I have audited the attached Balance Sheet of IDEAL HOTELS & INDUSTRIES
 LIMITED, NEW DELHI as at 31st March, 2001 and the Profit & Loss Account
 for the year ended on that date annexed thereto and report that:
 
 1. I have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of my
 audit.
 
 2. In my opinion, proper books of account as required by law have
 been kept by the Company so far me appears from my examination of such
 books.
 
 3. The Balance Sheet and Profit & Loss Account referred to in this
 report are in agreement with the books of account.
 
 4. In my opinion, the Balance Sheet and Profit & Loss Account comply
 with the accounting standards referred to in Section 211 (30 of the
 Companies Act, 1956, to the extent applicable.
 
 5. On the basis of information obtained, none of the Directors are
 prima facie disqualified under Section 274 (1) (g) of the Companies
 Act, 1956 from being appointed as a Director of the Company as on
 31-03-2001.
 
 Subject to Note No. 2 of the notes annexed to and forming part of the
 accounts regarding fee payable to stock exchanges, in my opinion and to
 the best of my information and according to the explanations given to
 me, the said accounts together with Accounting Policies and Notes
 forming part thereof give the information required by the Companies
 Act, 1956 in the manner so required and give a true and fair view
 
 i. In so far as it relates to the Balance Sheet, of the State of
 affairs of the Company as at 31st March, 2001
 
 AND
 
 ii. Insofar as it relates to the Profit and Loss Account of the Loss of
 the Company for the year ended on that date.
 
 6. Auditors Report) Order, 1988, issued by the Company Law Board in
 terms of Section 227 (4A) of the Companies Act, 1956 and on the basis
 of such checks, as we considered appropriate, we report hereunder on
 the matter specified in paragraphs 4 and 5 of the said order ;
 
 i. The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets. The fixed assets have been physically verified by the
 management. There is annual verification of fixed assets, which in our
 opinion, is reasonable having regard to the size of the Company and the
 nature of its assets, i No material discrepancies have been noticed on
 such verification.
 
 ii. None of the fixed assets have been revalued during the year.
 
 iii. In our opinion the terms and conditions on which loans have been
 taken from Companies, Firms or other parties listed in the registers
 maintained under Section 301 and from the Companies under the same
 management are not, prima facie, prejudicial to the interest of the
 Company.
 
 vi. The Company has not granted any loans, secured or unsecured to
 Companies, firms or other parties listed in the registers maintained
 under Section 301 or to Companies under the same management within the
 meaning of Section 370 (1B) of the Companies Act, 1956.
 
 v. The only parties to whom loans and advances in the nature of loans
 have been given by the Company are the employees or the; Company and
 the said employees have been repaying the loans which are non-interest
 bearing as stipulated.
 
 vi. In our opinion and according to the information and explanations
 given to us, the company has an adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business.
 
 vii. In our opinion and according to the information and explanations
 given to us, the transactions of purchase of goods and materials and
 sale of goods, materials and services, made in pursuance of contracts
 or arrangements entered in the registers maintained under Section 301
 of of the Companies Act, 1956 and aggregating during the year to Rs.
 50,000/- or more in respect: of each party, have been made at prices
 which are reasonable having regard to prevailing market prices for such
 goods, materials or services or the prices at which transactions for
 similar goods, materials or services have been made with other parties.
 
 viii. The Company has not accepted any deposits from the public. Hence
 the provisions of Section 58 A of the Companies Act, 1956 and the
 Companies (acceptance of Deposits) Rules 1975, do not apply to this
 Company
 
 ix. In our opinion the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 x. The Central Government has not prescribed under Section 209(1)(d)
 of the Companies Act, 1956 the maintenance of cost records for the
 products of the Company.
 
 xi. According to the records of the Company, the Company has been
 generally regular in depositing Provident Fund and employees State
 Insurance dues with the appropriate authorities.
 
 xii. According to the information given to us Provident Fund and
 Employees State Insurance Scheme have not been applicable to the
 Company.
 
 xiii. According to the records of the Company, there were no undisputed
 amounts payable in respect of Income-Tax, Wealth Tax, Sales-Tax,
 Luxury-Tax, Customs duty and Excise Duty as at 31.03.2001 which are
 outstanding for a period of more than six months from the date they
 become payable.
 
 xiv. According to the information and explanation given to us, no
 personal expenses of the employees or directors have been charged to
 revenue account other than those payable under contractual obligations
 or in accordance with generally accepted business practice.
 
 vii. The Company is not a Sick Industrial Company within the meaning of
 clause (O) of sub section (1) of Section 3 of the Sick Industrial
 Companies Special provisions) Act, 1985.
 
 Other clauses of above order is not applicable to the Company.
 
                                            For Kiran Ravi & Associates
                                                  Chartered Accountants
 
 Place: Bikaner                                        Ravi Kiran Gupta
 Dated: 22.10.2001                                           Proprietor