EIH

1.  We have audited the attached Balance sheet of EIH LIMITED (the
 Company) as at 31st March, 2009, the ProfIt and Loss Account and also
 the Cash Flow Statement for the year ended on that date annexed
 thereto, in which are incorporated the Branch Accounts audited by us.
 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 the 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 (Auditor’s report) order, 2003, as
 amended by the Companies (Auditor’s report Amendment) order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of section 227 of the Companies Act 1956 (‘the Act’), and on the basis
 of such checks as we considered appropriate and according to the
 information and explanations given to us, we enclose in the 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 report that:
 
 i) 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;
 
 ii) 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;
 
 iii) the Balance Sheet, ProfIt and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv) in our opinion, the Balance Sheet, ProfIt and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the Act;
 
 v) on the basis of written representations received from the Directors
 as on 31st March, 2009 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2009 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Act;
 
 vi) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read in conjunction
 with schedules 1 to 24 give the information required by the Act in the
 manner so required and give a true and fair view in conformity with the
 accounting principles generally accepted in India;
 
 a) in the case of the Balance sheet, of the state of affairs of the
 Company as at 31st March, 2009;
 
 b) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITOR’S REPORT
 
 (referred to in paragraph 3 of our report of even date)
 
 i. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) All the assets have not been physically verified by the Management
 during the year but there is a regular programme of verifcation which,
 in our opinion, is reasonable having regard to the size of the Company
 and the nature of its assets. The discrepancies noticed on such
 verifcation are being reconciled.
 
 (c) during the year the Company has not disposed off any substantial
 part of its fixed assets, which could affect its continuation as a
 going concern.
 
 ii. (a) The inventory has been physically verified by the Management
 during the year. In our opinion, the frequency of verifcation is
 reasonable.
 
 (b) In our opinion, the procedures of physical verifcation 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) the Company is maintaining proper records of inventory. the
 discrepancies noticed on verifcation between the physical stocks and
 the book records were not material.
 
 iii. (a) the Company has not granted any loans, secured or unsecured,
 to companies, firms or other parties covered in the Register maintained
 under section 301 of the Act.
 
 (b) In view of our comments in paragraph iii(a) above, the provisions
 of Clauses iii(b), iii(c) and iii(d) of paragraph 4 of the aforesaid
 order are not applicable to the Company.
 
 (c) the Company has not taken any loan, secured or unsecured, from
 companies, firms or other parties covered in the Register maintained
 under Section 301 of the Act.
 
 (d) In view of our comment in paragraph iii(c) above, clauses iii(f),
 iii(g) of paragraph 4 of the aforesaid order are not applicable to the
 Company.
 
 iv. in our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory, fixed assets and with regard to the sale of
 goods and services. Further, there is no continuing failure to correct
 major weaknesses in internal control system.
 
 v. on the basis of our examination of the books of account and
 according to the information and explanations given to us, the Company
 has not entered into any transaction during the year that need to be
 entered into the register maintained under section 301 of the Act and
 therefore clauses v(a) and v(b) of paragraph 4 of the aforesaid order
 are not applicable to the Company.
 
 vi. the Company has not accepted any deposit from the public during the
 year under sections 58A and 58AA of the Act and the Companies
 (Acceptance of deposits) rules, 1975.
 
 vii. In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 viii. the Central Government has not prescribed maintenance of cost
 records under section 209(1)(d) of the Act for the Company.
 
 ix. (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees’ state insurance,
 income tax, sales tax, wealth tax, service tax, customs duty, excise
 duty, cess and other material statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, there
 are no undisputed amounts payable in respect of income tax, wealth tax,
 service tax, sales tax, customs duty, excise duty and cess which were
 outstanding as at 31st March, 2009 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 wealth tax, service tax and cess which have not been
 deposited on account of any dispute other than disputed income tax,
 sales tax, customs duty and excise duty as indicated below:
 
 Sl.No.  Name of the Statute Nature of
 
 dues
 
 1.        Income Tax                       Income Tax
           Act, 1961
           Total
 
 2.       Sales Tax Acts of                 Sales Tax
          various states
          Total
 
 3.      Customs Act, 1962                  Customs
                                            duty
 4.      Central excise Act, 1944           Excise duty
 
 Forum where           Amount
 dispute is          (rupees in
 pending             Million)
 
 CIT (Appeals)          87.41
 ITAT, Kolkata         307.09
                       394.50
 Maharashtra
 Sales Tax
 Tribunal               15.26
 
 Deputy
 Commissioner of
 Commercial Taxes        1.85
 
 Additional
 Commissioner of
 Commercial Taxes        4.84
 
 Assistant
 Commissioner
 (Appeals)-
 Commercial Taxes        2.58
                        24.53
 
 Commissioner of
 Customs (Appeals)     452.50
 
 Commissioner of
 Central excise
 (Appeals), Mumbai       9.86
 
 x. The Company has no accumulated losses and has not incurred any cash
 loss during the year covered by our Report and the immediately
 preceding financial year.
 
 xi. Based on our audit procedures and, according to the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of dues to financial institutions, banks or
 debenture holders.
 
 xii. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other similar
 securities.
 
 xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/ society. therefore, the provisions of clause (xiii) of
 paragraph 4 of the aforesaid 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 (xiv) of paragraph 4 of the aforesaid order are
 not applicable to the Company.
 
 xv. The Company has given guarantees for loans taken by its
 subsidiaries and associate company from banks and financial
 institutions. According to the information and explanations given to
 us, we are of the opinion that the terms and conditions on which the
 Company has given guarantees for loans taken from banks and financial
 institutions are not, prima-facie, prejudicial to the interest of the
 Company.
 
 xvi. According to the information and explanations given to us, the
 term loans raised by the Company have been applied for the purpose for
 which they were raised.
 
 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
 investments.
 
 xviii. The Company has not raised any money by issue of shares during
 the year.  therefore, the provisions of clause (xviii) of paragraph 4
 of the aforesaid order are not applicable to the Company.
 
 xix. The Company has not issued unsecured debentures during the year
 under audit.  Accordingly, the provisions of clause (xix) of paragraph
 4 of the aforesaid order are not applicable to the Company.
 
 xx. The Company has not raised any money by way of public issue during
 the year.  therefore, the provisions of clause (xx) of paragraph 4 of
 the aforesaid order are not applicable to the Company.
 
 xxi. During the course of our examination of the books of account
 carried out in accordance with Generally Accepted Auditing Practices,
 we have neither come across any instance of fraud on or by the Company
 nor have we been informed of any such case by the Management.
 
                                                 For RAY & RAY 
                                         Chartered Accountants
 
                                                     R. N. ROY 
 New Delhi                                            Partner
 30th June, 2009                        Membership Number 8608