Bhagwati Banquets & Hotels Ltd

To,

The Members of

BHAGWATI BANQUETS AND HOTELS LIMITED

We have audited the attached Balance Sheet of BHAGWATI BANQUETS AND HOTELS LIMITEDas at 31^st March 2012, and also the statement of Profit and Loss Account andCash Flow Statement of the Company for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 (CARO), as amended,issued by the Central Government of India in terms, of sub-section (4A) of Section 227 ofthe Companies Act, 1956, we enclose in the Annexure a Statement on the matters specifiedin paragraphs 4 and 5 of the said Order to the extent applicable.

Further to our comments in the Annexure referred to paragraph (3) above, we reportthat;

a. we have obtained all the information and explanations, which to the best of ourknowledge 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 thecompany so far as it appears from our examination of those books;

c. the Balance Sheet, statement of Profit and Loss Account and Cash Flow Statementdealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, statement of Profit and Loss Account and CashFlow Statement dealt with by this report comply with the accounting standards referred toin Sub-Section (3C) of Section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the Directors, as on 31^stMarch, 2012 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on 31^st March, 2012 from being appointed as aDirector 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 explanationsgiven to us, the said accounts, read together with the Significant Accounting Policies andnotes thereon give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India;

i. in the case of the Balance Sheet, of the state of affairs of the company as at 31^stMarch, 2012;

ii. in the case of the statement of Profit and Loss Account, of the profit of theCompany for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS’ REPORT

(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)

i. (a) The Company has maintained proper record showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us, these fixed assets have been physically verified by themanagement, in accordance with a phased program of verification, which in our opinion, isreasonable, considering the size of the Company and nature of its assets. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) The Company has not disposed off any substantial part of fixed assets during theyear, so as to affect its going concern status.

ii. (a) As explained to us, the inventories have been physically verified by themanagement during the year.In our opinion, the frequency of such verification isreasonable.

(b) In our opinion and according the information and explanation given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company has maintained proper records of inventories. As explained to us, therewas no material discrepancies noticed on physical verification as compared to the bookrecords.

iii. In respect of unsecured loans granted to companies covered in the registermaintained under section 301 of the Companies Act, 1956 and according to the informationand explanations given to us -

(a) During the year, the Company has not given unsecured Loans to any parties coveredin the register maintained under section 301 of the Companies Act, 1956.

(b) According the information and explanations given to us, the Company has not takenunsecured loans from any parties covered in the register maintained under Section 301 ofthe Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business, with regard to the purchase of inventory, fixed assets and withregard to the sale of goods and services. During the course of our audit, we have notobserved any continuing major weakness on such internal controls of the Company.

v. In respect of the contracts or arrangements referred to in Section 301 of theCompanies act 1956;

(a) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements that need to be entered intothe Register maintained under of Section 301 of the Companies Act, 1956 have been soentered in the register required to be maintained under that section;

(b) In our opinion and according to the information and explanations given to us, wheresuch transactions are in excess of Rs. Five Lacs in respect of any party, the transactionshave been made at prices which are, prima-facie, reasonable having regard to theprevailing market prices for similar transactions with other parties at the relevant time.

vi. According to the information and explanations given to us, the Company has notaccepted any deposits from the public during the year. Therefore the provisions of clause(vi) of paragraph 4 of the Companies (Auditor’s Report) Order, 2003 are notapplicable to the Company.

vii. In our opinion, the Company has an Internal Audit System commensurate with itssize and nature of its business.

viii. The maintenance of cost records has not been prescribed by the Central Governmentunder Clause (d) of SubSection (1) of Section 209 of the Act. Accordingly, the provisionsof clause (viii) of paragraph 4 of the companies (Auditor’s Report) Order, 2003 isnot applicable to the company.

ix. (a) According to the Information and explanation given to us, the Company isgenerally regular in depositing undisputed statutory dues including Provident Fund,Investor Education and Protection Fund, Employee State Insurance Fund, Income Tax, WealthTax, Excise Duty, Sales Tax, Cess and any other statutory dues with the appropriateauthorities.

(b) According to the Information and explanation given to us, no undisputed amountpayable in respect of statutory dues applicable to it were in arrears as at 31st March,2012 for a period of more than six months from the date they became payable except below :

(c) According to the Information and explanation given to us, there are no dues ofProvident Fund, Employee State Insurance Fund, Income Tax, Wealth Tax, Excise Duty, SalesTax, Cess and any other statutory dues which have not been deposited on account of anydispute.

x. The Company does not have accumulated losses as at 31st March, 2012. The Company hasnot incurred any cash losses in the financial year and in the immediately precedingfinancial year.

xi. In our opinion and according to the explanations given to us, the Company has notdefaulted in repayment of dues to a financial institution or bank or debenture holders.

xii. In our opinion and according to the explanations given to us, the Company has notgranted loans and advance on the basis of security by way of pledge of shares, debenturesand other securities.

xiii. In our opinion, the company is not a chit fund or a Nidhi or Mutual BenefitFund/Society; Accordingly, the provisions of clause (xiii) of paragraph 4 of the Companies(Auditor’s Report) Order, 2003 are not applicable to the company.

xiv. In our opinion and according to the explanations given to us, the Company is notdealing in or trading in shares, securities, debentures and other investments. Therefore,the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 arenot applicable to the company.

xv. In our opinion and according to the explanations given to us, the Company has notgiven guarantee for loans taken by others from bank or financial institutions during theyear.

xvi. In our opinion and according to the explanations given to us, the term loans havebeen applied for the purpose for which the loans were obtained.

xvii. In our opinion and according to the explanations given to us, on the basis of anoverall examination of the Balance Sheet and Cash flow of the company, we report that nofunds raised on short term basis have been used for long term investment.

xviii. According to the information and explanations given to us, the company has notmade any preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Companies Act, 1956.

xix. During the year covered by our audit report, the Company has not issued anydebentures.

xx. During the year covered by our audit report, the Company has not raised any moneyby way of a public issue during the year.

xxi. To the best of our knowledge and belief and according to the information andexplanations given to us, no material fraud on or by the company has been noticed orreported during the course of our audit.