Auditor Report of Lohia Securities Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Lohia Securities Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 judgments 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 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2015;

(b) in the case of 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order , 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

2. As required by section 143(3) of the Act, 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 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 it appears from our examination of those books.

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

d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

f. 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:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements.

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii) Unpaid Dividend of Rs. 6900/- declared in the Annual General Meeting of the company held on 29.9.2007 was not transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in our report to the members of LOHIA SECURITIES LIMITED for the year ended on March 31, 2015. In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we report that:

1) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As explained to us, the physical verification of fixed assets as on March 31, 2015 was conducted by the management during the year. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

2) The management has conducted physical verification in respect of finished goods, stores, spare parts and raw material at reasonable intervals. The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company has maintained proper records of inventory. No material discrepancies have been noticed on physical verification of stocks as compares to book records.

3) The company has not granted any loans or advances in the nature of loans to parties covered in the register maintained under section 189 of the Companies Act, 2013. Hence, the question of reporting whether the receipt of principal and interest are regular and whether reasonable steps for recovery of over-dues of such loans are taken does not arise.

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

5) Based on our scrutiny of the company's records and according to the information and explanation provided by the management in our opinion the company has not accepted any deposits so far upto 31st March 2015.

6) Accordingly to the information and explanations provided by the management, the company is not engaged in production of any such goods or provision of any such services for which the central government has prescribed particulars relating to utilization of material or labour or other items of cost. Hence, the provisions of section 148(1) of the Act do not apply to the company. Hence in our opinion no comment on maintenance of cost records under section 148(1) of the Act is required.

7) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth tax, custom duty, value added tax, excise duty, cess and other statutory dues applicable to it.

According to the information and explanations given, no undisputed amounts payable in respect of Income Tax,Wealth Tax, Sales Tax, Value Added Tax, Customs Duty and Excise Duty were outstanding, as at 31st March' 2015 for a period of more than six months from the date they became payable except unpaid Dividend of Rs. 6,900/- declared in the Annual General Meeting of the Holding company held on 29.9.2007 was not transferred, to the Investor Education and Protection Fund by the Holding Company.

According to the records of the company, there are no dues of Sales Tax, Income Tax, Value Added Tax, Customs Duty, Wealth Tax, Excise Duty, Cesswhich have not been deposited on account of any dispute except as mentioned below:

Nature Amount Name of of Amount (Rs.) Deposited statute Dues (Rs.)

Income Income 1,05,35,490/- 10,00,000/- Tax, 1961 Tax

Income Income 43,74,200/- 36,99,010/- Tax, 1961 Tax

Name of Statute Period to Forum where which it Dispute is pertains pending

Income Tax, 1961 A.Y. 2010-11 CIT (Appeals), Kolkata

Income Tax, 1961 A.Y. 2011-12 CIT (Appeals), Kolkata

8) The company has no accumulated losses. The company has not incurred any cash losses during the financial year covered by our audit and also in the immediately preceding financial year.

9) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

10) According to the records of the company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by others from bank or financial institutions.

11) According to the records of the company, the company has not obtained any term loans. Hence, comments under the clause are not called for.

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

Place: 1, India Exchange Place, For PATNI & CO.

Kolkata-700 001 CHARTERED ACCOUNTANTS

(Firm Reg. No. 320304E)

Dated: The 28thday of May' 2015 S. SUREKA

(Partner)

Membership No. 057918

---

Mar 31, 2014

We have audited the accompanying financial statements of Lohia Securities Ltd. which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto, 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 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") read with the General Circular 15/2013 dated 13.9.2013 of the Ministry of Corporate Affairs in respect of Sec 133 of the Companies Act, 2013. 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 Standard 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 be 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 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;and

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

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

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 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 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, the Statement of Profit & 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, the Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13.9.2013 of the Ministry of Corporate Affairs in respect of Sec 133 of the Companies Act, 2013.;

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 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.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: -

i) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets of the company were physically verified by the management during the year. We have been informed that no material discrepancies have been noticed on such physical verification. Substantial parts of fixed assets have not been disposed off during the year, which will affect its status as going concern.

ii) Physical verification of inventories has been conducted by the management during the year at reasonable intervals. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. The company is maintaining proper records of inventory. As informed to us, no discrepancies were found on physical verification of inventories as compared to book records.

iii) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register required to be maintained under section 301 of the Companies Act, 1956. Hence question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the company, whether reasonable steps for recovery of over dues of such loans are taken does not arise.

The company has taken unsecured loan from five parties covered in the register required to be maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 5,22,25,000/-. In our opinion, the rate of interest and other terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. The company is regular in the payment of interest. The balance of loan as on 31.03.2014 is T 93,14,728/- There is no specific stipulations which regard to repayment of loans.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of fixed assets and for providing services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v) As per information and explanations given to us we are of the opinion that the contracts or arrangements that need to be entered into a register required to be maintained in pursuance of section 301 of the Act have been so entered.

In our opinion, each of these contracts or arrangements made in pursuance of contracts or arrangements have made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) According to information and explanations given to us, in our opinion, the company has not accepted public deposits upto 31.03.2014.

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

viii) The company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence in our opinion, no comment on maintenance of cost records u/s 209(1)(d) is required.

ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable.

According to the information and explanation given to us and on the basis of our examination of the documents and records, the disputed statutory dues which have not been deposited with the appropriate authorities are as under:

Name of Statute Nature of Period to which Amount Dues it Pertains

Income Tax Act, Income F.Y. 2004- 5,80,437/- 1961 Tax 2005

Income Tax Act, Income F.Y. 2007- 9,98,598/- 1961 Tax 2008

Income Tax Act, Income F.Y. 2009- 24,84,920/- 1961 Tax 2010

Income Tax Act, Income F.Y. 2010- 43,74,200/- 1961 Tax 2011

Name of Statute Forum where dispute pending

Income Tax Act,1961 Commissioner of Income Tax

Income Tax Act,1961 Income Tax Appellate Tribunal

Income Tax Act,1961 Commissioner of Income Tax

Income Tax Act,1961 Commissioner of Income Tax

x) The company has no accumulated losses. The company has not incurred cash loss in the current financial year but there was cash loss of Rs. 46,23,999.43 in the immediately preceding financial year.

xi) According to records of the company, the company has not defaulted in repayment of dues to financial institutions or banks or debentures holders.

xii) As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii) The company is not a chit fund, nidhi or mutual benefit fund / society.

xiv) The company has maintained proper records of the transactions and contracts of dealing in shares, securities, debenture and other investments and we have been informed that timely entries have been made therein. As explained to us, all the shares have been laid by the company in its own name except to the extent of exemption granted u/s 49 of the Companies Act, 1956.

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii) According to the information and explanation given to us, we report that no funds raised on short-term basis have been used for long term investment by the company and vice versa.

xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix) The company has not issued any debenture.

xx) The company has not raised any money by public issues during the period covered by our audit report.

xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report.

1, India Exchange Place For PATNI & CO. Kolkata - 700 001 CHARTERED ACCOUNTANTS

Dated: The 29th Day of May 2014 SASHI SUREKA (Partner) Membership No. 057918 Firm Regn.No.320304E

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. Lohia Securities Limited as at 31st March, 2012, the Statement of Profit & Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are responsibility of the management of the company. 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 to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the Management in the preparation of financial statements and evaluating overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

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 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 as far as appears from our examination of the books.

c) The Balance sheet and Statement of Profit & Loss referred to in this report are in agreement with the books of account.

d) In our opinion, the Statement of Profit & Loss and Balance Sheet comply with the Accounting Standard referred to in sub- section 3(C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2012 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to notes given there on, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:-

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2012.

And

(b) In the case of the Statement of Profit & Loss, of the Loss of the company for the year ended on that date.

And

(c) In the case of the Cash Flow statements of the cash flow for the year ended on that date.

In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the

best of our knowledge and belief, we state as under: -

i) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by the management during the year. We have been informed that no discrepancies were noticed on such physical verification. Substantial part of fixed assets has not been disposed of during the year, which will affect its status as going concern.

ii) Physical verification of inventories has been conducted by the management during the year at reasonable intervals. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory. As informed to us, no discrepancies were found on physical verification of inventories as compared to book records.

iii) A) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register required to be maintained under section 301 of the Companies Act, 1956. Hence question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the company, whether reasonable steps for recovery of over dues of such loans are taken does not arise

B) The Company has taken unsecured loan from five parties covered in the register required to be maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs 9,66,00,000/-. In our opinion, the rate of interest and terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the company. The company is regular in payment of interest. The balance of loan as on 31.03.2012 is Rs 2,57,50,000/-. There are no specific stipulations with regard to repayment of loans.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v) According to the information and explanations given to us, in our opinion contracts or arrangements that need to be entered into the register required to be maintained u/s 301 of the Companies Act, 1956 have been so entered.

In our opinion, each of these contracts or arrangements made has been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vi) According to information and explanations given to us, the company has not accepted any public deposit upto 31.3.2012.

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

viii) The company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence, no comment on maintenance of cost records u/s 209(1)(d) is required.

ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Wealth Tax, Service tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service Tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable.

According to the information and explanations given to us and on the basis of our examination of the documents and records, the disputed statutory dues which have not been deposited with the appropriate authorities are as under:

t r Period to which it . Forum where dispute

Name of Statute Nature of Dues pertains Amount pending

Income Tax Act, 1961 Income Tax F. Y. 2004-2005 Rs 5,80,437/- Commissioner of Income Tax

x) The company has no accumulated losses. The company has incurred cash loss of Rs 57,57,969.05 in the current financial year and has cash loss of Rs 46,46,441.80 in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders.

xii) As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii) The company is not a chit fund, nidhi or mutual benefit fund / society.

xiv) The company has maintained proper records of the transactions and contracts of dealing in shares, securities, debenture and other investment and we have been informed that timely entries have been made therein. As explained to us, all the shares have been held by the company in its own name except to the extent of exemption granted u/s 49 of the Companies Act, 1956.

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii) According to the information and explanation given to us, we report that no funds raised on short-term basis have been used for long term investment by the company.

xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register required to be maintained under section 301 of the Act.

xix) The company has not issued any debenture.

xx) The company has not raised any money by public issues during the period covered by our audit report.

xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report.

For PATNI & CO.

Chartered Accountants Firm Regn. No. 320304E

Place : 1, India Exchange Place, 2nd Floor sd/-

Kolkata - 700 001 Sashi Sureka

Partner

Date : The 30th day of May, 2012 Membership No. 57918

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Lohia Securities Limited as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are responsibility of the management of the company. 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 to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the Management in the preparation of financial statements and evaluating overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

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 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 as far as appears from our examination of the books.

c) The Balance sheet and Profit & Loss Account referred to in this report are in agreement with the books of account.

d) In our opinion, the Profit & Loss Account and Balance Sheet comply with the Accounting Standard referred to in sub-section 3(C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2011 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to notes given there on, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:-

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011.

And

(b) In the case of the Profit & Loss Account, of the Loss of the company for the year ended on that date.

And

(c) In the case of the Cash Flow statements of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: -

i) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by the management during the year. We have been informed that no discrepancies were noticed on such physical verification. Substantial part of fixed assets has not been disposed of during the year, which will affect its status as going concern.

ii) Physical verification of inventories has been conducted by the management during the year at reasonable intervals. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory. As informed to us, no discrepancies were found on physical verification of inventories as compared to book records.

iii) A) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register required to be maintained under section 301 of the Companies Act, 1956. Hence question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the company, whether reasonable steps for recovery of over dues of such loans are taken does not arise

B) The Company has taken unsecured loan from five parties covered in the register required to be maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs.6,48,70,000/-. In our opinion, the rate of interest and terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the company. The company is regular in payment of interest. The balance of loan as on 31.03.2011 is Rs. Nil so there is no question of repayment of loans within stipulated time.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v) According to the information and explanations given to us, in our opinion contracts or arrangements that need to be entered into the register required to be maintained u/s 301 of the Companies Act, 1956 have been so entered.

In our opinion, each of these contracts or arrangements made has been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vi) According to information and explanations given to us, the company has not accepted any public deposit upto 31.03.2011.

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

viii) The company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence, no comment on maintenance of cost records u/s 209(1)(d) is required.

ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service Tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable.

According to the information and explanations given to us and on the basis of our examination of the documents and records, the disputed statutory dues which have not been deposited with the appropriate authorities are as under:

Name of Statute Nature of Period to Amount Dues which it pertains

Income Tax Act, Income Tax F.Y.2004-2005 Rs.5,80,347/- 1961

Income Tax Act, Income Tax F.Y.2007-2008 Rs.3,05,27,574/- 1961

Name of Statute Forum where dispute pending

Income Tax Act, Commissioner of 1961 Income Tax

Income Tax Act, Commissioner of 1961 Income Tax x) The company has no accumulated losses. The company has incurred cash loss of Rs.46,84,792.65 in the currrent financial year and has not incurred any cash loss in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders.

xii) As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii) The company is not a chit fund, nidhi or mutual benefit fund / society.

xiv) The company has maintained proper records of the transactions and contracts of dealing in shares, securities, debenture and other investment and we have been informed that timely entries have been made therein. As explained to us, all the shares have been held by the company in its own name except to the extent of exemption granted u/s 49 of the Companies Act, 1956.

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii) According to the information and explanation given to us, we report that no funds raised on short-term basis have been used for long term investment by the company.

xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register required to be maintained under section 301 of the Act.

xix) The company has not issued any debenture.

xx) The company has not raised any money by public issues during the period covered by our audit report.

xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report.

For PATNI & CO. Chartered Accountants sd/- S. Sureka Partner Membership No. 57918 Firm Regn. No. 320304E

Place : 1, India Exchange Place Kolkata - 700 001

Date : The 30th day of May, 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. Lohia Securities Limited as at 31st March, 2010, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are responsibility of the management of the company. 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 to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the Management in the preparation of financial statements and evaluating overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

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 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 as far as appears from our examination of the books.

c) The Balance sheet and Profit & Loss Account referred to in this report are in agreement with the books of account.

d) In our opinion, the Profit & Loss Account and Balance Sheet comply with the Accounting Standard referred to in sub-section 3(C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2010 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to notes given there on, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:- (a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010.

And

(b) In the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date.

And

(c) In the case of the Cash Flow statements of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR’S REPORT

In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: -

i) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by the management during the year. We have been informed that no discrepancies were noticed on such physical verification. Substantial part of fixed assets has not been disposed of during the year, which will affect its status as going concern.

ii) Physical verification of inventories has been conducted by the management during the year at reasonable intervals. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory. As informed to us, no discrepancies were found on physical verification of inventories as compared to book records.

iii) A) The Company had granted advance to one party covered in the register required to be maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2,00,00,000/-. In our opinion, the terms and conditions of advances given by the company to companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. There is no closing balance as on 31.3.2010

B) The Company has taken unsecured loan from five parties covered in the register required to be maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs. 7,32,25,000/-. In our opinion, the rate of interest and terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the company. The company is regular in payment of interest. There is no specific stipulation with regard to repayment of loans.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v ) According to the information and explanations given to us, in our opinion contracts or arrangements that need to be entered into the register required to be maintained u/s 301 of the Companies Act, 1956 have been so entered.

In our opinion, each of these contracts or arrangements made has been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vi) According to information and explanations given to us, the company has not accepted any public deposit upto 31.3.2010.

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

viii) The company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence, no comment on maintenance of cost records u/s 209(1)(d) is required.

ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service Tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable. According to records of the company, there are no dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

x) The company has no accumulated losses. The company has not incurred any cash loss in the current financial year and incurred cash loss of Rs.2,81,55,163/- in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders.

xii) As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii) The company is not a chit fund, nidhi or mutual benefit fund / society.

xiv) The company has maintained proper records of the transactions and contracts of dealing in shares, securities, debenture and other investment and we have been informed that timely entries have been made therein. As explained to us, all the shares have been held by the company in its own name except to the extent of exemption granted u/s 49 of the Companies Act, 1956.

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii) According to the information and explanation given to us, we report that no funds raised on short-term basis have been used for long term investment by the company.

xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register required to be maintained under section 301 of the Act.

xix) The company has not issued any debenture.

xx) The company has not raised any money by public issues during the period covered by our audit report.

xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report.

For PATNI & CO. Chartered Accountants sd/- Place : 1, India Exchange Place S. Sureka Kolkata - 700 001 Partner Membership No. 57918 Date : The 29th day of May, 2010