Gujarat Hotels Ltd

1. We have audited the attached Balance Sheet of GUJARAT HOTELS LIMITED as on 31^stMarch, 2011 and also the Profit and Loss Account of the Company and the Cash FlowStatement for the year ended on that date. These financial statements are theresponsibility of the Company's Management. Our responsibility is to express an opinion onthese financial statements based on our audit.

2. 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 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.

3. As required by the Companies (Auditor's Report) Amended Order, 2004 issued by theCentral Government in terms of Section 227(4A) of the Companies Act, 1956, and we give inthe 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 in 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 purpose of our audit.

(b) In our opinion, the Company has kept proper books of accounts as required by law sofar as it appears from our examination of the books.

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account.

(d) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statementcomply with Accounting Standards referred to in sub-section (3C) of Section 211 of theCompanies Act, 1956.

(e) On the basis of written representations received from the directors as on 31^stMarch, 2011 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31^st March, 2011 from being appointed asDirectors 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 statement of Accounts together with the notes annexed thereto givethe information required by the Companies Act, 1956 as amended from time to time in themanner so required, and give a true and fair view:

(i) In the case of Balance Sheet of the state of affairs of the Company as at 31^stMarch, 2011,

(ii) In the case of Profit and Loss Account of the profit for the year ended on thatdate, and

(iii) In the Cash Flow Statement, of the cash flows for the year ended on that date.

(Referred to in Paragraph 3 of our report of even date on the accounts GUJARAT HOTELSLIMITED, for the year ended on 31st March, 2011.)

(i) In respect of its Fixed Assets:

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

(b) There is a regular programme of verification which, in our opinion, is reasonablehaving regard to the size of the Company and the nature of its assets. All the assets havebeen physically verified by the management and found in order. No material discrepancieshave been noticed on such verification.

(c) No substantial (or major) part of the fixed assets has been disposed of during theyear.

(ii) There are no inventories and hence the related paragraphs of the Order are notapplicable.

(iii) According to the information and explanation given to us, there are no loans,secured or unsecured, granted or taken by the Company to / from companies, firms or otherparties covered in the register maintained under Section 301 of the Companies Act, 1956during the year. Accordingly, paragraphs 4 (iii) (b), (c), (d), (e), (f) and (g) of theOrder are not applicable.

(iv) The Company has not accepted any deposits from the public during the year orearlier years. Accordingly provisions of Section 58A of Companies Act, 1956 are notapplicable to the Company.

(v) In our opinion, the internal audit functions carried out during the year by a firmof Chartered Accountants appointed by the management have been commensurate with size ofthe Company and nature of its business.

(vi) Statutory and other dues:

(a) According to the information and explanations given to us and based on the recordsexamined by us, the Company has been regular in depositing undisputed statutory dues,including Provident Fund, Investor Education and Protection Fund, Employees' StateInsurance, Income-Tax, Service Tax and any other statutory dues with the appropriateauthorities during the year.

(b) According to the information and explanations given to us, no undisputed duesoutstanding in respect of Sales Tax, Income Tax, Service Tax, Wealth Tax, Customs Duty,Excise Duty as at 31^st March, 2011 for a period of more than six months fromthe date they become payable.

(vii) The Company does not have any accumulated losses as at the end of the financialyear. The Company has not incurred cash losses during the current and the immediatelypreceding financial year.

(viii) The Company has not granted loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

(ix) The provisions of any special statute applicable to chit fund are not applicableto the Company.

(x) The Company is not dealing or trading in shares, securities, debentures and otherinvestments.

(xi) There are no guarantees given by the Company for loans taken by others from banksand financial institutions.

(xii) The Company has not obtained any term loans during the year.

(xiii) According to the Cash Flow Statement and other records examined by us and theinformation and explanations given to us, on an overall basis, funds raised on short termbasis have, prima facie, not being used during the year for long term investment (fixedassets, etc.) and vice versa.

(xiv) According to information and explanation given to us, the Company has not madepreferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Companies Act, 1956.

(xv) The Company has not issued any debentures during the year.

(xvi) The Company has not raised any money by way of Public Issues during the year.

(xvii) To the best of our knowledge and behalf and according to the information andexplanation given to us, no fraud on or by the Company was noticed or reported during theyear.

(xviii) As per the information and explanation given to us and taken into considerationthe nature Company's activities, other items of Clause A of the paragraph 4 of the CAROare not applicable to the Company.