Auditor Report of Magnanimous Trade & Finance Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Magnanimous Trade & Finance Ltd. "the company"), which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of section 133 of Companies Act,2013 and in accordance with the accounting principles generally accepted in India. 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.

AUDITORS'' RESPONSIBILITY

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company''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 the best of our infomation 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 sum of Rs. 14,09,033.00 shown under the head long term loans and advances, recoverable from Shri Prakash Kanodia.No recovery of this loan have been made. The company has adopted legal recourse for recovery for the same. However, provision for bad debts has not been made.

(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 of the company for the year ended on that date; and

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

Report on Legal and other 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 Section 227( 4A) of the Act, we give in the Annexure hereto 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 purposes 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 and Loss, and the 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 the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September,2013 of the Ministry Of Corporate Affairs in respect of section 133 of the Companies Act,2013

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

ANNEXURE TO INDEPENDENT AUDITORS''REPORT

ANNEXURE REFERED TO IN PARAGRAH 1 UNDER THE HEADING "REPORT ON LEGAL AND OTHER REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

1. In Respect of its Fixed Assets :

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us all fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, the company has not disposed off any fixed assets during the year.

2. In Respect of its inventories:

(a) The management has conducted physical verification of inventory at reasonable intervals.

(b) There is only building in the inventory therefore there is no requirement of physical verification of the same at reasonable intervals.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. (a) According to the information and explanations given to us the Company has granted

Unsecured loan to one party whose maximum balance at any time during the year is Rs.2,52,87,565.00 covered in the register maintained under section 301 of the Companies Act 1956 and the balance outstanding is Rs. 2,52,87,565.00 at the end of year.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the unsecured loan granted by the company are prima facie not prejudicial to the interest of the company.

(c) In our opinion and according to the information and explanations given to us the party is regular in payment of principal and interest according to the terms and conditions of the loan given during the year.

(d) In our opinion and according to the information and explanations given to us there is no overdues on account of loan granted by the company.

(e) According to the information and explanations given to us the company has not taken any loan, Secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence the provisions of sub paragraph V, VI & VII of paragraph 4(III) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. (a) According to the information and explanation provided to us, we are of the opinion that The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanation given to us, there is transaction made in pursuance of contract or arrangement with parties with whom transactions exceeding value of Rupees Five Lakhs have been entered into during the financial year are at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanation given to us, the Company has not accepted any deposits from the public. Therefore the provisions of clause (vi) of paragraph 4 of the order are not applicable to the company.

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

8. Since the company has not done any production or processing during the year thus the paragraph (VIII) of the paragraph 4 of the order not applicable.

9. In Respect Of Statutory Dues :

(a) According to the records of the company and information & explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Custom Duty, Excise Duty, Service Tax, and Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service Tax, and Cess were outstanding, at the year end for a period of more than six months from the date they became payable.

(b) According to the records of the Company and information and explanation given to us, there are no dues outstanding of sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, Cess, and Service Tax as applicable which have not been deposited on account of any dispute.

10. The company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses in the current year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, the Company does not have any borrowings from financial institutions, banks or by way of debentures.

12 In our opinion and according to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies. Therefore the provisions of clause 4(xiii) of the order are not applicable to the company.

14. In respect of dealing/trading in shares, securities, debentures and other investments in mutual funds, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments in mutual funds have been held by the Company, in its own name.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The Company did not have any term loans during the year.

17. The Company did not have any borrowings of short term during the year.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

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

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Om P.Agarwal & Associates Chartered Accountants FRN 006948C

Place: Kanpur (Om Prakash Agarwal) Dated: 28-05-2014 Proprietor M.No. 17821

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Mar 31, 2011

1. We have audited the attached Balance Sheet of MAGNANIMOUS TRADE & FINANCE LIMITED, KOLKATA, as at 31st March, 2011 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these

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

3. As required by 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 of the matters specified in paragraph 4 and 5 of the said Order,

4. Further to out comments in the Annexure referred to in paragraph (3) above, we report that:-

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

b) In our opinion, proper hooks 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 and-Profit and Loss Account dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet and Profit & Loss Account dealt, with by this report comply with the applicable accounting standards referred to in Sec.211 (3C) of the Companies Act, 1956.

e) On the basis of the 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 31.03.2011 from being appointed as 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 explanation given to us, the said accounts, read together with the notes thereof 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, Subject to the following;

Loans &. Advances include Rs. 1409033.00 from Shri Prakash Kanodia. No recovery of this loan have been made. The company has adopted Legal recourse for recoverse of the same, However, provision for bad debts has not been made. (Refer Note No. 5 of Notes on Accounts).

I. In the case of the Balance Sheet of the State of affairs of the company as at 31st March, 2011 and:

II. In the case of the Profit and Loss Account of the Company of the Profit for the year ended on that date.

III. In the case of cash flow statement, of the cash flows for the year ended on that date.

1. The nature of the company's business / activities during the year is such that clause (viii), of paragraph 4 of the companies (Audit Report) order, 2003 are not applicable to the company for the year ended 01.03.11.

2. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of Available information.

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets, No material discrepancies were noticed on such physical verification.

c) Based on our aerating of records of the company and the information and explanation required by us, we report that company has not disposed off any Fixed Assets during the F.Y. 2010-11.

3. a) As explained to us inventory have been physically verified by the management at reasonable intervals during the year. in our opinion the frequency of verification is reasonable, having regard to the size of the company and the nature of its business.

b) 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.

c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrapancies noticed on verification between the physical stocks and the book records were not material and have been duly adjusted.

4) The parties to whom the loans, or advances in the nature of loans have been given by the company are repaying the principal amount as stipulated and are also regular in payment of the interest except in following two cases, where interest has not been charged / debited by the company.

a) Shri Prakash Kanadia Outstanding Balance Rs. 1409033.00

b) Smt. Poonam Khurana Outstanding Balance Rs. Nil

(Amt of old balance of Rs. 361250.00 the company has recovered Rs. 250000.00 and the balance Rs. 111250.00 have been written off as bad debts.)

Now management is taking steps for recovery of the dues from Shri Prakash Kanndia.

5a) The company has granted unsecured loans to two parties whose maximum balance at any time during the year were Rs, 18849470/- & Rs. 9471713/- which are covered in the register maintained under section 301 of the Companies Act, 1956. The terms and conditions of such loans are not prejudicial to the interest of the company. There are no overdues of such loans.

b) The company has not taken unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

6. 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 with regard to purchase of inventory and fixed assets and with regard to the sale of goods and services.

7a) In our opinion, and according to the information and explanations given to us, the particulars of contract(s) and arrangement (s) referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under the Act.

b) In our opinion and according to the information and explanations give to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the company Act, 1956 and exceeding the value of Rs. Five Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

8. The company has not accepted any deposits in respect of which provisions at section 58A, 58AA or any other relevant provision of the companies Act, 1956 are applicable.

9. In our opinion the company has an Internal Audit system which is commensurate with the size of the company.

10.a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including investor education protection Fund, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Service Tax, Excise Duty, Cess and other statutory dues applicable to it.

b) According to the information and explanation give, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Service Tax and Excise Duty were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

c) According to the records of the company, there are no dues of sales Tax, Income Tax, Custom Tax / Wealth Tax, Service Tax, Excise Duty / Cess which have not been deposited on account of any dispute.

11. The accumulated losses of the company are not more than fifty percent of its not worth. The company has not incurred cash loss during the financial year covered by our audit and has not incurred any cash loss during immediately preceding financial year.

12. According to the records of the company, the company has not borrowed from financial institution or issued debentures till 31s March 2011.

13.According to the information & explanation given to us and based on the documents & records produced to us the company has not granted any loans and advance on the basis of security by way of pledge of shares, debentures or other similar securities.

14. on the basis of our examination of the companies records we are of the opinion that the company is maintaining adequate records regarding transactions and contracts regarding its trading activities in shares, securities, Debentures and other investment and timely entries have been made in these records. The shares, securities, Debenture and other investment are held by the company in its own name.

15. 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 institution.

16. According to the records of the company, the company has not obtained any term loan.

17. According to the information and explanations given by the management to us and on overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment by the company.

18. As required by the Non Banking Financial Companies Auditor's Report(Reserve Bank Direction), 1998 we Further state that:-

a) the Company incorporated prior to 9the January, 1997 had applied for registration as provided in section 45(A) of The Reserve Bank of India Act, 1934 (2 of 1934) and has received the certificate of Registration from the Reserve Bank of India as investment company.

b) The company has complied with the prudential norms relating to income recognition accounting standard, assets classification and provisioning of bad and doubtful debts as Applicable to it except in one case for which we have qualified our Audit Report.

c) The company has a branch office at Jaipur as per information provided to us,

19. According to the records of the company and the information and explanations provided by the management, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the company Act.

20. According to the records of the company, the company has not issued any debentures.

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

22. In our opinion, and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

PLACE : KANPUR

DATED : 27.06.2011

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Mar 31, 2010

1. We have audited the attached balance sheet of MAGNANIMOUS TRADE & FINANCE LIMITED, KOLKATA, as at 31st 2010 and also the profit and Loss Account of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are farce of material misstatement.

3. As required by companies (Auditors" Report) Order.2003 issued by the central Governments of India in terms of section 227 (4A) of the companies Act,1956. we enclose in the Annexure "A" statement of the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph (3) above we report that;-

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

c) The Balance Sheet and profit and Loss Account dealt with by this report are in agreement with the books of account.

e) On the basis of the written representations received from the Director as on 31st March,2010 and taken on record by the Board Of 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, The said accounts, read together with the 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 accoutering principles generally accepted ir India, Subject to the following;

Loans & Advances include Rs, 361250.00 recoverable from Ms. Poonam Khurana-& Rs, 1409033.00 Shri prakash Kanodia. No recovery' of these loans have been made. The company has adopted legal recourse for recovery of the same. However, provision for bad debts has not been made. (Refer Note No. 5)

1.In the case of the Balance Sheet of the State of affairs of the Company as at 31st March. 2010 and;

II. In the case of the Profit and Loss Account of the Company of the Profit for the year ended on that date.

III.IN the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEVN DATE

1. The nature of the company's business/actives during the year is such that clause (iii) of paragraph 4 of the companies (Audit Report) order 2003 are applicable to the company for the year ended 31.03.2010.

2, a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information. particulars

b) As explained to us, the fixed assets have been physically verified by the management during the year in a Phased periodical manner, which in our opinion le reasonable having regard to the size of the company and nature of its assets, No material discrepancies were noticed on such physical verification.

c) Based on our scrutiny "of records of the company and the information and explanation required by us, we report that company has not disposed off any Fixed Assets during the F.Y.2009-10.

3. a) As explained to us inventory have been physically verified by the management reasonable intervals during the Year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

b) 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

c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been duly adjusted.

4. The parties to whom the loans, or advances in the nature of loans have been given by the company are repaying the principal amount as stipulated and are also regular in payment of the interest except in following two cases, where interest has not been charged/debited by the company.

a) Shri prakash Kanodia Outstanding Balance Rs. 1409033.00

b) Smt Poonam Khurana Outstanding Balance Rs. 361250.00

Management has taken stops far recovery of the dues' from the above parties.

5 a) The company has granted unsecured loans to two parties whose maximum balances at any time during the year ware Rs.18187666/- Rs.760 5908/- which are covered in the register" maintained under section 301 of Companies Fact, 1956. The terms and conditions of such loans are not prejudicial to the interest of the company. There are no overdoes of such loans.

b) The company has not taken unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

6. 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 with regard to purchase of inventory and fixed assets and with regard to the sale of goods and services.

7.a) In our opinion, and according' to the information and explanations given to us. the particulars of contract (s) and arrangement(s) referred to in section 301 of the Companies Act, l956 have been entered' in the register required to be maintained under the Act.

b)In our opinion and according "to the information and explanations given to us, the transitions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the company Act, 1956 and exceeding the value of Rs. Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

8. The company has not accepted any deposits in respect of which provisions of section Section 58A,58AA or any other relevant provision of the Companies Act,l956 are applicable. '

9. In our opinion the company has an internal Audit System which is commensurate with the size of' the company.

10.a) According to the records of the company, the company is regular in depositing with appropriate arthritis undisputed" statutory dues including investor education Protection Fund, Income Tax. Sales Tax, Wealth Tax, Custom Duty, Service Tax, Excise Duty, Cess and other statutory dues applicable to it.

b) According to the information and explanation given, no undisputed amount payable in respect of Income Tax. Wealth Tax, Sales Tax, Custom Duty, Service Tax and Excise Duty' were outstanding as at' " 31st March, 2010 for a period of more than Six Months from the date they became payable.

c)According to the records of the company, there are no dues. of sales Tax, Income Tax, custom Tax/Wealth Tax, Service Tax, Excise Duty/Cess which have not been deposited on' account' of any dispute.

11. The accumulated losses of the company are not more than fifty percent of its net worth. The company has not incurred cash loss during the financial year covered by our audit and has not incurred any cash loss during immediately preceding' financial year.

12. According the records of the company, the company has not borrowed from financial institution or issued' debentures till 31st March 2010.

13. According to the information & explanation given to us and based on the documents & ' records produced to us the company has not granted any loans and advances on the basis of security by way Of Pledge of shares, debentures or other similar securities.

14. on the basis of our examination of the companies records we are of the opinion that the company is maintaining adequate records regarding transactions and contracts regarding Its trading activities in shares. Securities, debentures and other investment and timely entries have bean made it these records. The Shares, securities. debenture and other Investment are held by the company in its own name.

15 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 Institution.

16.According to the records of the company, the company has not obtained any term loan.

17 according to the information and explanations given by the "management to us and on overall examination of the balance sheet of the company we report that no funds raised on short term basis have been used for long term investment by the company.

18. AS required ' by the Non Banking Financial Companies' Auditor's' Report (Reserve Bank Director by the company.

a) The company, incorporated prior to 9th January,1997 had applied for registration as provided In Section 45(A) of The Reserve Bank of India as investment company.

b)The company has complied with the prudential norms relating to income recognition accounting standard, assets classification and provisioning of bad and doubtful debts as applicable to it, except in two cases for which we have qualified our Audit Report.

c)The Company has a branch office at" Jaipur as per information provided to us.

19. According to" the records of the company and the information and explanation provided by the management, the company has not made any preferential allotment' of shares to parties and companies covered in the register maintained Under Section 301 of the company Act.

20. According to the records of the company, the company has not issued any debentures.

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

22. In our opinion, and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during' the year that causes the financial statements to be materially misstated.

PLACE: KANPUR

DATED: 29.06.2010

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Mar 31, 2009

1. We have audited the attached Balance Sheet of MAGNANIMOUS TRADE & FINANCE LIMITED. KOLKATA, as at 3l,st March, 2009 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of (he Company''s management, Our responsibility is lo 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. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts'' and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant'' estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by Companies (Auditors'' Report) Order. 2003 issued by the Central Government of India in ''emis of .Section 227 (4A) of the Companies Act 1956, we enclose in the Annexure "A" statement of the matters specified in paragraph
4. Further lo on comments in the Annexure referred to in paragraph (3) above, we report that :-

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

b) In nir opinion, proper books of account as required by Law have been kept by the Cohipany so far as appears, from our examination of those books.

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agi cement with the books of account.

A) In >ur opinion, the Balance Sheet and Profit & Loss Account dealt with by this report coi iply with the applicable accounting standards referred to in Kec,2i 1 (3C) of the Ccnpauies Act. 1956.

e) On the basis of the written representations received from the Directors as on 31st M''irch.2009 and taken on record by the Board of Directors we report that none of the directors is disqualified as on 31,03.2009 from being appointed as director in terms of section 274(1) (g) of 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 notes thereon give the inlirmation required by the Companies Act 1956 in the manner so required and give a I ue and fair view in conformity with the accounting principles generally accepted in ndia. Subject to the following;

i)Loans & Advances include Rs. 17,70,283.00 recoverable from Ms. Poonam Khurana & 3hri Prakash Kanodia. The company has adopted legal recourse for recovery of the sai le, However, provision for bad debts has not been made. (Refer Note No. 8). ii) Stock in trade of shares as at 31.03.09 have been valued at cost while upto prtceeding previous year it was valued at cost or market price whichever is less. Due to change in basis of valuation profit has increased by Rs. 2132911.45. (Refer Note No. 5(a))

F. In the case of the Balance Sheet of the State of affairs of the Company as at 31st March, 2009 and; II, In the case of the Profit and Loss Account of the Company of the Profit For the year ended on that date, 111. In the case of cash How statement, of the cash flows for the year ended on thai date,

The nature of the.Company''s business/activities during the year is such that Clauses. paragraph-4 o the Companies (Audit Report) not applicable to the company foro the year ended 31 ,03.09

;> a) The company has maintained proper record" showing full particulars including quantitative details and situation of Fixed Asset? on the basis of • vailabia information.

b) As ftvpUii.ed to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in |our opinion is reasonable, having regard to the size of the company and nature of its assets, .No material discrepancies were noticed on such physical verification. Based on our scrutiny-of records of the company and the information and expic nation required by us«i we'' report that company has not disposed eff any Fixed Assets dating the F.Y. 2008-09.

a) As explained to us inventory have been physically verified by the management -at reasonable intervals during the year. In our opinion the frequency of verification is reasonable, having regard to the size of the company and the nature of its business.

The procedures of physical verification of inventories followed .by the managed-nt arc reasonable and adequate in relation to the size of the company and the nature of its business, examination, of the records of inventory, we are of the of.ini.on that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the'' physical stocks and the book records were not material and have been duly adjust id. ,

d) stock in tride of shaves as at 31.03.0'') have been valued at cost while upt;. proeooding previous year it was valued at cost or market pri;e whichever is less. Due to change in basis ot ¦ valuation Firofit has increased by Rs. 2132911.45.

a) The parties to whom the loans, or advances in the nature of loans have been given by the company are repaying the principal amount as stipulated and are also regular m payment of the interest except in following two;cases, where interest has net been charged/debited by the company.

The company hes granted unsecured loans to two parties whose maximum balances at an/ time during the y<^r were Rs.20117666/- & Rs. 2292818/- to covered in the register maintained under Section 301 ot the Comoanies Act, ''19F.6. The terms and conditions of such loans ^.r& not, prejudicial ''¦ o fhe interest of the company. There are no overdu.es ot such loans

b) The company[has not taken unsecured loans from companies; firms or other parties covered in the register maintained under section 301 of the Companied Act,. 1956.

In our opini and according to the information and explanations given to us,there are adequate internal control procedures commensurate with of the Company and the nature of its business with regard to purchase of inventory and fixed assets.

our opinion, and according to the information and explanations given to us, the particulars at contractus) and arrangement(s) referred to in section ::i0) of the Companies Act, 1956. have bean entered in the register required to be maintained under section.

our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Company Act, 19K. and exceeding the value of Rs. Five lacs in respect of an/ Party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

Tho company has not accepted ''any deposits in respect, of which provisions of section or any other relevant provision of the Companies Act are applicable. opinion the company has an internal Audit System which is, commensurate with the size of the company.

According the records of the company, the company is regular in depositing uith appropriate authorities undisputed statutory dues including investor education Protection Fund, Income Tax, Sales Tax, Wealth Tax,: Custom Duty, Service Tax, Excise Duty, Cess and other statutory dues applicable to it. the information and explanation given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, and excise Duty were outstanding as at 3.1st March, Z0O0 ponied ot rr.ove than Six rionfhs from the date they became payable

The records of the company, there are no dues of Sales lax, TncoiTK Tax. Custom Tax/Uelth Tax, Service Tax, Excise Duty/Cess which havebeen deposited on account of any dispute.

ii . The aecomuj.ated Josses of the company are not more than fifty percent of it net

The company has not incurred cash loss during the finanoial covered by our audit and has not incurred any cash loss during immediately proceeding financial year.

According o the records of the company, the company has not borrowed from fin gin:- a J institution or issued debentures till 31st Mareh''2009.

3., According t the information & sxplanati.on given to us and based on the documents - records produced to us the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other similar securities,

On the basis of our examination of the companies records we are of the opinion the company is maintaining adequate records regarding transaction and contracts regarding its trading activities in Shares, Securities Debentures and other investment and timely entries have been made in these records.The Shares,. Securities, Debenture and other investment are held by the company in its own name.

According to the records of the company and the information and explanationprovided hy the management, the company has not given any guoanf.ee to. loouis taken by others from bank or financial institution.

According o the records of the company, the company has not obtained any term.

7 According to the information and explanations given by the management to us and -n overall examination of the balance sheet of the company, wo report that no funds raised on short term basis have been used tor" long term investment by the company.

As raquireo by the Non Banking Financial. Companies Auditor''s Report (Reserve Bank Direction), 1999 we further state that :-

ajihe company; incorporated prior to 9th January, 1997, had applied. for registration as provided in Section 45(.A) of The Reserve Bank of India Act, : 1934 (?, of 1934) and has received the certificate, of Registration from the Reserve Bank of India as investment company.

b)Tho company has complied with the prudential norms relating to income recognition accounting standard, assets classification and provisioning of bad and doubtful debts as applicable to it, except in tfco cases for which we have qualified our Audt Report

c)The Company has a brenoh office at Jaipur as per information provided to us.

According to the —.ooods of the company and the information and explanation provided fry the management, the company has not made any p; cfercnt of shares to parties and companies covered in the register maintained dnder Section 301 of the Company Act,

According the records of the company, the company has not issued any debentures.

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

-: Tn our opinion, and according to the information and explanations given to us, no fraud on or by the company has bean noticed or reported during the year , that causes the financial statements to be materially misstated.

ON BEHALF OF THE BOARD

Sd/-

Sudhir kumar

Parasrampuria

DIRECTOR

Dated: 01/09/2009