1.  We have audited the attached Balance Sheet of GHCL Limited as at
 31st March, 2011 and also the Profit and Loss Account annexed thereto
 and the Cash Flow Statement for the year ended on that date. 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, 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.
 
 4.  Further to our comments in the Annexure referred to in Paragraph 3
 above, we report that :
 
 a) no provision has been made in respect of outstanding Guarantees
 aggregating to Rs 17,840 lakhs furnished on behalf of a subsidiary
 (considered as contingent liabilities in notes to accounts) since it
 cannot be quantified as on date.
 
 b) Without qualifying our opinion, we draw your attention to:
 
 i) Note 2 of Schedule 16 in respect of the Scheme of Arrangement u/s
 391 to 394 of the Companies Act, 1956 approved by Honourable High Court
 of Gujarat vide its Order dated 30th November, 2009 and the accounting
 treatment adopted by the Company in respect of the Business Development
 Reserve.
 
 ii) Note 31 of Schedule 16 in respect of the Employee Stock Option
 Scheme of the Company, wherein the potential diminution in the value of
 the assets of the Scheme are disclosed.
 
 c) 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.
 
 d) In our opinion, proper books of accounts, as required by law have
 been kept by the Company so far as appears from our examination of such
 books;
 
 e) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 f) 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;
 
 g) On the basis of the written representations received from the
 Directors as at 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
 
 h) Subject to our comments in paragraph 4(a) above, 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 India:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 ii.  in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii.  in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Annexure referred to in paragraph 3 of the Auditors'' Report of even
 date to the Members of GHCL Limited on the accounts for the year ended
 31st March, 2011.)
 
 (i) (a) In our opinion, the Company has maintained proper records
 showing full particulars including quantitative details and situation
 of fixed assets.
 
 (b) As explained to us, some of the fixed assets have been physically
 verified by the management according to a programme of verifi cation
 which in our opinion is reasonable having regard to the size of the
 Company and the nature of its assets. No material discrepancies with
 respect to book records were noticed on such verification.
 
 (c) In our opinion and according to explanations given to us, fixed
 assets disposed off during the year were not substantial and as such
 the disposal has not affected the going concern status of the Company.
 
 (ii) (a) As explained to us, physical verifi cation of inventory has
 been conducted by the management at reasonable intervals. In our
 opinion, the frequency of verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and nature of its business.
 
 (c) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. Discrepancies noticed on verification of inventory as
 compared to book records were not material and these have been properly
 dealt with in the books of account.
 
 (iii) In our opinion and according to the information and explanations
 given to us, the Company has neither granted nor taken any loans,
 secured or unsecured, to or from companies, firms or other parties as
 covered in the register maintained under Section 301 of the Companies
 Act, 1956. Accordingly, the provisions of clause 4(iii) (b) (c) (d) (f)
 and (g) of the order are not applicable.
 
 (iv) In our opinion and according to the information and explanation
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory and fixed assets and for the sale of goods
 and services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 systems.
 
 (v) In our opinion and according to the information and explanations
 given to us, there are no contracts and arrangements, particulars of
 which need to be entered into the register maintained under Section 301
 of the Companies Act, 1956.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposit from the public
 within the meaning of Section 58A, 58AA of the Companies Act, 1956, and
 the rules framed thereunder.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of its business.
 
 (viii) We have broadly reviewed the books of accounts maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government, the maintenance of cost records have been
 prescribed under Section 209 (1) (d) of the Companies Act, 1956, and
 are of the opinion that prima facie, the prescribed accounts and
 records have been maintained.  We have not, however, made a detailed
 examination of the records with a view to determining whether they are
 accurate or complete.
 
 (ix) (a) According to the records of the Company and the information
 and explanations given to us, the Company has been regularly depositing
 with the appropriate authorities undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employee State
 Insurance, Income tax, Sales Tax, Wealth tax, Service tax, Customs
 Duty, Excise Duty, Cess and any other statutory dues applicable to it.
 There are no undisputed statutory dues as referred to above as at 31st
 March, 2011 outstanding for a period of more than six months from the
 date they become payable.
 
 (b) The disputed statutory dues aggregating to `307.50 lakhs that have
 not been deposited on account of matters pending before the appropriate
 authority are as under:
 
 Sr. Name of the statute    Nature of dues      Forum where dispute  
 No.                                            is pending 
 
 1   Income Tax Act, 1961   Export Sales        Commissioner of 
                            Commission          Income  Tax 
                                                (Appeal), Ahmedabad 
 
                            TDS Payment         -
 
 2   Central Excise Act,    CENVAT credit       High Court Chennai 
     1944
 
                            Customs, Excise 
                            and Service Tax 
                            Appellate Tribunal
 
 3   Urban Land Tax Act     Urban Land Tax      Madurai Corporation 
 
                                                High Court Chennai  
 
                                                High Court Chennai 
 
 4   Bombay Tenancy &       Non-Agriculture     High Court Ahmedabad 
     Agricultural Land      conversion Premium
     Tax Act, 1948          for  Land
 
 5   The Employee''s State   Contribution        ESI Court, Madurai 
     Insurance Act, 1948    Demand              Supreme Court 
 
 
 Name of the statute     Period to which           Amount
                         the amount          (Rs.in Lakhs)
 
 Income Tax Act, 1961    F. Y.2005-2006             58.67
 
 Central Excise Act,     F. Y. 2007-2008            40.92
 1944
                         2001-02                     3.20
 
                         2002-03                     0.73
 
 
 
 Urban Land Tax Act      1981-2009                  19.80  
 
                         1981-2009                  12.67 
                        
                         2010-2011                  43.34
 
 
 Bombay Tenancy &        2005-2006                 121.17
 Agricultural Land       
 Tax Act, 1948 for 
 Land
 
 The Employee''s State    Various Years               5.69
 Insurance Act, 1948
                         1985-1986                   1.31
 
 
 (x) The Company neither has any accumulated losses at the end of the
 financial year nor has incurred any cash losses during the financial
 year covered by our audit and in the immediately preceding financial
 year.
 
 (xi) Based on our audit procedures and according to the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to banks or financial
 institutions.
 
 (xii) Based on our audit procedures and according to the information
 and explanations given by the management, 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) The Company is not a chit fund/nidhi/mutual benefit fund/society
 to which the provisions of special statue relating to chit fund are
 applicable.
 
 (xiv) According to the information and explanations given by
 management, the Company is not dealing or trading in shares,
 securities, debentures and other investments.
 
 (xv) Based on our examination of the records, we are of the opinion
 that the terms and conditions on which the Company has given guarantee
 for loans taken by others from banks or financial institutions are
 prima facie not prejudicial to the interest of the Company.
 
 (xvi) In our opinion, the term loans have been applied for the purposes
 for which they were obtained.
 
 (xvii) Based on our examination of the Balance Sheet and cash flows of
 the Company as at 31st March, 2011 and according to the information and
 explanations given to us, we report that funds raised on a short-term
 basis have not been used for long-term investment.
 
 (xviii) During the year, the Company has not made preferential
 allotment of shares to parties and companies covered in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 (xix) The Company did not have any outstanding debentures at the year
 end.
 
 (xx) During the year, the Company has not raised money by way of public
 issue.
 
 (xxi) Based on the audit procedures performed and according to the
 information and explanations given by the management, we report that no
 fraud on or by the Company has been noticed or reported during the year
 ended 31st March, 2011.
 
 For and on behalf of                            For and on behalf of
 
 JAYANTILAL THAKKAR & CO              RAHUL GAUTAM DIVAN & ASSOCIATES 
 Chartered Accountants                          Chartered Accountants 
 (Firm Reg. No. 104133W)                       (Firm Reg. No. 120294W)
 
 
 ( C. V. THAKKER )                                       (RAHUL DIVAN)
 Partner                                                      Partner
 Membership No: 006205                          Membership No: 100733
 
 
 Place : New Delhi
 Date : 18th July, 2011