1.  We have audited the attached Balance Sheet of Advance Lifestyles
 Limited as at March 31, 2011 and also the Profit and Loss account and
 the Cash Flow statement for the year ended on that date annexed
 thereto. 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.
 
 2.  We conducted our 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956, 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.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) During the year, the Company has given Inter Corporate Deposits
 (ICDs) to one Company (in which a director of the Company is
 interested) aggregating to Rs. 24,98,030/- (since received back).
 Approval of the Central Government in respect of the ICD given has not
 been obtained as required by Section 295 of the Companies Act 1956.
 
 (b) The management has represented that the Company has started new
 business activity related to Land Development and real estate along
 with trading of cloths by altering main objects of the Company. Hence,
 as per the information and explanations provided by the management, the
 Company will be able to continue in operation as a going concern in the
 foreseeable future.
 
 5.  Subject to the matters referred to in paragraph (4) above:
 
 a. we have obtained all the information and explanations, which to the
 best of our knowledge 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 the Company so far as appears from our examination of
 those books;
 
 c.  the Balance Sheet, Profit and Loss Account and Cash Flow statement
 dealt with by this report are in agreement with the books of account;
 
 d.  in our opinion, and to the best of our information and according to
 the explanations given to us, the Balance Sheet, Profit and Loss
 Account and Cash Flow Statement, except for expenditure incurred on
 property development shown under work in progress under the head
 Inventory(Refer Note No. B-(2) of Notes on Accounts, dealt with by this
 report comply with the Accounting Standards referred to in sub-section
 (3C) of section 211 of the Companies Act, 1956;
 
 e. 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 Companies Act, 1956, in the manner so required and read
 together with other notes on accounts, the financial statements give a
 true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 ii) in the case of the Profit and Loss Account, of the loss for the
 year ended on that date; and
 
 iii) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 6. We further report that, on the basis of the written representations
 received from the directors, as on March 31, 2011, and taken on record
 by the Board of Directors, we report that none of the directors is
 disqualified as on March 31, 2011 from being appointed as a director in
 terms of clause (g) of sub-section (1) of Section 274 of the Companies
 Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 Annexure referred to in paragraph 3 of our report of even date to the
 members of Advance Lifestyles Limited (Formerly known as The Ahmedabad
 Advance Mills Limited) on the financial statements for the year ended
 March 31, 2011.
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management during
 the year and in our opinion the frequency of verification is reasonable
 having regard to the size of the Company and the nature of its assets.
 No material discrepancies were noticed on such physical verification.
 
 (c) During the year no fixed assets have been disposed off.
 
 (ii) (a) The inventories have been physically verified during the year
 by the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company is maintaining proper records of inventories
 and there were no discrepancies noticed on physical verification.
 
 (iii) (a) As per information and explanations given to us, the Company
 has granted unsecured loans aggregating Rs.2,33,39,198/- to two
 companies covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the period was
 Rs.7,04,98,991/-.
 
 (b) As per the information and explanations given to us, the rate of
 interest and other terms and conditions at which the loans have been
 given to the companies covered in the register maintained under section
 301 of the Companies Act, 1956 are prima facie not prejudicial to the
 interest of the Company.
 
 (c) As per information and explanations given to us, the Company is
 regular in receipt of the principal amount and interest thereon.
 
 (d) The Company has taken unsecured loans aggregating to
 Rs.8,19,58,636/- from two companies covered in the register maintained
 under section 301 of the Companies Act, 1956, which were outstanding at
 the year end. The maximum amount involved during the year was
 Rs.8,19,58,636/-.
 
 (e) As per the information and explanations given to us, the rate of
 interest and other terms and conditions on which loans have been taken
 from companies, covered in the register maintained under section 301 of
 the Companies Act, 1956 are prima facie not prejudicial to the interest
 of the Company.
 
 (f) As per the information and explanation given to us, the Company is
 regular in payment of the principal amount and interest thereon.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are generally adequate internal control systems
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weakness in internal control systems.
 
 (v) According to the information and explanation given to us, company
 has not carried out any contract or arrangements referred to in Section
 301 of the Act, hence Clause 4(v) of the Order is not applicable to the
 company.
 
 (vi) The Company has not accepted any deposits from the public to which
 the provisions of section 58A, 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Companies (Acceptance of Deposits)
 Rules, 1975 apply.
 
 (vii) Company''s internal audit is carried out by a Chartered
 Accountant. In our opinion and according to the information and
 explanations given to us, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) In our opinion and according to the information and explanations
 given to us, the cost records as prescribed under clause (d) of sub-
 section (1) of section 209 of the Act, have not been maintained by the
 Company during the period, as there was no manufacturing activity
 except trading of cloth and initiation of property development project.
 
 (ix) (a) According to the records of the Company and information and
 explanations given to us, statutory dues including provident fund,
 employees state insurance (E.S.I.C.), income tax, sales tax, service
 tax, cess and other material statutory dues as applicable to it have
 generally been regularly deposited during the year under audit with the
 appropriate authorities. As explained to us, the Company did not have
 any dues on account of investor education and protection fund, customs
 duty, excise duty and wealth tax.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees
 state insurance (E.S.I.C), income tax, sales tax, service tax, cess and
 other material statutory dues as applicable were in arrears, as at
 March 31, 2011 for a period of more than six months from the date they
 became payable.
 
 (c) According to the information and explanations given to us, there
 are no dues of Income Tax/ Sales Tax/ Service Tax/ Customs Duty/ Wealth
 Tax/ Excise Duty or Cess that have not been deposited on account of any
 dispute.
 
 (x) In our opinion, there are accumulated losses at the end of the
 financial year. The Company has incurred cash losses during the
 financial year covered by our audit. The Company had not incurred cash
 losses during the immediately preceding financial year.
 
 (xi) The company has not taken loan from bank or financial institution
 and has also not issued debentures. Hence, clause 4(xi) of the order is
 not applicable to the company.
 
 (xii) Based on the examination of our records and the information and
 explanations given to us, the Company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society.  Therefore, the provisions of clause 4
 (xiii) of the Order are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4 (xiv) of the Order are not applicable to the
 Company.
 
 (xv) According to information and explanations given to us, the Company
 has not given guarantee for loans taken by others from banks or
 financial institutions. Accordingly, the provisions of clause 4 (xv) of
 the Order are not applicable to the Company.
 
 (xvi) The Company has not taken any term loans during the year under
 audit. Accordingly, the provisions of clause 4 (xvi) of the Order are
 not applicable to the Company.
 
 (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) According to the information and explanations given to us, 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) The Company has not issued any debentures. Accordingly, the
 provisions of clause 4 (xix) of the Order are not applicable to the
 Company.
 
 (xx) The Company has not raised any money by way of public issues.
 Accordingly, the provisions of clause 4 (xx) of the Order are not
 applicable to the Company.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                          For DHIREN SHAH & CO.
 
                                          Chartered Accountants
 
                                          Firm Reg. No. 114633W
 
                                                    Dhiren Shah
 
 Place: Ahmedabad                                    Proprietor
 
 Date : 30-05-2011                         Membership No. 35824