Auditor Report of U P Hotels Ltd.

Mar 31, 2025

We have audited the accompanying financial statements of U. P. Hotels Limited (“the Company”), which comprise the Balance Sheet
as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and
Statement of Cash Flows for the year then ended, and summary of significant accounting policies and other explanatory information
(hereinafter referred to as “the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters
described in the Basis of Qualified Opinion section of our report, the aforesaid financial statements give the information required by
the Companies Act, 2013 (“the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting
Standards prescnbed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules. 2015, as amended,
find AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, the
profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date

Basis of Qualified Opinion

Attention is drawn to the following notes to the financial statements: -

1. Note No. 39.1, 39.2 and 41(a) regarding non-compliance of Minimum Public Shareholding as explained in the said notes.
As such, the Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements)
Regulations, 2015 with regard to Minimum Public Shareholding.

2. Note No. 41(b) i.e. the Company is yet to achieve 100% dematerialization of the promoters'' shareholding. As such, the
Company has not complied with Regulation 31(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations,
2015.

3. Note No. 41(c) i.e. the Related Party Transactions ("RPT”) entered into by the company during the previous years and
which are continuing in the current financial year could not be approved by the Audit Committee and Board of Directors
being part of a legal matter pending before the Hon’ble National Company Law Tribunal (NCLT) for adjudication as
explained in the note. These RPTs are not entered in the Register maintained under Section 189 of the Act. As such,
the Company is yet to comply with sections 188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligations and
Disclosures Requirements) Regulations, 2015.

4. The ultimate outcome of the matters specified in paras 1-3 above cannot presently be determined and its consequential
impact on these financial statements cannot be ascertained.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act Our responsibilities
under those Standards are further described in the “Auditor’s Responsibilities for the Audit of financial statements" section of our report.
We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India
together with the independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and
the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics,
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of financial statements of
the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the
key audit matters to be communicated in our report.

s. No.	Key Audit Matter	Auditor’s Response
1	Refer foot note of Note No. 26 regarding non-compliance of minimum	We have analyzed the efforts by the company to
	public shareholding(MPS) and Note No. 39(1) & 39(2) to the financial	make default good, SEBI orders dated 4.6 2013 and
	statements -	2 12.2014, delisting process of year 2022, Master
	The company is non-compliant of Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding (MPS) since long despite its efforts to make good the default from time to time.	Circular SEBI/HO/CFD/PoD2/ CIR/P/2023/120 dated July 11,2023 and updated Master Circular issued by SEBI and various penalty notices(mails) received from BSE in this regard.
	BSE Limited, in terms of SEBI Master Circular SEBI/ HO/CFD / PoD2/ CIR/P/2023/120 on July 11, 2023 and SEBI/HO/CFD/PoD2/	We verified the application of the Company applying to SEBI for voluntary delisting process.
	Cl R/P/0155 dated November 11, 2024, initiated penal action against	Though SEBI has given approval for voluntary delisting.
	the company and imposed fine of Rs. 31.15 lakhs (including GST) in	the MPS compliance depends on the success of the
	financial year 2023-24 and Rs. 43.07 lakhs (including GST) during current financial year	delisting process.

s. No.	Key Audit Matter	Auditor’s Response
	During the year, SEBI granted certain relaxations including relaxation from the requirement of compliance of MPS Norms for the specific purpose of seeking voluntary delisting of equity shares of the company. Uncertainty about the outcome of the voluntary delisting process (success/failure) thereby uncertainty to comply the MPS requirement and continuous imposition of high fine by BSE due to non-compliance on quarterly rests has been a matter of most significance during the current year audit and was determined to be key audit matter in our audit of financial statements.

Information Other than the Financial Statements and Auditors’ Report thereon

The Company’s Board of Directors is responsible for preparation of the other information. The other information comprises the information
included in Annual Report, but does not include the financial statements and our auditor''s report thereon.

Our opinion on financial statement does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our
audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.

Management’s responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these
financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in
equity and cash flows of the company in accordance with applicable Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the company’s ability to continue as going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of
Directors either intends to liquidate the company or to cease the operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the company''s financial reporting process.

Auditor’s Responsibilities for the Audit of financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it
exists Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the
audit. We also;

• Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform
audit procedure responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company
has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statement or, if such disclosures are inadequate, to modify our opinion Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transaction and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the
economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative
materiality and qualitative factor in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate
the effect of anv identified misstatements in the financial statements

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor s
report unless law or regulation precludes public disclosures about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order"), issued by the Central Government in terms of section
143(11) of the Act, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.

2. As required by Section 143(3) of the Act, based on our audit we report that

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our
examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in
Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under section 133
of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on 31st March, 2025 taken on record by the Board
of Directors, none of the directors are disqualified as on 31st March 2025 from being appointed as a director in terms of
section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating
effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section
197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit
andAuditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements

b) The Company did not have any long term contracts including derivative contracts.

c) There has been no delay and the amounts required to be transferred to Investor education and protection fund during
the year were transferred on time by the company.

d) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations/disclosures under sub-clause (i)
and (ii) of Rule 11(e) contain any material mis-statement. (Refer Note No 42 to the financial statements)

e) The Company has not declared or paid any dividend during the year.

f) Based on our examination which included test checks, the company has used an accounting software for maintaining
its books of accounts which has a feature of recording audit trail (edit log) facility and the same has been operated
throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did
not come across any instance of audit trail feature being tempered with.

Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention.

ForSatinder Goyal & Co.
Chartered Accountants
Firm’s Regn. No: 027334N

Shubhanshu Jain

(Partner)

Date : 28^th May, 2025 Membership No. : 541369

Place : New Delhi UDIN No: 25541369BMIALS5117

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Mar 31, 2024

To the Members of U. P. Hotels Limited Report on the Audit of Financial Statements Opinion

We have audited the accompanying financial statements of U. P. Hotels Limited (“the Company”), which comprise the Balance Sheet as at March 31,2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and summary of significant accounting policies and other explanatory information (hereinafter referred to as “the financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis of Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis of Qualified Opinion

Attention is drawn to the following notes to the financial statements:-

1. Note No. 39.1, 39.2 and 41(a) regarding non-compliance of Minimum Public Shareholding as explained in the said notes. As such, the Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding.

2. Note No. 41(b) i.e. the Company is yet to achieve 100% dematerialization of the promoters’ shareholding. As such, the Company has not complied with Regulation 31(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

3. Note No. 41(c) i.e. the Related Party Transactions (“RPT”) entered into by the company during the previous years and which are continuing in the current financial year could not be approved by the Audit Committee and Board of Directors being part of a legal matter pending before the Hon’ble National Company Law Tribunal (NCLT) for adjudication as explained in the note. These RPTs are not entered in the Register maintained under Section 189 of the Act. As such, the Company is yet to comply with sections 188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

4. The ultimate outcome of the matters specified in paras 1-3 above cannot presently be determined and its consequential impact on these financial statements cannot be ascertained.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the “Auditor''s Responsibilities for the Audit of financial statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No.	Key Audit Matter	Auditor’s Response
1	Refer foot note of Note No. 26 regarding non-compliance of minimum public shareholding(MPS) and Note No. 39(1) & 39(2) to the financial statements:- Refer foot note of Note No. 26 regarding non-compliance of minimum public shareholding(MPS) and Note No. 39(1) & 39(2) to the financial statements:- The company is non-compliant of Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding (MPS) since long despite its efforts to make good the default from time to time i.e. failure to issue bonus shares to public shareholders in the year 2013 and unsuccessful delisting process in the year 2022. SEBI came out with Master Circular SEBI/HO/CFD/PoD2/CIR/P/2023/120 on July 11,2023. Section VII-B of this circular deals with “Non-compliance with the Minimum Public Shareholding requirements”. As per the provisions of the circular, a fine of Rs. 5000/- per day and an increased fine of Rs. 10000/- per day in case the default continues for a period of more than one year will be levied till the date of compliance.	We have analyzed the efforts by the company to make default good, SEBI orders dated 4.6.2013 and 2.12.2014, delisting process of year 2022, Master Circular SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11,2023 issued by SEBI and various penalty notices(mails) received from BSE in this regard. We verified the application of the Company applying to SEBI for voluntary delisting process. The matter depends on decision of SEBI.

S. No.	Key Audit Matter	Auditor’s Response
	Accordingly, Bombay Stock Exchange initiated penal action against the company and imposed fine of Rs. 9,55,800/- (including GST), Rs. 10,85,600/-(including GST) and Rs. 10,73,800/- (including GST) for quarter 2, 3 and 4 respectively. Uncertainty about the time to comply the MPS requirement and continuous imposition of high fine by BSE due to non-compliance on quarterly rests has been a matter of most significance during the current year audit and was determined to be key audit matter in our audit of financial statements.

Information Other than the Financial Statements and Auditors’ Report thereon

The Company''s Board of Directors is responsible for preparation of the other information. The other information comprises the information included in Annual Report, but does not include the financial statements and our auditor''s report thereon.

Our opinion on financial statement does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the company in accordance with applicable Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the company''s ability to continue as going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the company or to cease the operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the company''s financial reporting process.

Auditor’s Responsibilities for the Audit of financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedure responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transaction and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factor in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosures about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government in terms of section 143(11) of the Act, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on 31st March, 2024 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2024 from being appointed as a director in terms of section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

b) The Company did not have any long term contracts including derivative contracts.

c) There has been no delay and the amounts required to be transferred to Investor education and protection fund during the year were transferred on time by the company.

d) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations/disclosures under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement. (Refer Note No. 42 to the financial statements)

e) The Company has not declared or paid any dividend during the year.

f) Based on our examination which included test checks, the company has used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tempered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, thus reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservations of audit trail as per the statutory requirement for record retention is not applicable for the financial year ended March 31,2024.

For Satinder Goyal & Co. Chartered Accountants Firm''s Regn. No: 027334N

Shubhanshu Jain

(Partner)

Date : 28^th May, 2024 Membership No. : 541369

Place : New Delhi UDIN No: 24541369BKHIRY8271

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Mar 31, 2023

V\fe have audited the accompanying financial statements of U. P. Hotels Limited (“the Company”), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and summary of significant accounting policies and other explanatory information (hereinafter referred to as “the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis of Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis of Qualified Opinion

Attention is drawn to the following notes to the financial statements:-

1. Note No. 39.1, 39.2 and 41(a) regarding non-compliance of Minimum Public Shareholding as explained in the said notes. As such, the Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding.

2. Note No. 41(b) i.e. the Company is yet to achieve 100% dematerialization of the promoter’s shareholding. As such, the Company has not complied with Regulation 31 (2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

3. Note No. 41(c) i.e. the Related Party Transactions (“RPT”) entered into by the company during the previous years and which are continuing in the current financial year could not be approved by the Audit Committee and Board of Directors being part of a legal matter pending before the Hon’ble National Company Law Tribunal (NCLT) for adjudication as explained in the note. These RPTs are not entered in the Register maintained under Section 189 of the Act. As such, the Company is yet to comply with sections 188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

4. Note No. 43 regarding sundry debtors of Hotel Clarks Shiraz, Agra whose balances are under reconciliation as on 31.03.2023.

5. The ultimate outcome of the matters specified in paras 1-4 above cannot presently be determined and its consequential impact on these financial statements cannot be ascertained.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor’s Responsibilities for the Audit of financial statements” section of our report. V\fe are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

s. No.	KeyAudit Matter	Auditor’s Response
1	The company has two properties in Agra i.e. property no. 54 and property no. 53A at Taj Road, Agra. Both the properties are leasehold properties for a total lease period of ninety years containing three terms of thirty years each. The final lease term of property no. 54, where Hotel of the company Clarks Shiraz is situated is expiring in the year 2051. However final lease term of property no. 53A (land area 1.79 acres) has expired on 15.05.2021. The company owns this property since 1992. On Property no. 53A, office of Comdt. NCC is situated for which the company was getting rent of Rs. 131/- per month which was stopped after the lease period of 90 years got expired. Since the final lease term is over in May, 2021, the company has sent a request letter dated April 24, 2021 for renewal of the lease to competent authority i.e. The Defence Estate Officer, Agra. Reply from competent authority is awaited.	We have studied and analyzed original lease deed of property no. 53A, ownership papers in favour of company and request letter for renewal of lease for further period. As the original lease term of ninety years is already over and office of Comdt. NCC stopped paying rent, the outcome of request letter of the company for further renewal of lease will be known only on the receipt of communication from competent authority.

Information Other than the Financial Statements and Auditor’s Report thereon

The Company’s Board of Directors is responsible for preparation of the other information. The other information comprises the information included in Annual Report, but does not include the financial statements and our auditor’s report thereon.

Our opinion on financial statement does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity andcash flows of the company in accordance with applicable Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the company’s ability to continue as going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the company or to cease the operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the company’s financial reporting process.

Auditor’s Responsibilities for the Audit of financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedure responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transaction and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factor in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

V\fe communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

V\fe also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor''s

report unless law or regulation precludes public disclosures about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government in terms of section 143(11) of the Act, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the matters described in the Basis ofQualified Opinion paragraph, in our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on 31 st March, 2023 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2023 from being appointed as a director in terms of section 164(2) of the Act.

f) Wth respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) Wth respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

b) The Company did not have any long term contracts including derivative contracts.

c) During the year, the company was not liable to transfer any amount to the Investor Education and Protection Fund.

d) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations/disclosures under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement. (Refer Note No. 42 to the financial statements)

e) The Company has not declared or paid any dividend during the year.

For Satinder Goyal & Co. Chartered Accountants Firm’s Regn. No: 027334N

Shubhanshu Jain

(Partner)

Date : 30^th May, 2023 Membership No. : 541369

Place : New Delhi UDIN No: 23541369BGZHGJ6687

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of U.P. Hotels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the ''Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 March 31, 2013 and;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of matter

a) We draw attention to Note 50 to the Financial Statements regarding remuneration paid / provided in respect of whole-time directors, an excess of the limits prescribed under section 309 (3) & section 198 read with Schedule XIII of the Act, which is subject to the approval of Central Government. Our opinion is not qualified in respect of this matter.

b) We draw attention to the Note 52 to the Financial Statements which describes that the Company has applied to the Hon''ble Civil Court, Lucknow (Sr. Division) in respect of interim order passed in the matter of civil suit filed by some promoters against most of the promoters (including the Company) not to undertake any such measures which may affect the shareholding pattern inter- se amongst promoters, to give permission to enable the Company to comply with Clause 40A of the listing agreement and as such the Company is yet to comply with the letter received from SEBI as regards Clause 40A. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. 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;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act,1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

1. a) The Company has generally maintained proper records showing full particulars regarding valuation of different type of assets including quantitative details and situation of fixed assets. The Company is still in the process of updating its records on the new fixed assets management software.

b) The fixed assets at Clarks Avadh, Lucknow & Clarks Shiraz, Agra have been physically verified by a firm of Chartered Accountants during the year. The physical verification of assets at Clarks Amer, Jaipur & Clarks Khajuraho have not been carried out during the year. In our opinion, the frequency of verification of fixed assets needs to be increased in order to be reasonable having regard to the size of the company and nature of its assets. The discrepancies noticed on such verification carried out which were not material have been properly dealt within the books of account.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. a) As explained to us, inventories are physically verified by the Management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records of the Company, the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

b) In view of our comments in paragraph 3 (a) above, the provisions of Clauses iii (b), iii (c) and iii (d) of paragraph 4 of the aforesaid Order are not applicable to the Company.

c) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

d) In view of our comment in paragraph 3 (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us and having regard to the explanation that for some items purchased for which comparable alternative quotations are not available because of the nature/ quality of such items and delivery schedules and also sale of services for which suitable alternative sources are not available to obtain comparable quotations, there are generally adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventories, fixed assets and sale of goods and services except for internal control over purchase of provisions and reimbursement of expenses needs to be improved. Further, during the course of our audit subject to comment made hereinabove, we have neither come across nor have we been informed of any continuing failure to correct major weakness in internal control system.

5. a) On the basis of the audit procedures performed by us, and according to the information, explanation and representations given to us, we are of opinion that, the particulars of contracts or arrangements in which directors were interested as contemplated under Section 297 and sub section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered.

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs.5 lacs with any party during the year. However, in respect of other transactions owing to the unique and specialized nature of items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prevailing market price at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable. Further, during the course of our audit, we have neither come across nor have we been informed of any order passed under the aforesaid sections by Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. a) According to records of the Company, and subject to comments in para 9 (b) below the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been instances of delay and non deposition/ non deduction.

Further, since the Central Government 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 information and explanations given to us, except for the cases stated below, there are no other undisputed amount payable in respect of provident fund, investor education & protection fund, income tax, employees state insurance, wealth tax, sales tax, custom duty, service tax, excise duty, cess and other statutory dues which were outstanding at the year end for period of more than six months from the date they become payable.

Amount (R.)

House Tax/ Municipal Tax 2,872,250 & Water tax

Purchase Tax / VAT/Entry 288,484 tax etc.

Service Tax 224,866

Employees State 1,190,783 Insurance Dues

Luxury Tax 290,491

c) According to the information and explanations given to us, there are no dues outstanding of custom duty, excise duty, income tax, wealth tax and cess on account of any dispute which have not been deposited except for:

Name of statute Nature of dues Years Forum where dis- Amount (Rs.) pute is pending

Value Added Value Added Tax 2007-08 VAT Tribunal, Agra 2,972,203 Tax - UP

Income tax Income Tax Assessment Year CIT (Appeals) Vara- 5,236,372 Act,1961 2009-10 & 2010-11 nasi

Reference is also invited to Note 28 A (i) (b) as regards the Income Tax Department having appealed

to the Hon''ble High court, Allahabad against the Order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD (Assessment year 1989-90 to 1991-92). The total amount disputed (excluding interest & penalties) aggregated to Rs.5,859,000.

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our report and in the immediately preceding financial year.

11. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution / bank. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Order is not applicable to the Company.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, clause 4 (xiii) of the Order is not applicable to the Company.

14. The Company has maintained proper record of transaction and contracts in respect of dealing or trading in securities and other investments viz. mutual funds. All other investments viz. mutual funds have been held by the Company in its own name.

15. 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. Accordingly, clause 4 (xv) of the Order is not applicable to the Company.

16. On the basis of the records examined by us, the Company has not availed any tem loan during the year. Accordingly, clause 4 (xvi) of the Order is not applicable to the Company.

17. According to the information and explanations given to us and on an overall examination of the financial statements and after placing reliance on the reasonable assumptions made by Company for classification of long term and short term usages of funds, we are of the opinion that prima facie no funds raised on short term basis have been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is not applicable to the Company.

19. The Company has not issued any debentures during the year. Accordingly, clause 4 (xix) of the Order is not applicable to the Company.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Order is not applicable to the Company.

21. During the course of our audit of the books of accounts of the Company, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.

For RAY & RAY Chartered Accountants

Firm''s Registration Number 301072 E

Sd/-

(Anil Kumar Sharma)

Partner

Membership Number 80085

Place: New Delhi

Date: 27th May, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of U.P. Hotels Limited ('the Company") as at 31st March, 2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the 'financial statements'). 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 ('the Order') (as amended), issued by the Central Government in terms of sub - section (4A) of Section 227 of the Companies Act, 1956 ("the Act")and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 financial statements dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the financial statements 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, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 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 financial statements read in conjunction with Notes to the Account and subject to Note 46 as regards Hotel Earnings in foreign exchange not verified by us, 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, 2012;

(b) in the case of the Statement of Profit and Loss, 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT OF U.P. HOTELS LIMITED OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2012.

1. a) The Company has generally maintained proper records showing full particulars regarding valuation of different type of assets including quantitative details and situation of fixed assets. The Company is still in the process of updating its records on the new software.

b) The fixed assets have not been physically verified by the management during the year and we are therefore, unable to comment on the discrepancies, if any, which could have arisen on such verification. In our opinion, the frequency of verification of fixed assets is also not reasonable having regard to the size of the company and nature of its assets.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. a) As explained to us, inventories are physically verified by the Management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records of the Company, the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

b) In view of our comments in paragraph 3 (a) above, the provisions of Clauses iii

(b), iii (c) and iii (d) of paragraph 4 of the aforesaid Order are not applicable to the Company.

c) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

d) In view of our comment in paragraph 3 (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us and having regard to the explanation that for some items purchased for which comparable alternative quotations are not available because of the nature / quality of such items and delivery schedules and also sale of services for which suitable alternative sources are not available to obtain comparable quotations, there are generally adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventories, fixed assets and sale of goods and services except for internal control over purchase of provisions and decoration at one unit needs to be improved. Further, during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weakness in internal control system.

5. a) On the basis of the audit procedures performed by us, and according to the information, explanation and representations given to us, we are of opinion that, the particulars of contracts or arrangements in which directors were interested as contemplated under Section 297 and sub section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered.

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lacs with any party during the year. However, in respect of other transactions owing to the unique and specialized nature of items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prevailing market price at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable. Further, during the course of our audit, we have neither come across nor have we been informed of any order passed under the aforesaid sections by Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. a) According to records of the Company, and subject to comments in para 9 (b) below the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been instances of delay and non deposition.

Further, since the Central Government 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 information and explanations given to us, except for the cases stated below, there are no other undisputed amount payable in respect of provident fund, investor education & protection fund, income tax, employees state insurance, wealth tax, sales tax, custom duty, service tax, excise duty, cess and other statutory dues which were outstanding at the year end for period of more than six months from the date they become payable.

Amount (Rs.)

House Tax/ Municipal Tax & Water tax 2,341,575

Purchase Tax/ VAT/Entry tax etc. 275,924

Service Tax 230,732

Employees State Insurance Dues 820,428

c) According to the information and explanations given to us, there are no dues outstanding of custom duty, excise duty, income tax, wealth tax and cess on account of any dispute which have not been deposited except for:

Name of statute Nature of dues Years Forum where dispute is Amount (Rs.) pending

Value Added Tax - UP Value Added Tax 2006-07 Additional Commissioner 231,160 (Appeals) - Agra

Value Added Tax - UP Value Added Tax 2007-08 Additional Commissioner 6,678,744 (Appeals) - Agra

6,909,904

Reference is also invited to Note 28 A (i) (b) as regards the Income Tax Department having appealed to the Hon'ble High court, Allahabad against the Order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD (Assessmentyear 1989-90 to 1991 - 92) and Luxury Tax Claimed under Section 43 B (Assessment Year 1987-88 to 1990-91). The total amount disputed (excluding interest & penalties) aggregated to Rs. 5,859,000.

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our report and in the immediately preceding financial year.

11. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution / bank. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Order is not applicable to the Company.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, clause 4 (xiii) of the Order is not applicable to the Company.

14. The Company has maintained proper record of transaction and contracts in respect of dealing or trading in securities and other investments viz. mutual funds. All other investments viz. mutual funds have been held by the Company in its own name.

15. 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. Accordingly, clause 4 (xv) of the Order is not applicable to the Company.

16. On the basis of the records examined by us, the Company has not availed any term loan during the year. Accordingly, clause 4(xvi) of the Order is not applicable to the Company.

17. According to the information and explanations given to us and on an overall examination of the financial statements and after placing reliance on the reasonable assumptions made by Company for classification of long term and short term usages of funds, we are of the opinion that prima facie no funds raised on short term basis have been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is not applicable to the Company.

19. The Company has not issued any debentures during the year. Accordingly, clause 4 (xix) of the Order is not applicable to the Company.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Order is not applicable to the Company.

21. During the course of our audit of the books of accounts of the Company, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.

for RAY & RAY

Chartered Accountants

Sd/-

(ANIL KUMAR SHARMA)

Partner

Membership No. 80085

Firm Registration no. 301072 E

New Delhi, the 29th May, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of U.P. Hotels Limited ("the Company") as at 31st March, 2011 and also the Profit & 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 (‘the Order') as amended by Companies (Auditor's Report) (Amendment) issued by the Central Government in terms of sub - section (4A) of Section 227 of the Companies Act, 1956 (“the Act”)and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 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 in conjunction with Schedules 1 to 23 and subject to Note 21 (iv) as regards Hotel Earnings in foreign exchange not verified by us contained in Schedule 23 of Notes to the Account, 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT OF U.P. HOTELS LIMITED OF EVEN DATE.

1. a) The Company has generally maintained proper records showing full particulars regarding valuation of different type of assets including quantitative details and situation of fixed assets. The Company is in the process of updating its records on a new software.

b) According to the informations and explanations given to us, the Company physically verified its assets over a two year period. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this policy, the Company has physically verified certain assets during the year. According to the explanations given to us, the discrepancies noticed on physical verification were not material and these have been properly dealt with in the books of account.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. a) As explained to us, inventories are physically verified by the Management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records of the Company, the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

b) In view of our comments in paragraph 3 (a) above, the provisions of Clauses iii (b), iii (c) and iii (d) of paragraph 4 of the aforesaid Order are not applicable to the Company.

c) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

d) In view of our comment in paragraph 3 (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us and having regard to the explanation that for some items purchased for which comparable alternative quotations are not available because of the nature / quality of such items and delivery schedules and also sale of services for which suitable alternative sources are not available to obtain comparable quotations, there are generally adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventories, fixed assets and sale of goods and services. Further, during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weakness in internal control system.

5. a) On the basis of the audit procedures performed by us, and according to the information, explanation and representations given to us, we are of opinion that, the particulars of contracts or arrangements in which directors were interested as contemplated under Section 297 and sub section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered.

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lacs with any party during the year. However, the other transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable. Further, during the course of our audit, we have neither come across nor have we been informed of any order passed under the aforesaid sections by Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. a) According to records of the Company, and subject to comments in para 9 (b) below the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been delays in few cases.

Further, since the Central Government 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 information and explanations given to us, except for the cases stated below, there are no other undisputed amount payable in respect of provident fund, investor education & protection fund, income tax, employees state insurance, wealth tax, sales tax, custom duty, service tax, excise duty, cess and other statutory dues which were outstanding at the year end for period of more than six months from the date they become payable.

Amount (Rs.)

House Tax/ Municipal Tax & Water tax 2,075,582

Purchase Tax / VAT/Entry tax etc. 328,324

Service Tax 283,198

Employees State Insurance Dues 36,290

Wealth Tax 37,777

c) According to the information and explanations given to us, there are no dues outstanding of sales tax, custom duty, excise duty, income tax, wealth tax and cess on account of any dispute which have not been deposited except for:

Reference is also invited to Note 2 (b) in Schedule 23, as regards the Income Tax Department having appealed to the Hon'ble High court, Allahabad against the Order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD (Assessment year 1989- 90 to 1991 – 92) and Luxury Tax Claimed under Section 43 B (Assessment Year 1987-88 to 1990-91). The total amount disputed (excluding interest & penalties) aggregated to Rs. 58.59 lacs.

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our report and in the immediately preceding financial year.

11. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution / bank. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Order is not applicable to the Company.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, clause 4 (xiii) of the Order is not applicable to the Company.

14. The Company has maintained proper record of transaction and contracts in respect of dealing or trading in securities and other investments viz. mutual funds. All other investments viz. mutual funds have been held by the Company in its own name.

15. 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. Accordingly, clause 4 (xv) of the Order is not applicable to the Company.

16. On the basis of the records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, we have to state that, the company had, prima facie, applied the term loans for the purposes for which they were obtained. The Company did not have any term loans outstanding at the year end.

17. According to the information and explanations given to us and on an overall examination of the financial statements and after placing reliance on the reasonable assumptions made by Company for classification of long term and short term usages of funds, we are of the opinion that prima facie no funds raised on short term basis have been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is not applicable to the Company.

19. The Company has not issued any debentures during the year. Accordingly, clause 4 (xix) of the Order is not applicable to the Company.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Order is not applicable to the Company.

21. During the course of our audit of the books of accounts of the Company, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.



for RAY & RAY Chartered Accountants

Sd/-

(A K SHARMA) Partner Membership No. 80085 Firm Registration no. 301072 E

New Delhi, the 30th May, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of U.R Hotels Limited ("the Company") as at 31s March, 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. 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.

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 incfudes 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 ("the Order) as amended by Companies (Auditors Report) (Amendment) issued by the Central Government in terms of sub - section (4A) of Section 227 of the Companies Act, 1956 ("the Act")and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 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 in conjunction wrth Schedules 1 to 24 and Subject to Note 17 (B) as regards remuneration of Rs. 430.445 is subject to Shareholders approval and Note 21 (iv) as regcrds Hotel Earnings in foreign exchange not

verified by us contained In Schedule 24 of Notes to the Account give the Information cequired 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 31 * March, 2010;

(b) in the case of the Profit and Loss Account, of the Profit of the Company foi 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF U.P. HOTELS LIMITED OF EVEN DATE.

1. a) The Company has generally maintained proper records showing full particulars regarding valuation of different type of assets including auantitative aetails and situation of fixed assets.

b) According to the informations and explanations given to us, the Company physically verified its assets over a two year period. In our opinion, this periodicity cf physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this policy, the Company has physically verified certain assets during the year. According to the explanations given* to us, the discrepancies noticed on physical verification were not material and these have been properly dealt with In the books of account.

c) During the year no substantial part of fixed assets has been disposed off by the Company. Therefore, the provisions of clause 4 (i) (c) of the Companies (Auditors Report) Order 2003 (the Order) in our opinion, are not applicable to the Company.

2. a) The Inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b) The procedures for physical verification of inventories, which were followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records of the Company, the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between physical stock and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms

or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (a), (b), (c) and (d) of clause 4 (Hi) of the Order are not applicable to the Company.

b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed In the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provision of sub-clause (e), (f) and (g) of clause 4 (iii) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us and having regard to the explanation that for some Items purchased for which comparable alternative quotations are not available because of the nature I quality of such Items and delivery schedules and also sale of services for which suitable alternative sources are not available to obtain comparable quotatio is, there are generally adequate internal control system commensurate with the size of .he company and nature of its business with regard to purchase of inventories, fixed assets and sale of goods and services. Further, during the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weakness in internal control system.

5. a) On the basis of the audit procedures performed by us, and according to the information, explanation and representations given to us, we are of opinion that, the particulars of contracts or arrangements in which directors were interested as contemplated under Section 29 7 and sub section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have t een so entered.

b) In our opinion, and according 1o the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lacs with any party during the year. However, the other transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. ,

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable. Further, during the course of our audit, we have neither come across nor have we been informed of any order passed under the aforesaid sections by Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. a) According to records of the Company, and subject to comments in para 9 (b) below the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been delays In few cases.

Further, since the Central Government 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 information and explanations given to us, except for the cases stated below, there are no other undisputed amount payable in respect of provident fund, investor education & protection fund, income tax, employees state insurance, wealth tax, sales tax, custom duty service tax, excise duty, cess and other statutory dues which were outstanding at the year end for period of more than six months from the date they become payable.

Amount (Rs.)

House Tax / Municipal Tax & Water tax 5.790.000

Purchase Tax I VAT I Entry tax etc. 254.970

Service Tax 199.400

c) According to the information and explanations given to us, there are no dues outstanding of sales tax custom duty, excise duty, income tax, wealth tax and cess on account of any dispute which have not been deposited except for:

Reference Is also Invited to Note 2 (b) in Schedule 24. as regards the Income Tax Department having appealed to the Honble High court. Allc labod against the Order of the Income Tax Appellate Tribunal upholding the views of the Company In respect of the claim of deduction regarding edrnings In convertible foreign exchange under Section 80 HHD (Assessment year 1989-90 to 1991 - 92) and Luxury Tax Claimed under Section 43 8 (Assessment Year 1987-88 to 1990-91). The total amount disputed (excluding Interest & penalties) aggregated to Rs. 58.59 lacs.

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our report and in the immediately preceding financial year.

11. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution / bank. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Order is not applicable to the Company.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, clause 4 (xiii) of the Order is not applicable to the Company.

14. The Company has maintained proper record of transaction and contracts in respect of dealing or trading in ;ecurities and other investments vi2. mutual funds. All other investments viz. mutual funds have been held by the Company in its own name.

15. 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. Accordingly, clause 4 (xv) of the Order is not applicable to the Company.

16. On the basis of the records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, we have to "state that, the company had, prima facie, applied the term loans for the purposes for which they were obtained. The Company did not have any term loans outstanding at the year end.

17. According to the information and explanations given to us and on an overall examination of the financial statements and after placing reliance on the reasonable assumptions made by Company for classification of long term and short term usages of funds, we are of the opinion that prima facie no funds raised on short term basis have been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is not applicable to the Company.

19. The Company has not issued any debentures during the year. Accordingly, clause 4 (xix) of the Order is not applicable to the Company.

U.R HOTELS LIMITED

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Order is not applicable to the Company.

21. According to the information and explanations given to us by the management no fraud on or by the Company has been noticed or reported during the course o our audit.

for RAY & RAY

Chartered Accountants

Sd/-

(A K SHARMA)

Partner

Membership No. 80085

Firm Registration no. 301072 E

New Delhi, the 15th May 2010