Balance Sheet of STERLING GREENWOODS LIMITED, as at 31/03/2010 and related Profit & Loss Account of the company for the year ended on that date annexed thereto and 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.

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 misstatements. An Audit Includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

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

Further to our comments in the Annexure referred to in paragraph (1) above, we state 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, the Company has kept proper books of account as required by law so far as appears from our examination of the Books.

- (c) The said Balance Sheet and Profit & Loss Account are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report have been prepared in compliance with the accounting standards referred to in sub section (3C) of section 211 of the Act, to the extent applicable.

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

(g) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit & Loss Account together with the notes thereon, give the information required under the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet of the state of affairs of the Company as at 31st March, 2010.

(b) In the case of Profit & Loss Account of the Profit for the year ended on that date.

(c) In the case of 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)

I. Fixed Assets: -

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

The management has physically verified all the fixed assets at the year end. No material discrepancies have been noticed on such verification.

During the year the Company has not disposed of substantial part of its fixed assets.

II. Inventories :-

(a) The stocks of finished goods, stores and spares have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of stock records, in our opinion the stock records, in our opinion the company is maintaining proper records of stock. No material discrepancies have been noticed on physical verification of stocks as compared to book records.

III. (a) According to information and explanations given to us, the company has not granted interest free unsecured loans =

payable on demand covered in the register maintained under section 301 of the Companies Act, 1956.

(b) According to information and explanations given to us, the Company had taken loans from parties covered in the - register maintained under section 301 of the Companies Act, 1956. Particulars are as under.



Particulars Amount

Taken or Accepted in year Rs. 1,02,49,136/-

Repaid During the year Rs. 57,20,569/-

Closing Balance Rs. 1,52,57,525/-



(ii) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(i) As per the information and explanation given to us, the Company is regularly receiving the principal amounts as stipulated and has been regular in the payment of interest where applicable.

IV. The management of Company is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibly, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure. The objective of internal control structure are to provide management with reasonable, but not absolute assurance that transactions are executed in accordance with managements authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principals. Because of inheriting limitations of internal control structure, errors/irregularities may occur and not be detected. Also, projections of any evaluation of the structure to future period is subject to the risk that procedures may become inadequate because of changes in conditions or that effectiveness of the design and operation policies and procedure may deteriorate.

V. In our opinion and according to the information and explanations given to us and on the basis of audit procedures performed in accordance with generally accepted audit practices in India for the purpose of reporting on true and fair view of financial statements, there are adequate internal control procedures commensurate with the size of the

Company and the nature of its business with for the purchase of fixed assets and for the sale of Services. There is no continuing failure to correct major weaknesses in the internal control.

VI. (a) According to the information given to us, there are no transactions during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements (including transactions of finance) exceeding the value of rupees five lakhs during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

VII. The Company has not accepted deposits from the public within the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

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

X. According to the information and explanation given to us, there were undisputed amounts payable in respect of Income- Tax, & Service Tax as follows:

(a) Service Tax Demand disputed and pending with Appellate Tribunal:-

- Against Resort & Hotel Business: Rs. 23,03,073/-

Service Tax Penalty Disputed and pending with Appellate Tribunal: -

- Against Real Estate Business: Rs. 34,10,080/-

- Against Resort & Hotel Business: Rs. 23,03,073/-



(b) Income Tax Liabilities (For the Asst. Year 1995-96) of which appeal by Income Tax Department is pending before the Income Tax Appellate Tribunal against the demand reduced by the C.I.T. Company is contingently liable for the amounting of Rs.92,61,016/-. Company has not made the provisions for the above nor it has provided demand of interest U/s. 220 amounting of Rs.2,00,000 paid during the year accounted with Advance Income Tax.

Further the Company has no undisputed amounts payable in respect of Wealth-Tax, Customs Duty and Excise Duty which have remained outstanding as on 31st March, 2010 for a period of more than six months from the date they became payable.

XI. The Company has no accumulated losses during the year and it has not incurred cash losses during the year or financial year immediately proceeding.

XII. On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks.

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

XIV. The Company is not a chit fund and nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xii) of the Companies (Auditors Report) Order, 2003 are not applicabe to the company.

XV. The Company is not dealing or trading in shares, securities, debentures and other investments.



XVI. The Company has not given any guarantees for loans takein by others from banks and financial institutions during the year.

XVII. The Company has not obtained any term loan during the year.

XVIII. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

XIX. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Registered maintained under section 301 of the Act.

XX. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.

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

Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.



For, Baheti Bhadada & Associates

Chartered Accountants

B. K. BAHETI

(Partner)

(sd/-)

Firm Reg. No.: 100865W

Place: Ahmedabad Date: 31/05/2010