Auditor Report of Inani Securities Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Inani Securities Limited, which comprise the Balance Sheet as at March 31, 2014, 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 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 principles generally accepted in India including Accounting Standards referred to in sub-section 211(3C) of the Companies Act, 1956 ("the Act") except regarding provision of gratuity accounted on actual basis instead of actuarial valuation as per AS 15 "Employee Benefits" and non-accounting of leave encashment as per actuarial valuation as per AS 15 "Employee Benefits issued by ICAI. 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.

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, 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.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, 2014;

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.

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 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 knowledgeand 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 section 211(3C) of Act except regarding provision of gratuity accounted on actual basis instead of actuarial valuation as per AS 15 "Employee Benefits" and non-accounting of leave encashment as per actuarial valuation as per AS 15 "Employee Benefits issued by ICAI;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of section 274(1)(g) of the Act.

Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report dated 30/05/2014 to the members of Inani Securities Limited on the financial statements for the year ended 31st March, 2014

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

b) The Company has 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 fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion, a substantial part of fixed assets has not been disposed off by the Company during the year.

2) a) The stock of securities held by the Company in dematerialized form in NSDL/CDSL is verified with the confirmation certificate received from them. The stock of securities held in physical form is physically verified with respective share certificates.

b) The existing procedures of reconciliation of stock followed by the management at periodical interval are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of its inventory and no material discrepancies were noticed on the reconciliation as mentioned above, as compared with book records.

3) In respect of loans, secured or unsecured granted/taken by Company to/from Companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

a) The Company has granted unsecured loans to 1 party covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs. 404.98 Lacs and balance at the year end is Rs. 3.90 Lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of the aforesaid loans, the party is repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

(d) In respect of the aforesaid loans granted, there is no overdue amount more than Rupees One Lakh.

(e) The Company has not taken any loans from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956.As the company has not taken any loans, the provisions of sub clause (e),(f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us the internal control procedure for purchase of fixed assets, shares and securities, units, corporate bonds, payment for expenses and company''s money market operations are commensurate with the size of the company and its nature of business.

5) a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, having regard to the comments in (a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year 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 directive issued by the Reserve Bank of India, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8) According to the information and explanations given to us, 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 the information and explanations given to us, and on the basis of our examination of the books of account, the Company is generally depositing with appropriate authorities undisputed statutory dues including Income Tax, Sales Tax, Service Tax, Provident fund and Wealth Tax and any other material Statutory dues applicable to it. As per information and explanations given to us, the Employees State Insurance Act is not applicable to the company. However, the Company has not paid undisputed Income Tax Liability of the Assessment year 2003-04 amounting to Rs. 4,08,360 /- was outstanding for more than six months as at the Balance Sheet date.

b) According to the information and explanations given to us, no disputed dues payable in respect of Sales Tax, Income Tax, Service Tax, Wealth Tax, Customs Duty and Cess were outstanding at 31st March, 2014 for a period of more than six months from the date they became payable.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) In our opinion, and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution/bank and the Company has not obtained any borrowings by way of debentures.

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

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

14) The Company has maintained proper records of transactions and contracts in respect of trading in shares, debentures, and other securities and timely entries have been made therein. The investments are 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.

16) The Company has raised new term loans during the year and have applied for the purpose for which they were raised.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow Statement of the Company, no funds raised on short- term basis have been used for long term investment.

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 during the year.

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

20) The Company has not raised any money through a public issue during the year.

21) Based upon the audit procedures performed and on the basis of information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Chartered Accountants Firm Registration No: 05834S

Partner Membership No: 027187

Place: Hyderabad Date: 30.05.2014

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Mar 31, 2012

1) We have audited the attached Balance Sheet of INANI SECURITIES LIMITED as at 31st March, 2012 the Statement of Profit and Loss for the year ended as on that date annexed thereto and Cash Flow Statement for the year ended on that date. 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 the Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, 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 Para 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, 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 dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from 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 March 31st, 2012 from being appointed as a Director in terms of clause (g) of sub-sec (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 together with the Significant Accounting Policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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.

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 of our report dated: 30/05/2012 to the members of Inane Securities Limited on the financial statements for the year ended 31st March, 2012

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

b) The Company has 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 fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion, a substantial part of fixed assets has not been disposed off by the Company during the year.

2) a) The stock of securities held by the Company is in dematerialized form in NSDL/CDSL and is verified with the confirmation certificate received from them. The stock of securities held in physical form is physically verified with respective share certificates. .

b) The existing procedures of reconciliation of stock followed by the management at periodical interval are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of its inventory and no material discrepancies were noticed on the reconciliation as mentioned above, as compared with book records

3) In respect of loans, secured or unsecured granted/taken by the Company to/from Companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted/taken unsecured loans from 1 party covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs. '604.55 Lacs and balance payable at the year end is Rs.17.70 Lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of the aforesaid loans, the party is repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

(d) In respect of the aforesaid loans granted, there is no overdue amount more than Rupees One Lakh

4) In our opinion and according to the information and explanations given to us the internal control procedure for purchase of fixed assets, shares and securities, units and corporate bonds and company's money market operations are commensurate with the size of the company and its nature of business.

5) a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, having regard to the comments in (a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year 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 directive issued by the Reserve Bank of India, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8) According to the information and explanations given to us, 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 the information and explanations given to us, and on the basis of our examination of the books of account, the Company is generally depositing with appropriate authorities undisputed statutory dues including Income Tax, Service Tax, Provident fund and Wealth Tax and any other material Statutory dues applicable to it. As per information and explanations given to us, the Employees State Insurance Act is not applicable to the company. However, pending adjustments of refunds of earlier Assessment years and rectification of the Assessment Orders, the Company has not paid undisputed Income Tax Liability of the Assessment year 2003-04 amounting to Rs.408360 /- was outstanding for more than six months as at the Balance Sheet date.

b) According to the information and explanations given to us, no disputed dues payable in respect of Income Tax, Service Tax, Wealth Tax, Customs Duty and Cess were outstanding at 31st March, 2012 for a period of more than six months from the date they became payable.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) In our opinion, and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution/bank and the Company has not obtained any borrowings by way of debentures.

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

13) The Company is not a chit fund, nidhi, mutal benefit fund or a society. Accordingly, clause 4(xiii) of the Order is not applicable

14) The Company has maintained proper records of transactions and contracts in respect of trading in shares, debentures, and other securities and timely entries have been made therein. The investments are 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.

16) The Company has raised new term loans during the year and have applied for the purpose for which they were raised.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow Statement of the Company, no funds raised on short- term basis have been used for long term investment.

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 during the year.

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

20) The Company has not raised any money through a public issue during the year.

21) Based upon the audit procedures performed and on the basis of information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For G.D. UPADHYAY & CO

Chartered Accountants,

Firm Registration No. 05834S

G.D. Upadhyay

Place : Hyderabad Partner

Date : 30.05.2012 Membership No. 027187

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Mar 31, 2011

1) We have audited the attached Balance Sheet of INANI SECURITIES LIMITED as at 31st March, 2011 and also the Profit and Loss Account for the year ended as on that date annexed thereto and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors Report) (Amendment) Order, 2004 (hereinafter referred to as "the Order") issued by the Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4) Further to our comments in the Annexure referred to in Para 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; and

vi) in our opinion and to the best of our information and according to the explanations

given to us, the said financial statements read together with the Significant Accounting Policies, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011:

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

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

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragaraph 3 of our report dated : 24th June, 2011 to the members of Inani Securities Limited on the financial statements for the year ended 31st March, 2011.

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

b) The Company has 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 fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion, a substantial part of fixed assets has not been disposed off by the Company during the year.

2) a) The stock of securities held by the Company in dematerialised form in demat accounts with NSDL/CDSL is verified with the confirmation certificate received from them. The stock of securities held in physical form is physically verified with respective share certificates.

b) The existing procedures of reconciliation of stock followed by the management at periodical interval are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of its inventory and no material discrepancies were noticed on the reconciliation as mentioned above, as compared with book records.

3) In respect of loans, secured or unsecured granted/taken by Company to/from Companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted unsecured loans to 3 parties covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs.671.78 Lacs and outstanding balance at the year end is Rs. 424.95 Lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudical to the interest of the Company.

(c) In respect of the aforesaid loans, the party is repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

(d) In respect of the aforesaid loans granted, there is no overdue amount more than Rupees One Lakh.

(e) The Company has not taken any loans from the Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As the company has not taken any loans, the provisions of the sub clause (e), (f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us the internal control procedure for purchase of fixed assets, shares and securities, units and corporate bonds and companys money market operations are commensurate with the size of the company and its nature of business.

5) a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, having regard to the comments in (a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year 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 directive issued by the Reserve Bank of India, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8) According to the information and explanations given to us, 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 the information and explanations given to us, and on the basis of our examination of the books of account, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Income Tax, Service Tax, Investor Education and Protection Fund, Wealth Tax and any other material Statutory dues applicable to it. As per information and explanations given to us, the Employees State Insurance Act is not applicable to the company. However, pending adjustments of refunds of earlier Assessment years and rectification of the Assessment Orders the Company has not paid undisputed Income Tax Liability of the Assessment year 2003-04 amounting to Rs 408360/- and further Provident fund payable by the company for the financial year 2010-11 amounting to Rs.492811/- out of which Rs.236659/- was outstanding for more than six months as on the balance Sheet date.

b) According to the information and explanations given to us, no disputed dues payable in respect of Income Tax, Service Tax, Wealth Tax, Customs Duty and Cess were outstanding at 31st March, 2011 for a period of more than six months from the date they became payable.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution/bank and the Company has not obtained any borrowings by way of debentures.

12) According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14) The Company has maintained proper records of transactions and contracts in respect of trading in shares, debentures, and other securities and timely entries have been made therein. The investments are 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.

16) In our opinion and according to the information and explanations given to us, during the year company has not obtained any term loan from banks or financial institutions. Accordingly clause 4 (XVI) of the order is not applicable.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow Statement of the Company, no funds raised on short- term basis have been used for long term investment.

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 during the year.

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

20) The Company has not raised any money through a public issue during the year.

21) Based upon the audit procedures performed and on the basis of information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For G.D. UPADHYAY & CO Chartered Accountants, Firm Registration No. 05834S

G.D. Upadhyay Partner Membership No. 027187

Place : Hyderabad Date : 24th June, 2011

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Mar 31, 2010

1) We have audited the attached Balance Sheet of INANI SECURITIES LIMITED as at 31st March, 2010 and also the Profit and Loss Account for the year ended as on that date annexed thereto and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors Report) (Amendment) Order, 2004 (hereinafter referred to as "the Order") issued by the Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4) Further to our comments in the Annexure referred to in Para 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 financial statements read together with the Significant Accounting Policies, 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, 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragaraph 3 of our report dated : 31st July, 2010 to the members of Inani Securities Limited on the financial statements for the year ended 31st March, 2010.

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

b) The Company has 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 fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion, a substantial part of fixed assets has not been disposed off by the Company during the year.

2) a) The stock of securities held by the Company in dematerialised form in demat accounts with NSDL/CDSL is verified with the confirmation certificate received from them. The stock of securities held in physical form is physically verified with respective share certificates.

b) The existing procedures of reconciliation of stock followed by the management at periodical interval are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of its inventory and no material discrepancies were noticed on the reconciliation as mentioned above, as compared with book records.

3) In respect of loans, secured or unsecured granted/taken by Company to/from Companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted unsecured loans to 2 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.454.90 Lacs and outstanding balance at the year end is Rs. 349.22 Lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudical to the interest of the Company.

(c) In respect of the aforesaid loans, the party is repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

(d) In respect of the aforesaid loans granted, there is no overdue amount more than Rupees One Lakh

(e) The Company has not taken any loans from the Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As the company has not taken any loans, the provisions of the sub clause (e), (f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4) In our opinion, and according to the information and explanations given to us the internal control procedure for purchase of fixed assets, shares and securities, units and corporate bonds and companys money market operations

are commensurate with the size of the company and its nature of business.

5) a) In our opinion and according to the information and explanations given to us, the

transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, having regard to the comments in (a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year 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 directive issued by the Reserve Bank of India, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8) According to the information and explanations given to us, 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 the information and explanations given to us, and on the basis of our examination of the books of account, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Income Tax, Service Tax, Investor Education and Protection Fund, Wealth Tax and any other material Statutory dues applicable to it. As per information and explanations given to us, the Employees State Insurance Act is not applicable to the company. However, pending adjustments of refunds of earlier Assessment years and rectification of the Assessment Orders the Company has not paid undisputed Income Tax Liability of the Assessment year 2003-04 amounting to Rs 408360 /- b) According to the information and explanations given to us, no undisputed dues payable in respect of Income Tax, Service Tax, Wealth Tax, Customs Duty and Cess were outstanding at 31st March, 2010 for a period of more than six months from the date they became payable.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution/bank and the Company has not obtained any borrowings by way of debentures.

12) According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14) The Company has maintained proper records of transactions and contracts in respect of trading in shares, debentures, and other securities and timely entries have been made therein. The investments are 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.

16) In our opinion and according to the information and explanations given to us.during the year company has not obtained any term loan from banks or financial institutions. Accordingly clause 4 (XVI) of the order is not applicable.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow Statement of the Company, no funds raised on short- term basis have been used for long term investment.

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 during the year.

19) "The Company has not issued any debentures. Accordinglyclause 4(xix) of the Order

is not applicable.

20) The Company has not raised any money through a public issue during the year.

21) Based upon the audit procedures performed and on the basis of information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For G.D. UPADHYAY & CO

Chartered Accountants, Firm Registration No. 05834S

Place : Hyderabad G-D. Upadhyay

Partner

Date : 31st July, 2010 Membership No. 027187