Ras Resorts & Apart Hotels Ltd

To The Members of

We have audited the attached Balance Sheet of RAS RESORTS AND APART HOTELS LIMITED as at31st March, 2012 and the Profit and Loss Account for the year ended on that date, and alsothe cash flow statement for the year ended on that date annexed thereto. These financialstatements are the responsibility of the Company's management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

1. 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 check basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovernment in terms of section 227(4A) of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(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, proper books of accounts as required by the law have been kept bythe Company so far as it appears from our examination of the books.

(c) The Balance Sheet and the Profit and Loss Account dealt with by this report are inagreement with the books of account;

(d) In our opinion, the Profit and Loss Account and Balance Sheet comply with theAccounting Standards referred to in sub-section (3C) of section 211 of the Companies Act,1956;

(e) In our opinion and based on the information and explanations given to us, none ofthe directors are disqualified as on 31st March, 2012 from being appointed as directors interms 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 notes thereon give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fairview

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch 2012;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 2 of our Report of even date on the accounts of Ras Resortsand Apart Hotels Limited for the year ended 31st March, 2012)

1. In respect of its Fixed assets:

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

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies have been noticed on such verification.

(c) The Company has not disposed off any substantial part of fixed assets so as toaffect its going concern.

2. According to information and explanations given to us, the Company's inventory ofstores, food & beverages and operating supplies have been physically verified by theManagement at reasonable intervals during the year. The Company has a perpetual inventorysystem. In our opinion, the frequency of such verification is reasonable.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/fromcompanies, firm or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956:

(a) According to the information and explanation given to us, the Company has notgranted any loan, secured or unsecured to companies, firms or other parties listed in theregister maintained under section 301 of the Companies Act, 1956;

(b) According to the information and explanation given to us, the Company has not takenany loan, secured or unsecured, from companies, firms or other parties listed in theregister maintained under section 301 of the Companies Act, 1956;

4. 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 andnature of its business for the purchase of inventory, fixed assets and sale of goods andservices. During the course of our audit, we have not observed any major weakness in theinternal control system.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956,according to the information and explanations given to us, we are of the opinion thatthere are no contracts or arrangements that need to be entered into the registermaintained under section 301 of the Companies Act, 1956.

6. According to the information and explanations given to us, the Company has notaccepted the deposit u/s. 58A, 58AA or any other relevant provisions of the Companies Act,1956 during the year.

7. In our opinion, the Company has an internal audit system commensurate with the sizeand the nature of the business.

8. According to the information and explanations given to us, the Central Governmenthas not prescribed the maintenance of cost records under clause (d) of sub-section (1) ofsection 209 of the Companies Act, 1956 to the Company.

(a) According to the records of the Company, there were no undisputed amounts payablein respect of Provident Fund, Investor Education and Protection Fund, Employee's StateInsurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cessand any other statutory dues outstanding as on 31st March, 2012, for a period of more thansix months from the date they became payable.

(b) According to the records of the Company and information and explanations given o tus there are no dues of sales tax, income tax, wealth tax, service tax, custom duty,excise duty on account of any disputes.

10. In our opinion, the Company does not have any accumulated losses at the end of thefinancial year and has not incurred cash losses during the year and in the immediatelypreceding financial year.

11. The Company has not defaulted in repayment of dues to financial institutions orbanks.

12. According to the information and explanations given to us, the Company has notgranted any loans and advances on the basis of security by way of pledge of shares,debentures or any other securities.

13. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual Fund/Society.

14. According to the information and explanations given to us, the Company does nottrade in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others from any bank or financial institution.

16. In our opinion and on the basis of information and explanations given to us, theterm loans availed by the Company were prima facie applied for the purpose for which theloans were obtained.

17. According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, during the year no funds raised onshort-term basis have been used for long-term investment by the Company.

18. The Company has not made preferential allotment of shares to Company covered in theregister maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued debentures during the year.

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

21. According to the information and explanations given to us, and to the best of ourknowledge and belief no fraud on or by the Company, has been noticed or reported duringthe year.