Gandhinagar Leasing & Finance Ltd Auditor Reports

To

The members of

GANDHINAGAR LEASING AND FINANCE LIMITED

Gandhinagar

(1) We have audited the attached Balance Sheet of M/S. GANDHINAGAR LEASING AND FINANCE LIMITED, as 31st March, 2012, the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are signed under reference to this report. These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

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

(3) As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) Amended Order 2004 issued by the Central Government of India in terms of section 227(4A) of The Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to information and explanation given to us, we enclose in the annexure a statement on the matters specified in paragraphs (4) and (5) of the said order to the extent applicable to the Company, for the year under consideration.

(4) Further to our report as stated above in Para ( 3 ) of this report and subject to notes on accounts & significant accounting policies, we further broadly report that :-

4.1 In our opinion and to the best of our information and according to the explanations given to us Balance Sheet as at 31st March, 2012 and Profit and Loss Account for the year ended on 31-3-2012 and Cash Flow statement dealt by this report, read with the notes to Accounts and Accounting policies, comply with the applicable Accounting Standards defined in Sub Section (3C) of Section 211 of the Companies Act, 1956. And gives information required by the Companies Act, 1956 in the manner so required.

4.2 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.

4.3 In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.

4.4 The Balance Sheet, Profit and Loss Account & Cash Flow statement dealt with by this report are in agreement with the books of accounts of the Company.

4.5 Based on the representations made by all the Directors of the Company and taken on records by the Board of Directors of the company and in accordance with the information and explanations as made available, the Directors of the Company do not, prime facie, have any disqualification as referred to in clause (q) of subsection 274 of the Act.

4.6 In our opinion and the best of our information and according to the explanation given to us, the said accounts, subject to notes to the accounts and the accounting policies, 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:-

1) In the case of Balance sheet, of the state affairs of the Company as 31st March, 2012 ;

2) In the case of Profit and Loss Account of the Company of the Profit earned by the Company for the Financial year ended on 31st March, 2012.

3) In the case of Cash Flow statement of the company for the Financial year 2011-2012.

ANNEXURE TO THE AUDITOR’S REPORT

(Annexure referred to in paragraph 3 of our report of even date)

1 (a) The Company has maintained proper records showing full particulars including quantitative details and Situation of Fixed Assets.

(b) Fixed Assets have been physically verified by the management according to the regular programmed of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. There were no discrepancies noticed on such physical verification.

(c) There was no disposal of fixed assets during the year.

2 The company does not have Inventories, Stores, Spare Parts and Raw Materials and hence question of physically verification and frequency of verification does not arise.

3 According to the information and explanation given to us, the Company has not taken any loans Secured or unsecured from companies, firms, or other parties listed in Register maintained under Section 301 of the Company Act, 1956 or from the Companies under the same management as defined under sub-section (1B) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of shares held for investment or stock in trade. During the course of our audit, no major week ness has been notice in the internal control system in respect of these areas.

5 In our opinion and according to the information and explanations given to us, transactions of Rent Paid to Gandhinagar Hotels Ltd. and Lease Assets given to Gandhinagar Hotels Ltd. and Lease Rent received from the Gandhinagar Hotels Ltd. have been made in pursuance of contracts or arrangements that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 are mentioned. The said transactions are at Market rate and not prejudicial to the interest of the Company.

6 In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the Public within the meaning of Section 58A, 58AA or any other relevant provisions of The companies Act, 1956 and as per applicable Rules under the Companies (Acceptance of Deposits) Rules 1975 . We are informed that no order has been passed by the Company Law Board or Reserve Bank of India or any Court or any other Tribunal against the Company.

7 The Company has an Internal Audit System, the same is commensurate with size & nature of business of the Company.

8 We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government. The Central Government has not prescribed the maintenance of any records under Section 209(1)(d) of the Companies Act, 1956 for the Finance Leasing and Investment Company.

9 (a) The Company is generally regular in depositing Statutory Dues.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, value added tax, Central Sales Tax, service tax, wealth tax, custom duty, Excise Duty, cess were in arrears as at 31st March, 2012 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, there is no outstanding dues in respect of income tax, value added tax, Central Sales Tax, service tax, wealth tax, custom duty, Excise Duty, cess, which have not been deposited on account of any dispute.

10 The Company has accumulated losses at the end of the financial year and has earned profit in the current year.

11 The Company does not have any borrowings from financial institutions or banks or issued any debentures and hence question of repayment of dues and default of repayment does not arise.

12 According to the information and explanation given to us, the Company has not granted any loans and advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The Company is not a chit fund or a Nidhi / Mutual fund / society , therefore, the clause 4 (xiii) of the order is not applicable to the Company.

14 In our opinion, the Company is dealing in or trading in share, securities, debentures and other investment for which specific records are maintained.

15 According to the information and explanation given to us, during the year the Company has not given any guarantee for loans taken by others, from banks or financial institutions.

16 According to the information and explanations given to us, the Company has not taken any term loan during the year.

17 According to the information and explanations given to us, and on the basis of the Cash Flow Statement and other records examined by us, as well as on an overall basis, we report that the broadly funds raised on long term basis have not prima-facie been used for short term investment and vice versa.

18 According to information and explanation given to us, during the year the Company has not made preferential allotment of convertible warrants and / or shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

19 According to information and explanation given to us, the Company has not issued any debentures during the year and hence the question of creating any security or charge in respect thereof does not arise and hence the provisions of clause 4 (xix) of the companies (Auditor’s Report) Order,2003 are not applicable to the Company.

20 During the year, the Company has not raised any money through a public issue.

21 During the course of our examination of books of accounts carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, during the year, nor have we been informed of such case by the management.