We have audited the attached balance sheet of TAJ GVK Hotels & Resorts
 Limited, Hyderabad (A.P.) as at 31st March, 2011, the Profit and Loss
 account for the year ended on that date annexed thereto, and its Cash
 Flow statement for the year ended on that date. These financial
 statements are the responsibility of the Companys management. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 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.
 
 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 paragraphs 4 and 5 of the said
 Order.
 
 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, the Profit and Loss Account 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 Profit and Loss Account 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 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 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 of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash-flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 
 
 
 THE ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE.
 
 1.1.  The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 1.2.  According to the information and explanations furnished to us,
 the Company has physically verified all its fixed assets during the
 year. No material discrepancies were noticed during the year on such
 verification.
 
 1.3.  According to the information and explanations furnished to us,
 the Company has not disposed of a substantial part of its fixed assets
 during the year.
 
 2.1.  According to the information and explanations furnished to us,
 the Company has physically verified its inventories during the year. In
 our opinion, the frequency of verification is reasonable.
 
 2.2.  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.
 
 2.3.  According to the information furnished to us, the Company is
 maintaining proper records of inventory and 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 account.
 
 3.1. According to the information and explanations furnished to us, the
 Company has not granted secured or unsecured loans to Companies, firms,
 or other parties whose particulars are recorded in the register
 maintained under Section 301 of the Companies Act 1956.
 
 3.2 According to the information and explanations furnished to us, the
 Company has taken an unsecured loan of Rs. 5 crores from a company, whose
 particulars are recorded in the register maintained under Section 301
 of the Companies Act 1956. The terms and conditions of the loan are not
 prima facie prejudicial to the interest of the Company and the Company
 is regular in payment of interest. The principle is due in 2013.
 
 4. In our opinion and according to the information and explanations
 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, fixed assets and for the sale of goods and
 services. Further during the course of our audit, we have not come
 across any instances of major weaknesses in internal control that in
 our opinion require correction, but have so continued without
 correction.
 
 5.1 Based on the information and explanations given to us, we are of
 the opinion that the transactions that need to be entered in the
 register maintained under section 301 of the Companies Act, 1956 have
 been so entered.
 
 5.2 In our opinion and according to the information and explanations
 given to us, the transactions which have been entered into, pursuant to
 contracts that have been entered in the register maintained under
 Section 301 of the Companies Act, 1956 have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 6.  The Company has not accepted any deposits from public and
 consequently, the directives issued by the Reserve Bank of India and
 the provisions of sections 58A and 58AA or any other relevant
 provisions of the Act and the rules framed there under are not
 applicable.  According to the information furnished to us, no Order has
 been passed on the Company by the Company Law Board or National Company
 Law Tribunal or Reserve Bank of India or any Court or any other
 Tribunal for non compliance with the provisions of Sections 58A and 58
 AA of the Companies Act, 1956.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  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.
 
 9.1 According to the information furnished to us, the Company is
 regular in depositing with appropriate authorities, the undisputed
 statutory dues including Provident Fund, Investor Education 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.
 
 9.2 According to the information and explanations furnished to us, no
 undisputed statutory dues mentioned in the preceding paragraph are in
 arrears, as at the date of the Balance Sheet under report, for a period
 of more than six months from the date they became payable.
 
 9.3 According to the information furnished to us, the following amounts
 of Income Tax and Sales Tax have been disputed by the Company, as at
 the date of the Balance Sheet under report.
 
 Name of the           Nature of          Rs.           Amount paid
 statute                the dues      In lacs        under protest
                                                       (Rs.in lacs)
 
                                        86.41              86.41
 
 Income Tax Act, 1961    Income Tax     18.77
 
                                         6.96
 
                                       135.86              40.92
 
 A.P.General Sales       Sales Tax
 Tax Act                                33.60               4.20
 
 Finance Act,1994        Service tax    23.64                 —
 
 
 
 Name of the             Financial year to           Forum where the
                             which the              dispute is pending
                           amount relates
 statute
 
 Income Tax Act, 1961        2002-03               Appellate Tribunal
 
                             2006-07                    - Do -
 
                             2007-08            CIT (Appeals), Hyderabad 
 
 A.P.General Sales           2005-06 to         High Court of Andhra
 
                             2008-09             Pradesh
 
                             2005-06 to         Appellate Tribunal
                             2009-10
 Tax Act
 
 Finance Act,1994           2005-06 to           Commissioner Appeals
 
                            2008-09               (Chandigarh)
 
 
 10.  According to the information and explanations furnished to us, the
 Company has been incorporated for a period exceeding five years. It had
 no accumulated losses at the end of the financial year and it has not
 incurred cash losses during the financial year covered by our audit and
 in the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explanations
 furnished to us by the Company, there were no defaults in repayment of
 its dues to financial institutions and banks at the date of the Balance
 Sheet.  The Company has not issued any debentures.
 
 12.  According to the information and explanation given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion and according to the information and explanations
 furnished to us, the Company is not a chit fund or a nidhi/ mutual
 benefit fund / society and hence the requirements of clause 4(xiii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 Company during the year under report.
 
 14.  According to the information furnished to us, the Company is not
 dealing in or trading in shares, securities, debentures and other
 investments.  Accordingly, the requirements of clause 4(xiv) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 15.  According to the information and explanation given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions.
 
 16.  According to the information and explanation given to us, on an
 overall basis, the term loans have been applied for the purpose for
 which they were raised.
 
 17.  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, prima facie, not been used
 during the year for long-term investments.
 
 18.  According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year to parties and companies covered in the register maintained under
 section 301 of the Act, or to any others.
 
 19.  According to the information and explanations given to us, the
 Company has not issued any debentures during the year under report.
 
 20.  The Company has not raised any money through public issues during
 the year. Accordingly, the provisions of clause 4(xx) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the Company during
 the year under report.
 
 21.  According to the information and explanations given to us, and
 based on the audit procedures generally adopted by us, we report that,
 during the year, no fraud on or by the Company has been noticed or
 reported that is either significant or could have caused a material
 misstatement in the financial statements.
 
                                                   For BRAHMAYYA & Co.,
 
                                             Registration No: 000513S
 
                                                Chartered Accountants
 
                                                    Koteswara Rao SSR
 
 Place :Hyderabad                                             Partner
 
 Date  : 28th April, 2011                        Membership No: 18952