Auditor Report of Sugal & Damani Share Brokers Ltd.

Mar 31, 2015

I have audited the accompanying financial statement of Sugal & Damani Share Brokers Ltd ('the Company') which comprises the Balance sheet as at 31st March, 2015, the Statement of Profit and Loss and the cash flow statement for the year then ended, and a summary of the significant accounting policy and other explanatory information.

Management's Responsibility for the 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 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 the 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 the frauds and other irregularities; selection and application of appropriate accounting policies; making judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of internal control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I 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 there under.

I conducted my audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that I 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 of the financial statements that give true and fair view 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 companies directors, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the financial statements.

Opinion

In my opinion and to the best of my information and according to the explanations given to me, 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, 2015;

(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 Other Legal and Regulatory Requirements

1. As required by section 143(3) of the Act, I report that

(a) I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit.

(b) In my 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, 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, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 133 of the Companies Act, 2013, 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 sub section (2) of section 164 of the Companies Act, 2013.

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements,

ii. In my opinion and as per the information and explanations provided to me, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

iii. In my opinion and as per the information and explanations provided to me, there are no amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditor's Report

The Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of my report of even date to the members of Sugal & Damani Share Brokers Limited for the year ended 31st March 2015. I report that:

(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 are physically verified 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 and no material discrepancies were noted on such verification;

(ii) (a) The Inventory has been Physical verified during the year by the Management.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the book records.

(iii) As informed 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. Accordingly, the sub-clauses (a) and (b) 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 inventory and fixed assets and for the 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 system.

(v) According to the information and explanations given to us, the Company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

(vi) The Provision relating to maintenance of Cost Records under sub section (1) of Section 148 of the Companies Act, is not applicable to the company.

(vii) (a) The company is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and we have been informed that there are no arrears of outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months form the date they became payable.

(b) According to the information and explanations given to us, there are following dues of which have not been deposited on account of dispute and the same is being contested by the Company:

Sl. Nature of the Amount Name of the Statute No Dues in Lacs

01. Income Tax Act, 1961 Income Tax Rs.55.62

02. Rs.4.24

Sl. Period to which Forum where Name of the Statute the amount dispute is No relates pending

01. Income Tax Act, 1961 Asst year CIT 2010-11 APPEALS

02. Asst year CIT 2012-13 APPEALS

(c) In my opinion and according to the information and explanations given to me, there are no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The company has no accumulated losses and it has not incurred any cash loss in the year or in the immediately preceding financial year.

(ix) Based on my audit procedures and according to the information, the company has not defaulted in repayment of dues to Bank(s) or Financial Institution(s).

(x) During the year, the Company has not given guarantees for loans taken by others from bank(s) or financial institution(s).

(xi) In my opinion and according to the information and explanations given to me, the Company has not borrowed any Term Loan(s) during the year.

(xii) According to the information and explanations given to me, no material fraud on or by the Company has been noticed or reported during the course of my audit.

R. MUGUNTHAN Place : Chennai Chartered Accountant Date : 29.05.2015 Membership No. 021397

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Mar 31, 2014

Report on the Financial Statements

I have audited the accompanying financial statement of Sugal & Damani Share Brokers Limited (''the Company'') which comprises the Balance sheet as at 31st March, 2014, the Statement of Profit and Loss and the cash flow statement for the year then ended, and a summary of the significant accounting policy and other explanatory information.

Management''s Responsibility for the Financial Statements

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 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.

Auditor''s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I comply with the 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 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 the Management, as well as evaluating the overall presentation of the financial statements.

UAMANI

I believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion and to the best of my information and according to the explanations given to me, 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 31s'' March, 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 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 Companies Act, 1956 and sub-section (11) of Section 143 of the Companies Act, 2013, 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 Companies Act, 1956,1 report that:

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

(b) In my opinion, proper books of account as required by law have been kept by the Company so far as it appears from my examination of those books.

(c) The Balance Sheet, 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 my opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 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 the written representations received from the directors as on 31st 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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date to the members of Sugal & Damani Share Brokers Limited for the year ended 31stMarch 2014,1 report that:

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

b) Fixed Assets have been physically verified by the Management at reasonable intervals. As , . informed to us, no material discrepancies were noticed by the Management on such

verification.

c) In my opinion and according to the information and explanation given to me, a substantial portion of the fixed assets has not been disposed off by the company during the year and hence there is no impact on the going concern assumption.

ii). The Company is basically a Share Brokerage Company. Hence, the question of physical verification of Inventory and maintenance of Records for inventory does not arise except, in case of shares purchased on misdeal & wrong purchase are shown as stock and are valued at acquisition cost. Proper Records have been maintained for such stock.

iii). (a) According to the information and explanation given to me, the company has during the year, has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, para 4(iii) (a) to (d) of the order are not applicable.

(b) According to the information and explanations given to me the Company has taken loan from a company covered in the register maintained u/s 301 of the companies Act, 1956. The maximum amount involved during the year was Rs.427.57 Lacs and the year end balance of loans taken from such parties was Rs.360.68 lacs

(c) In my opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956 are not, prima facie, prejudicial to the interest of the company.

(d)The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

According to the information and explanations given to me the Company has not taken any loan from a company covered in the register maintained u/s 301 of the companies Act, 1956. Accordingly, para 4(iii) (e) to (f) of the order are not applicable.

iv). In my opinion and in accordance with the information and explanations given to me, there is adequate internal control procedure as regards to purchase of Plant & Machinery, Equipments and other Assets, commensurate with the size and nature of business carried out by the Company.

v). a) According to the information and explanations given to me, I am of the opinion that the particulars that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In my opinion and according to the information and explanations given to me, the company has not entered into any transactions with the parties entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year.

vi). The Company has not accepted any Deposits from the Public except Security Deposit received from Clients in course of Business.

vii) In my opinion the company has an Internal Audit system commensurate with its size and the nature of business.

viii) As per my information, the Company is not required to maintain cost records as prescribed by the Central Government U/s 209(1) (d) of the Companies Act, 1956.

ix) a) The Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues.

b) According to the information and explanation given to me, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, and Excise Duty were in arrears, as at 31.3.2014 for a period of more than six months from the date they became payable.

c) According to the information and explanation given to me, there are no dues of Sales Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute, other than income tax as detailed below;

Name of the dues Amount Period to which the Forum where the

(Rs } amount relates dispute is pending

Income Tax 55,62,310/- A.Y 2010-11 CIT (Appeals) Chennai

x). The Company does not have any accumulated losses as at 31st March 2014. The company has not incurred any cash losses during the financial year covered by my audit and it has incurred cash loss in the immediately preceding financial year.

xi) In my opinion and according to the information and explanations given to me, the Company has not defaulted in the repayment of dues to the Banks.

xii) According to the information and explanations given to me, I am of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii). In my opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society Therefore, the provisions of clause 4 (XIII) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiv) In my opinion, as such the Company is not dealing or trading in Shares, Securities, Debentures and other Investments. However in the course of business, the Company has invested in quoted and unquoted Shares and some shares are acquired on account of misdeal and wrong purchases, the same in the nature of current asset classified as stock in trade and valued at its acquisition cost. All other investments in the shares and securities are held in the Company''s Name.

xv) In my opinion and as per the information and explanations given to me the Company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

xvi) In my opinion and according to explanations given to me the Company has not taken any Term Loans.

xvii) In my opinion and according to the Information and explanation given to me and on overall examination of the Balance Sheet of the Company, I report that no fund raised on Short Term basis have been used for Long Term Investments.

xviii) The Company has not made any preferential allotment of shares to the Parties and Companies listed in the register maintained under section 301 of the Act.

xix) According to the information and explanations given to me, during the period covered by my Audit Report, the company has not issued any Debentures and therefore the provision regarding creation of security or charge in respect thereof does not arise.

xx) The Company has not raised any money by way of Public Issue during the period and therefore the provision regarding disclosing the end use of money does not arise.

xxi) According to the information and explanations given to me and on the based upon the audit procedures performed and representations made by the management no fraud on or by the company has been noticed or reported during the year ended 31st March2014.

R: Mugunthan

Chartered Accountant

Place : Chennai

Membership No. 021397

Date : 26.05.2014

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Mar 31, 2012

(1) I have audited the attached Balance Sheet of SUGAL & DAMANI SHARE BROKERS LIM- ITED, City Centre Plaza, No:7,! Floor, Anna Salai, Chennai 600 002, as at 31st March 2012, the Profit and Loss Account and Cash Flow Statement for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Company's Management. My responsibility is to express an opinion on these Financial Statements based on my Audit.

(2) I have conducted my Audit in accordance with auditing standards generally accepted in India. Those Standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.

(3) As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government under section 227(4A) of the Companies Act, 1956, and on the basis of information and explanations given to me and the books and records examined by me in the normal course of my audit and to the best of my knowledge and belief, I give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

(4) Further to my comments in the Annexure to above, I report that:

a) I have obtained all the information and explanations which, to the best of my knowledge and belief were necessary for the purpose of my Audit.

b) In my opinion, proper books of accounts as required by the law have been kept by the Company so far as appears from my examination of those books.

c) The Company's Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the Books of Accounts.

d) In my opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956,

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, I report that 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 on the said date.

f) In my opinion and to the best of my information and according to the explanations given to me, they said accounts read along with the notes thereon set out in Schedule, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet of the Company's State of affairs as at 31st March 2012.

ii) In the case of Profit and Loss Account, of the Profit for the year ended on 31st March 2012.

iii) In the Cash Flow Statement, of the Cash Flows of the Company for the year ended 31st March 2012.

ANNEXURE TO THE AUDITOR'S REPORT OF M/s SUGAL & DAMANI SHARE BROKERS LTD.

(Referred to in Paragraph 3 of my Report of even date.)

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

b) Fixed Assets have been physically verified by the Management at reasonable intervals. As informed to us, no material discrepancies were noticed by the Management on such verification.

c) In my opinion and according to the information and explanation given to me, a substantial portion of the fixed assets has not been disposed of by the company during the year and hence there is no impact on the going concern assumption.

ii). The Company is basically a Share Brokerage Company. Hence, the question of physical verification of Inventory and maintenance of Records for inventory does not arise except, in case of shares purchased on misdeal& wrong purchase are shown as stock and are valued at acquisition cost. Proper Records have been maintained for such stock.

iii). (a) According to the information and explanation given to me, the company has during the year, has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, Para 4(iii) (a) to (d) of the order are not applicable.

(b) According to the information and explanations given to me the Company has taken loan from a company covered in the register maintained u/s 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 10.86 Lacs and the yearend balance of loans taken from such parties was Rs.0.52 Lacs.

(c) In my opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956 are not, prima facie, prejudicial to the interest of the company.

(d) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv). In my opinion and in accordance with the information and explanations given to me, there is adequate internal control procedure as regards to purchase of Plant & Machinery, Equipments and other Assets, commensurate with the size and nature of business carried out by the Company.

v). a) According to the information and explanations given to me, I am of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In my opinion and according to the information and explanations given to me, the company has entered into transactions with the parties entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices which are reason- able having regard to the prevailing market price at the relevant time.

vi) The Company has not accepted any Deposits from the Public except Security Deposit received from Clients in course of Business.

vii). The Company has no formal Internal Audit Department as such. However, its control procedures ensure reasonable Internal checking of its Financial and other records.

viii) As per my information, the Company is not required to maintain cost records as prescribed by the Central Government U/s 209(1) (d) of the Companies Act, 1956.

ix). a) The Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues.

b) According to the information and explanation given to me, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, and Excise Duty were in arrears, as at 31.3.2012 for a period of more than six months from the date they became payable.

c) According to the information and explanation given to me, there are no dues of Sales Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute, other than interest tax as detailed below;

Name of the Dues Amount (Rs.) Period to which the Forum where the amount relates dispute is pending

Interest Tax 62,474/- A.Y 1994-95 ITAT,Chennai

Interest Tax 2,05,383/- A.Y 1995-96 ITAT,Chennai

x). The Company does not have any accumulated losses as at 31st March 2012. The company has not incurred any cash losses during the financial year covered by my audit and it has incurred cash loss in the immediately preceding financial year.

xi) In my opinion and according to the information and explanations given to me, the Company has not defaulted in the repayment of dues to the Banks.

xii) According to the information and explanations given to me, I am of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In my opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. There- fore, the provisions of clause 4 (XIII) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xiv) In my opinion, as such the Company is not dealing or trading in Shares, Securities, Debentures and other Investments. However in the course of business, the Company has invested in quoted and unquoted Shares on account of misdeal and wrong purchases, the same in the nature of current asset classified as stock in trade and valued at its acquisition cost. All other investments in the shares and securities are held in the Company's Name.

xv) In my opinion and as per the information and explanations given to me the Company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

xvi) In my opinion and according to explanations given to me the Company has not taken any Term Loans.

xvii) In my opinion and according to the Information and explanation given to me and on overall examination of the Balance Sheet of the Company, I report that no fund raised on Short Term basis have been used for Long Term Investments.

xviii) The Company has not made any preferential allotment of shares to the Parties and Companies listed in the register maintained under section 301 of the Act.

xix) According to the information and explanations given to me, during the period covered by my Audit Report, the company has not issued any Debentures and therefore the provision regarding creation of security or charge in respect thereof does not arise.

xx) The Company has not raised any money by way of Public Issue during the period and therefore the provision regarding disclosing the end use of money does not arise.

xxi) According to the information and explanations given to me and on the based upon the audit procedures performed and representations made by the management no fraud on or by the company has been noticed or reported during the year ended 31st March2012.

PLACE: CHENNAI R. MUGUNTHAN

DATE: 21.05.2012 CHARTERED ACCOUNTANT

Membership No: 021397

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Mar 31, 2010

1. I have audited the attached Balance Sheet of SUGAL & DAMANI SHARE BROKERS LIMITED, City Centre Plaza, No- 7, Ist Floor, Anna Salai. Chennal - 600002, as at 31st March, 2010 the Profit and Loss Account and Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. My responsibil- ity is to express an opinion on these Financial Statements based on my Audit.

2. I have conducted my Audit in accordance with auditing standards generally accepted in India. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government under section 227 (4A) of the Companies Act, 1956, and on the basis of information and explana- tions given to me and the books and records examined by me in the normal course of my audit and to the best of my knowledge and belief. I give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to my comments in the Annexure to above. I report that:

a) I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit.

b) In my opinion, proper books of account as required by the law have been kept by the Company so far as appears from my examination of those books;

c) The Company Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the Books of Accounts.

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

e) On the basis of the written representations received from the Directors, as on 31st March, 2010 and taken on record by the Board of Directors, I report that none of the Directors is disqualified as on 31 st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on the said date.

f) In my opinion and to the best of my information and according to the explanations given to me, the said accounts read with notes thereon set out in the Schedule, give the informa- tion required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet of the Companys State of affairs as at 31 st March, 2010.

ii) In the case of the Profit and Loss Account of the Profit for the year ended on 31st March 2010.

iii) In the Cash Flow Statement, of the Cash Flows of the Company for the year ended 31st March 2010.

ANNEXURE TO THE AUDITORS REPORT OF M/S SUGAL & DAMANI SHARE BROKERS LIMITED

(Referred to in paragraph 3 of my report of even date)

i) a) The company has maintained proper records showing full particulars, ircluding quantita- tive details and situation of Fixed Assets.

b) Fixed Assets have been physically verified by the Management at reasonable intervals. As informed to us, no material discrepancies were noticed by the management on such verification.

c) In my opinion and according to the information and explanation given to -me, a substantial portion of the fixed assets has not been disposed of by the company during the year and hence there is no impact on the going concern assumption.

ii) The company is basically a Share Brokerage Company. Hence, the question of physical verifi- cation of Inventory and maintenance of Records for inventory does not arise except, in case of shares purchased on misdeal & wrong purchase are shown as stock and are valued at acquisi- tion cost. Proper records have been maintained for such stock.

iii) a) According to the information and explanation given to me, the Company has during the year, not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, para 4(iii) (a) to (d) of the order are not applicabe.

b) According to the information and explanation given to me, the Company has taken loan from a company covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 25 Lacs and the year end bal- ances of loais taken from such parties was Rs. 24.71 Lacs.

c) in my opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying principal amounts as stipulated and has been regular in the payment of interest.

iv) In my opinion and in accordance with the information and explanations given to me, there is adequate internal control procedure as regards purchase of Plant & Machinery, Equipments and other Assets, commensurate with the size and nature of business carried out by the Company.

v) a) According to the information and explanations given to me, I am of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In my opinion and according to the information and explanations given to me, the com- pany has entered into transactions with the parties entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices, which are reason- able having regard to the prevailing market price at the relevant time.

vi) The Company has not accepted any Deposits from the Public except Security Deposit received from Clients in course of Business.

vii) The company has no formal Internal Audit department as such. However, its control procedures ensure reasonable Internal checking of its Financial and other records.

viii) As per my information, the Company is not required to maintain cost records as prescribed by the Central Government U/s 209(1) (d) of the Companies Act, 1956.

ix) a) The Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues.

b) According to the information and explanations given to me. no undisputed amounts pay- able in respect of Income Tax, Sales Tax. Wealth Tax, Service Tax, Custom Duty and Excise Duty were in arrears, as at 31.03.2010 for period of more than six months from the date they became payable.

c) According to the information and explanations given to me, there are no dues of Sales Tax, Customs Duty. Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute.

x) The Company does not have any accumulated losses as at 31 st March, 2010. The Company has not incurred any cash losses during the financial year covered by my audit and it has incurred cash loss in the immediately preceding financial year.

xi) In my opinion and according to the information and explanation given to me, the Company has no loan outstanding to a Financial Institution or bank or debenture holders.

xii) According to the information and explanations given to me, I am of the opinion that the Com- pany has not granted loans and advances on the basis of security by way of pledge of shares. debentures and other securities.

xiii) In my opinion, the Company is not a Chit Fund or a Nidhi / Mutual benefit Fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv) In my opinion, as such the Company is not dealing or trading in Shares, Securities, Debentures and other Investments. However in the course of business, the company has invested in quoted and unquoted shares on account of misdeal and wrong purchases, the same in the nature of current asset classified as stock in trade and valued at its acquisition cost. All other invest- ments in the shares & securities are held in companys name

xv) In my opinion and as per the information and explanations given to me, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) In my opinion and according to explanations given to me the Company has not taken any term loans.

xvii) In my opinion and according to the Information and explanations given to me and on overall examination of the balance sheet of the Comoany, I report that no fund raised on Short Term basis have been used for Long Term Investments.

xviii) The Company has not made any preferential allotment nf shares to the Parties and Companies listed in the register maintained under section 301 of the Act.

xix) According to the information and explanations given to me, during the period covered by my Audit Report, the company has not issued any Debentures and therefore the provision regard- ing creation of security or charge in respect thereof does not arise.

xx) The Company has not raised any money by way of Public Issue during the period and therefore the provision regarding disclosing the end use of money does not arise.

xxt) According to the information and explanations given to me and on the based upon the audit procedures performed and representations made by the management no fraud on or by the company has been noticed or reported during the year ended 31st March, 2010..



R. Mugunthan

Place: Chennai Chartered Accountant

Date: 28/05/2010 Membership No.: 021397