1.  We have audited the attached Balance Sheet of Galaxy Entertainment
 Corporation Limited (''the Company'') 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 (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'' of India (the ''Act'') and on
 the basis of such checks of the books and records of the company as we
 considered appropriate and according to the information and
 explanations given to us, we give 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 paragraph 3 above, were port 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
 Companies Act, 1956.
 
 v. 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.
 
 vi. Without qualifying our opinion, we draw attention to Note 2 q of
 Schedule T with regard to the financial statements being drawn with
 Going Concern assumption.
 
 vii. 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 give
 a true and fair view in conformity with the accounting principles
 generally accepted in lndia;
 
 a) in the case of the balance sheet,of the state of affairs of the
 Company as at March 31,2011;
 
 b) in the case of the profit and loss account, of the loss for the year
 ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure to the Auditors'' Report
 
 Referred to in paragraph 3 of the Auditors'' Report of even date to the
 members of Galaxy Entertainment Corporation Limited on the financial
 statements for the year ended March 31,2011.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) A part of the fixed assets of the Company have been physically
 verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed. In our opinion the frequency of physical verification is
 reasonable.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 (ii) (a) The inventory consisting of consumables and supplies has been
 physically verified by the management during the year. In our opinion,
 the frequency of verification is reasonable.
 
 (b) The procedures of physical verification of inventory 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 and no
 material discrepancies were noticed on physical verification carried
 out at the end of the year.
 
 (iii) (a) The Company has granted loan to subsidiary companies covered
 in the register maintained under section 301 of the Companies Act,
 1956. The maximum amount involved during the year was Rs. 2.95 Lacs and
 the year- end balance of loans granted to such parties was Rs.181.20
 lacs.
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not, prima facie, prejudicial to the interest of the
 Company.
 
 (c) The parties have repaid the principal amounts as stipulated and
 have also been regular in the payment of interest to the company.
 
 (d) In respect of the aforesaid loans, in the cases where the overdue
 amount is more than Rupees One lakh, in our opinion, reasonable steps
 have been taken by the company for the recovery of the principal
 amounts and interest, where applicable.
 
 (e) As informed, the Company has taken loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956 and repaid the same during
 the year.
 
 (f) In our opinion, the rate of interest and other terms and conditions
 for such loans are not, prima facie, prejudicial to the interest of the
 Company.
 
 (g) In respect of the aforesaid loans, the company is regular in
 repaying the principal amounts as stipulated and has been regular in
 payment of interest.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists an 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. During the course of our
 audit, we have not observed any continuing failure to correct weakness
 in internal control system of the company.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) The company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act and we are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained.
 
 (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.
 
 Further, since the Central Governent has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act,1956, we
 are not in a position to comment upon the regularity or otherwise of
 the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, areas follows:
 
 Name of       Nature of dues      Amount   Period to   Forum where
 the statute                         (Rs)   which the   dispute is 
                                            amount      pending
                                            relates
 
 Maharashtra  Sales Tax         16,68,316   2003-2004   Sales Tax
 Sales Tax                                              Commissioner
 Act
 
 (x) In our opinion, the accumulated losses of the company are more than
 fifty percent of its net worth. Further, the company has not incurred
 cash losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, bank or debenture holders.
 
 (xii) We are of the opinion that the Company has maintained adequate
 records where the Company has granted 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 Companies (Auditor''s Report) Order, 2003 (as amended)
 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 Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 (xvi) In our opinion, the term loans have been applied for the purpose
 for which the loans 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 funds raised on short-term basis have been used for long-term
 investment amounting to Rs.483.45 lacs.
 
 (xviii) According to the information and explanations given to us, the
 company has made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act. In our opinion, the prices at which shares have been issued is not
 prejudicial to the interest of the company.
 
 (xix) The Company did not have any outstanding debentures during the
 year.
 
 (xx) We have verified that the end use of money raised by public issues
 from the draft prospectus filed with SEBI, the offer document and as
 disclosed in the notes to the financial statements.
 
 (xxi) During the course of our examination of the books and records of
 the company, 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 instance of
 fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 For Haribhakti & Co.
 Charterad Accountants
 FRN NO.103523W
 
 Chetan Desai
 Partner
 MemberShips No.17000
 Place:mumbai
 Date: May 27,2011.