Auditor Report of Surya Funcity Ltd.

Mar 31, 2010

1. We have audited the attached Balance Sheet of Surya Funcity Limited as at 31st March, 2010, the related Profit & Loss Account and 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, (as amended) by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) 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, Profit & Loss Account and Cash Flow Statement, dealt with by this report, are in agreement with the books of account.

d) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is, prima facie, 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.

f) In our opinion and to the best of our information and according to the explanations given to us the said accounts, read with notes thereon and Schedules annexed thereto, give in the prescribed manner the information required by the Companies Act, 1956 and give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

ii) in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date on accounts of Surya Funcity Limited for the year ended 31" March, 2010).

1. In respect of its Fixed Assets :

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified its fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion and according to the explanations given to us, a substantial part of fixed assets, has not been disposed off during the year, thus there is no effect on the going concern status of the Company.

2. The Company is not engaged in any manufacturing/trading activities; accordingly clauses (2-a) to (2-c) in respect of inventories are not applicable and have, therefore, not been commented upon.

3. a) In our opinion and according to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from Companies/firms/other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has not granted any loans, secured or unsecured to firms/other parties covered in the register maintained under Section 301 of the Companies Act, 1956; however, the Company, has given interest free advance (Rs. 8,787,000/-) to a Company, keeping in view the long term involvement and business interest; the terms & conditions of the said advance though not specified are, prima-facie, not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. According to the information and explanations provided by the management, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered and there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, hence para (5-b) of the Order is not applicable.

6. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A & 58AA or any other relevant applicable provisions of the Companies Act, 1956 and the rules framed thereunder.

7. In our opinion and according to the information & explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.

8. In respect of its Statutory dues :

a) According to the information & explanations given and records produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employees State Insurance, Provident Fund, Income-Tax, Sales-Tax, Wealth-Tax and other material statutory dues, as applicable, with the appropriate authorities.

The following undisputed amount was outstanding at the year end for a period of more than six months from the date it became payable.

PARTICULARS AMOUNT

(Rs. in lacs) Excise & Taxation Department, Punjab Entertainment Tax (for earlier years) 5.86

b) As informed, there were no disputed dues which remained unpaid as at 31st March, 2010.

9. The Company does not have any accumulated losses as at 31st March, 2010 and has not incurred any cash losses during the financial year ended on mat date or in the immediately preceding financial year.

10. According to the information & explanations given to us and on the basis of verification of records, the Company has not defaulted in repayment of dues to the banks. The Company has not taken any loan from financial institution.

11. According to the information & explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

12. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

13. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly the provisions of clause 4(xiv) of the Order are not applicable to the Company.

14. According to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

15. According to the information and explanations given to us, term loans availed by the Company have been utilised for the purpose for which the loans were raised.

16. According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2010, we report that no significant funds raised on short-term basis have, prima-facie, been used for long-term investment by the Company.

17. Based on the information & explanations furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

18. The remaining clauses of the order are either not applicable to the Company or are not relevant in the current year and accordingly, we have not reported thereon.

For VASUDEVA & ASSOCIATES

CHARTERED ACCOUNTANTS

Dated : 26th August, 2010 NITIN LATAWA

Place : Chandigarh PARTNER