1.  We have audited the attached Balance Sheet of EIH Associated Hotels
 Limited as at 31st March, 2012, the Statement of Profit and Loss 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, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (iv) in our opinion, the Balance Sheet, the Statement of Profit and
 Loss and the 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, 2012 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2012 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 Notes 1 to 43 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, 2012;
 
 (b) in the case of the Statement of Profit and Loss, 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 fixed assets have not been physically verified by the
 Management during the year but there is a regular programme of
 verification 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 verification which were not material have been properly
 dealt with in the books of accounts.
 
 (c) During the year no substantial parts of fixed assets have been
 disposed off by the Company.
 
 ii.  (a) The inventory has been physically verified by the Management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, 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) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material and have been properly dealt with in
 the books of accounts.
 
 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 Clause iii(a) above, 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, during
 the year 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)
 and 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.  (a) According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 that need to be entered into the Register maintained under Section 301
 of the Act have been so entered.
 
 (b) According to the information and explanations given to us, the
 transactions made in pursuance of contracts or arrangements entered in
 the Register maintained under Section 301 of the Act during the year
 cannot be compared in absence of market quotations for similar items.
 
 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 dues of income tax, wealth tax, service tax, customs duty,
 excise duty and cess which have not been deposited on account of any
 dispute other than the disputed sales tax as indicated below:
 
 Sl.
 No.     Name of the     Nature of the    Forum where     Amount
         statute         dues             dispute is     (Rupees in
                                          pending         Millions)
 
 1       Sales Tax:
 
 a)      Orissa Sales    Sales Tax        i) Sales Tax
         Tax Act                          Tribunal, Orissa   0.39
 
                                          ii) Orissa High
                                          Court              0.31
 
 b)      Uttar Pradesh   Sales Tax        Uttar Pradesh
         Commercial                       Commercial Tax
         Tax Act                          Appellate
                                          Authority         0.50
 
         Total                                              1.20
 
 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 and
 banks.
 
 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 no guarantee outstanding as regards loan taken by
 the Subsidiary Company. Accordingly the provisions of Clause (xv) of
 paragraph 4 of the aforesaid Order are not applicable to 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 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
 
                                                      Partner
 
 Gurgaon                               Membership Number 8608
 
 28th May, 2012            Firm''s Registration Number 301072E