1.  We have audited the attached Balance Sheet of Inox Leisure Limited,
 as at 31st March, 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 (Auditors Report) Order, 2003 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 paragraph 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to 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 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 written representations received from the
 directors, as on 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.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read with the notes
 thereon, 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:
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 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 Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS'' REPORT TO THE
 MEMBERS OF INOX LEISURE LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST
 MARCH, 2011.
 
 In terms of the Companies (Auditors'' Report) Order, 2003, on the basis
 of information and explanations given to us and the books and records
 examined by us in the normal course of audit and such checks as we
 considered appropriate, to the best of our knowledge and belief, we
 state as under:
 
 1.  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 at
 reasonable intervals and no material discrepancies have been noticed on
 such verification.
 
 Fixed assets disposed of during the year were not substantial and
 therefore do not affect the going concern assumption.
 
 2.  Inventories were physically verified by the management at
 reasonable intervals during the year.
 
 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.
 
 In our opinion, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification of inventories as compared to book records.
 
 3.  The Company has granted loan to one company covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year and the year-end balance is Rs. 1200
 lacs. In our opinion, the rate of interest and other terms and
 conditions on which the loan is granted are not prima-facie prejudicial
 to the interest of the Company. The company is regular in payment of
 interest and no amount was due towards repayment of the principal.
 
 The Company has taken loans from two companies covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year and the year-end balance is Rs. 15100
 lacs. In our opinion, the rate of interest and other terms and
 conditions on which these loans were taken are not prima-facie
 prejudicial to the interest of the Company. The Company is regular in
 payment of interest and no amount was due towards repayment of the
 principal.
 
 4.  In our opinion, there are generally adequate internal control
 procedures commensurate with the size of the Company and nature of its
 business for purchase of inventory and fixed assets and for sales and
 services. During the course of our audit, no major weakness has been
 noticed in the internal control systems in respect of these areas.
 
 5.  In our opinion, the transactions that need to be entered into the
 register maintained under section 301 of the Companies Act, 1956 have
 been so entered. In our opinion, for purchase of services made in
 pursuance of contracts or arrangements entered in the register
 maintained under section 301 of the Companies Act, 1956 and exceeding
 value of rupees five lakhs in respect of any party during the year, no
 comparison of prices could be made available as these legal services
 are of special nature. There were no transaction of purchase of goods
 and materials, and sale of goods, materials and services with parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Section 58A, 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Rules framed thereunder and hence the
 provisions of clause 4(vi) of the Companies (Auditors'' Report) Order,
 2003 are not applicable to the Company.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the Rules made by the Central Government for
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956 for activities of the Company to which the said Rules are
 made applicable, and are of the opinion that, prima facie, the
 prescribed accounts and records have been made and maintained.
 
 9. The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax,
 Service-tax, Customs Duty, Cess, Entertainment Tax and other material
 statutory dues applicable to it. No payments were due in respect of
 Investors Education and Protection Fund and Excise Duty.
 
 No undisputed amounts payable in respect of Income-tax, Wealth-tax,
 Sales-tax, Service tax, Customs Duty, Excise Duty and Cess were in
 arrears, as at the end of the year, for a period of more than six
 months from the date they became payable.
 
 Particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax,
 Customs Duty, Excise Duty or Cess, which have not been deposited on
 account of disputes are as under:
 
 Name of the 
 statute         Nature of dues and the
                 period to                amount  forum where dispute is
                                                  pending
                 which the amount 
                 relates                  (rs. in 
                                          lacs)
 
 Service-tax     Levy of service tax 
                 on certain income         90.13    Commissioner of
                                                    Service-tax, Mumbai
 
 10.  The Company does not have accumulated losses and the Company has
 not incurred cash losses during the current year and in the immediately
 preceding financial year.
 
 11.  The Company has not defaulted in repayment of dues to banks.
 
 12.  The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures or other securities.
 
 13.  The Company is not a chit fund or a nidhi/mutual benefit
 fund/society. Therefore, the provisions of clause 4(xiii) of the
 Companies (Auditors'' Report) Order, 2003 are not applicable to the
 Company.
 
 14.  The Company has invested in shares, mutual funds and other
 securities in the course of its investment activity. In our opinion,
 proper records have been maintained of the transactions and timely
 entries have been made therein. These investments are held by the
 Company in its own name, except as mentioned in the Schedule 7:
 Investments in the Balance Sheet.
 
 15.  The Company has not given any guarantee for the loans taken by
 others from banks or financial institution.
 
 16.  In our opinion, the term loans availed during the year by the
 Company were applied for the purpose for which they were raised other
 than amounts pending utilization of the funds intended to be used in
 the projects under implementation, temporarily kept in fixed deposit
 with banks.
 
 17.  The Company has not raised funds on short-term basis during the
 year.
 
 18.  During the year the Company has not made any preferential
 allotment of shares to parties covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 19.  There are no debentures issued and outstanding during the year and
 hence the provisions of clause 4(xix) of the Companies (Auditors''
 Report) Order, 2003 are not applicable to the Company.
 
 20.  The Company has not raised any money by way of public issues
 during the year.
 
 21.  No fraud on or by the Company was noticed or reported during the
 course of our audit.
 
                                           for patankar & associates 
                                               chartered accountants 
                                               firm reg. No. 107628W
 
                                                     (M.y. Kulkarni) 
 place : pune                                                partner
 dated : 26th May 2011                                Mem. No. 35524