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Auditor Report of Sakthi Finance Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of SAKTHI FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 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 Financial Statements

2. 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 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.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these 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.

4. 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.

5. 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 auditors' 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditors' Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

9. 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 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 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 the books of account.

d. In our opinion, the aforesaid 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 as referred to in Note No. 26 to the financial statements.

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

iii. There are no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in the Independent Auditors' report of even date Re : Sakthi Finance Limited (the Company)

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

b. These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

ii. The company does not hold any inventory. Therefore, the provisions of Clause 3(ii)(a) to (b) of the Companies (Auditor's Report) Order 2015 are not applicable to the company.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Therefore, the provisions of Clause 3(iii)(a) to (b) of the Companies (Auditor's Report) Order 2015 are not applicable to the company.

iv. There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the services rendered. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v. The company has accepted deposits from the public. The directives issued by the Reserve Bank of India and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder, wherever applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. The Central Government has not specified the maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act 2013 for the activities of the company.

vii. a. The company is regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income-tax, service tax, cess and other applicable statutory dues with the appropriate authorities. There are no such statutory dues as at the last day of the financial year, remaining in arrears for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, the disputed statutory dues (in case of income tax, sales tax, wealth tax, service tax, and cess) aggregating to Rs. 80.31 lakhs that have not been deposited on account of matters pending before appropriate authority are as under.

Name of the Nature of the Amount Period to which the dispute Statue Dues (Rs. in Lakhs) amount relates

Income Tax Income Tax Rs. 66.57 AY 2009-10 Act, 1961

Income Tax Act, 1961 Income Tax Rs. 13.74 AY 2012-13

Name of the Forum where dispute Statue is pending

Income Tax Commissioner of Act, 1961 Income Tax

Income Tax (Appeals), Act, 1961 C°imbat°re

c. During the year there are no amount required to be transferred by the company to investor education and protection fund.

viii. In our opinion, the Company's has no accumulated losses at the end of the financial year. The Company has not incurred cash losses during the year and in the immediately preceding financial year.

ix. The company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

x. The company has not given any guarantee for loans taken by others from banks or financial institutions.

xi. Term loans availed during the year have been applied for the purpose for which the loans were obtained.

xii. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For P.N. Raghavendra Rao & Co Chartered Accountants Firm Regn. No.:003328S

PON ARUL PARANEEDHARAN Coimbatore Partner 30th May 2015 Membership No.212860




Mar 31, 2014

1. We have audited the accompanying financial statements of Sakthi Finance Limited (the "Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. 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 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.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider 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.

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

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013; and

e. on the basis of written representations received from the directors as on 31st March 2014, and 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 clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 7 of our report of even date Re : Sakthi Finance Limited (the Company)

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

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 the nature of its assets. No material discrepancies were noticed on such physical verification.

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

ii. The Company does not hold any inventories. Accordingly, the provisions of Clause 4(ii) (a) to (c) of the Companies (Auditor''s Report) Order, 2003 ("CARO" or "Order) are not applicable to the Company.

iii. a. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii)(e) to (g) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. a. According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii. The Central Government has not prescribed the maintenance of cost records under Clause (d) of sub-section (1) of Section 209 of the Act in respect of services of the Company. Accordingly, the provisions of clause 4(viii) of the Order are not applicable to the Company.

ix. a. According to the information and explanations given to us and the records of the Company verified by us, in our opinion, the Company is generally regular in depositing, with appropriate authorities, undisputed statutory dues, including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c. In our opinion and according to the information and explanations given to us, there are no disputed statutory dues.

x. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

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

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. 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.

xvi. In our opinion and according to the information and explanations given to us, the term loans obtained during the year have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an 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.

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

xix. In our opinion and according to the information and explanations given to us, with respect to the debentures issued by the Company, requisite security/charge has been created.

xx. As informed to us, the Company has not raised any money by public issue during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on 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 year.

For P.N. Raghavendra Rao & Co Chartered Accountants Firm Regn. No.:003328S

P R Vittel Coimbatore Partner 28th May 2014 Membership No.18111


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Sakthi Finance Limited (the "Company")'' which comprise the Balance Sheet as at 31st March 2013'' the Statement of Profit and Loss and Cash Flow Statement for the year then ended'' and a summary of significant accounting policies and other explanatory information'' which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. 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 referred to in sub-section (3C) of Section 211 of the Companies Act 1956 (the "Act"). This responsibility includes the design'' implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement'' whether due to fraud or error.

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence'' about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management'' as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us'' the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet'' of the state of affairs of the Company as at 31st March 2013;

b. in the case of the Statement of Profit and Loss'' of the Profit for the year ended on that date; and

c. in the case of the Cash Flow Statement'' of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

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

8. As required by Section 227(3) of the Act'' we report that:

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

b. in our opinion'' proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. in our opinion'' the Balance Sheet'' Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

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

Annexure referred to in paragraph 7 of our report of even date Re : Sakthi Finance Limited (the Company)

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

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 the nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion'' the Company has not disposed of a substantial part of fixed assets during the year.

ii. The Company does not hold any inventories. Accordingly'' the provisions of Clause 4(ii) (a) to (c) of the Companies (Auditor''s Report) Order'' 2003 ("CARO" or "Order) are not applicable to the Company.

iii. a. According to the information and explanations given to us'' the Company has not granted any loans'' secured or unsecured to companies'' firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly'' the provisions of Clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. According to the information and explanations given to us'' the Company has not taken any loans'' secured or unsecured'' from companies'' firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly'' the provisions of Clause 4(iii)(e) to (g) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us'' there is an adequate internal control system commensurate with the size of the Company and the nature of its business'' for the purchase of fixed assets and for the sale of services. During the course of our audit'' we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. a. According to the information and explanations provided by the management'' we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us'' the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of services of the Company. Accordingly'' the provisions of Clause 4(viii) of the Order are not applicable and hence not commented upon.

ix. a. According to the information and explanations given to us and the records of the Company verified by us'' in our opinion'' the Company is generally regular in depositing'' with appropriate authorities'' undisputed statutory dues'' including provident fund'' investor education and protection fund'' employees'' state insurance'' income-tax'' sales-tax'' wealth-tax'' service tax'' customs duty and other material statutory dues applicable to it.

b. According to the information and explanations given to us'' no undisputed amounts payable in respect of provident fund'' investor education and protection fund'' employees'' state insurance'' income tax'' wealth tax'' service tax'' sales tax'' customs duty and other undisputed statutory dues were outstanding'' at the year end'' for a period of more than six months from the date they became payable.

c. In our opinion and according to the information and explanations given to us'' there are no disputed statutory dues.

x. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management'' we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions'' banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us'' adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion'' the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore'' the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion'' the Company is not dealing in or trading in shares'' securities'' debentures and other investments. Accordingly'' the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us'' the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us'' the term loans obtained during the year have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an 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.

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

xix. In our opinion and according to the information and explanations given to us'' with respect to the debentures issued by the Company'' requisite security/charge has been created.

xx. As informed to us'' the Company has not raised any money by public issue during the year. Accordingly'' the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on 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 year.

For P.N. Raghavendra Rao & Co

Chartered Accountants

Firm Regn. No.:003328S

P R Vittel

Coimbatore

Partner

29th May 2013 Membership No.18111


Mar 31, 2012

1. We have audited the attached Balance Sheet of Sakthi Finance Limited as at 31st March 2012, the annexed Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act 1956, we give below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. 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, 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. In our opinion, the Company has not disposed of substantial part of fixed assets during the year.

ii. The Company does not hold any inventories and therefore Clause 4(ii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

iii. a. The Company has not granted any loan during the year to companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has, however, granted loan to a company in the earlier year (Balance as at 31.3.2011 : Rs. 25.99 lakhs) which has been fully realised during the 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 loans granted are prima facie not prejudicial to the interest of the Company.

c. The receipt of principal amount and interest on loan granted is regular and the loan has been fully realised during the year.

d. The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

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 sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act 1956 that need to be entered into the register maintained under that section have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements and exceeding the value of five lakh rupees in respect of any party have been made at prices which are, prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the internal audit system of the Company is commensurate with the size and nature of its business.

viii. The Central Government has not prescribed the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956 for the company.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Service tax and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date of becoming payable.

b. In our opinion and according to the information and explanations given to us, there are no disputed statutory dues.

x. The Company has no accumulated losses as at 31st March 2012 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society.

xiv. The Company is not dealing in shares, securities, debentures and other investments.

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

xvi. In our opinion, the term loans obtained during the year have been utilised for the purpose for which it was obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short term funds for long term investments.

xviii. During the year, the company has made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956 and the price at which such shares have been issued is not prejudicial to the interest of the company.

xix. In our opinion and according to the information and explanations given to us, with respect to the debentures issued by the company, requisite security / charge has been created.

xx. The Company has not raised any money by way of public issue during the year.

xxi. 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.

4. Further to our comments referred to in Paragraph 3 above, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

e. on the basis of written representations received from the directors as on 31st March 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956;

f. in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

b. in so far as it relates to the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c. in so far as it relates to the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

For P.N. Raghavendra Rao & Co

Chartered Accountants

Firm Regn. No.:003328S

P R VITTEL

Coimbatore Partner

29th May 2012 Membership No.18111

 
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