Auditor Report of Swarna Securities Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Swarna Securities 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Emphasis of Matters

We draw attention to Clause (6) of the Note 1 to the financial statements, which describes the circumstances in which the Company may not be able to continue with the non banking finance business. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the 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.

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) The going concern matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) 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.

(g) 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 does not have any pending litigations which would impact its financial position.

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

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

Annexure referred to in our report

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

(b) According to the information and explanations given to us and as per the records of the Company examined by us the management has physically verified the fixed assets and no material discrepancies have been noticed on such verification.

(ii) The business of the Company does not involve holding any inventories. Hence,

(a) Not Applicable

(b) Not Applicable

(c) Not Applicable

(iii) The Company has not granted any loans or advances to any of the parties covered in the register maintained under section 189 of the Companies Act, 2013. Hence,

(a) Not Applicable

(b) Not Applicable

(iv) In our opinion the Company has an adequate internal control procedure commensurate with the size of the Company and the nature of its business; and there are no continuing failures to correct major weaknesses in internal control.

(v) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not accepted any deposits from the public.

(vi) The Central Government has not prescribed the maintenance of any cost records in respect to the activities of the Company.

(vii) (a) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has been regular in depositing the applicable statutory dues with the appropriate authorities. There are no undisputed amounts of any statutory dues outstanding as at the Balance Sheet date, for a period of more than six months from the date they became payable.

(b) Nil

(c) According to the information and explanations given to us and as per the records examined by us, there are no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(viii) The accumulated losses as at the end of the financial year to the Company as on the balance sheet date did not exceed fifty percent of its net worth; and the Company has not incurred any cash losses during the current financial year or the preceding financial year.

(ix) According to the information and explanations given to us and as per records of the Company examined by us, the Company has not defaulted in repayment of any dues to any banks, financial institutions or debentures holders.

(x) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not availed any term loans during the year.

(xii) No fraud on or by the Company has been noticed or reported during the year under audit.

Place: VIJAYAWADA for SESHADRY & COMPANY Date : 12.06.2015 Chartered Accountants FRN : 004993S

(sd) L.S. RAJENDRA Partner M.No.216211

---

Mar 31, 2014

We have audited the accompanying financial statements of M/s Swarna Securities Limited, (the ''Company''), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''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 (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.

Auditor''s Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the 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 on opinion on the effictiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion :

In our opinion and to 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 March 31, 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (the ''Order1) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE (Referred to in our Report of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verifications.

(c) The Company has not disposed off any of its fixed assets so as to affect its going concern status.

ii) (a) The nature of business of the Company does not involve holding inventories of finished goods, stores, spare parts or raw materials.

(b) Not Applicable.

(c) Not Applicable

iii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has neither taken nor granted any loans, secured or unsecured from or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same management as defined under sub-section (IB) of section 370 of the Companies Act, 1956.

iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of consumables, plant and machinery, equipment and other assets; and there is no continuing failure to correct any weaknesses in the internal controls.

v) (a) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not entered into any transaction, that needs to be entered into the register in pursuance of section 301 of the Companies Act, 1956.

(b) Not Applicable.

vi) The Company has neither accepted nor held any public deposits during the year under audit. Therefore, the provisions of sections 58A and 58AA of the Companies Act, 1956, and the rules made thereunder are not applicable.

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

viii) The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 for any of the activities of the company.

ix) As per the records of the Company examined by us and the information and explanations given to us, the Company has generally been regular in depositing statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of any statutory dues outstanding as at the date of the Balance Sheet for a period more than six months from the date they became payable.

x) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company and the Company has not incurred cash losses during the financial year under audit or the immediately preceding financial year.

xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of any dues either to its debenture holders.

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

xiii) According to the information and explanations given to us the provisions of any special statute applicable to chitfund, nidhi or mutual benefit society are not applicable to the Company during the year.

xiv) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of trading in shares, securities, debentures and other securities; and timely entries have been made therein. All shares, securities, debentures and other investments are held by the Company in its own name.

xv) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

xvi) As per the records of the Company examined by us, the Company has not obtained any term loans during the year under audit.

xvii) The amounts raised by the Company by the issue of secured redeemable debentures has been utilised for the purpose of lending moneys in the course of the business of the Company and not for the purpose of any long term investment.

xviii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not made any allotment of shares, preferential or otherwise, during the year.

xix) The Company has created security in respect of the redeemable debentures issued, by way of a floating charge on stock on hire and lease receivables not specifically charged to the Company''s Bankers; and other loans.

xx) The Company has not raised any money by public issue during the year under audit.

xxi) No fraud on or by the Company has been noticed or reported during the year in the course of our audit.

Place: VIJAYAWADA for SESHADRY & COMPANY

Date : 09.06.2014 Chartered Accountants

FRN : 004993S

(Sd) L.S. RAJENDRA

Partner M.No. 216211

---

Mar 31, 2013

Report on the Financial Statements :

We have audited the accompanying financial statements of M/s Swarna Securities Limited, (the ''Company''), which comprise the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''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 (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.

Auditor''s Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the 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. 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 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 Companyas at March 31, 2013;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE

(Referred to in Paragraph (3) of our Report of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verifications.

(c) The Company has not disposed off any of its fixed assets so as to affect its going concern status.

ii) (a) The nature of business of the Company does not involve holding inventories of finished goods, stores, spare parts or raw materials.

(b) Not Applicable.

(c) Not Applicable

iii) According to the information and explanations given to us and as per the records of the Company examined by us, The Company has neither taken nor granted any loans, secured or unsecured from or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same management as defined under sub-section (IB) of section 370 of the Companies Act, 1956.

iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of consumables, plant and machinery, equipment and other assets; and there is no continuing failure to correct any weaknesses in the internal controls.

v) (a) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not entered into any transaction, that needs to be entered into the register in pursuance of section 301 of the Companies Act, 1956.

(b) Not Applicable.

vi) The Company has neither accepted nor held any public deposits during the year under audit. Therefore, the provisions of sections 58A and 58AA of the Companies Act, 1956, and the- rules made thereunder are not applicable.

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

viii) The Central Government has not prescribed maintenanceTof cost records under section 209(l)(d) of the Companies Act, 1956 for the activities of the company.

ix) As per the records of the Company examined by us and the information and explanations given to us, the Company has generally been regular in depositing statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of any statutory dues outstanding as at the date of the Balance Sheet for a period more than six months from the date they became payable.

x) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company and the Company has not incurred cash losses during the financial year under audit or the immediately preceding financial year.

xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of any dues either to its debenture holders or to any financial institutions or banks.

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

xiii) According to the information and explanations given to us the provisions of any special statute applicable to chitfund, nidhi or mutual benefit society are not applicable to the Company during the year.

xiv) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of trading in shares, securities, debentures and other securities; and timely entries have been made therein. All shares, securities, debentures and other investments are held by the Company in its own name.

xv) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

xvi) As per the records of the Company examined by us, the Company tos not obtained any term loans during the year under audit.

xvii) The amounts raised by the Company by the issue of secured redeemable debentures has been utilised for the purpose of lending moneys in the course of the business of the Company and not for the purpose of any long term investment.

xviii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not made any allotment of shares, preferential or otherwise, during the year.

xix) The Company has created security in respect of the redeemable debentures issued, by way of a floating charge on stock on hire and lease receivables not specifically charged to the Company''s Bankers; and other loans.

xx) The Company has not raised any money by public issue during the year under audit.

xxi) No fraud on or by the Company has been noticed or reported during the year in the course of our audit.

Place: VIJAYAWADA for SESHADRY & COMPANY

Date : 06.06.2013 Chartered Accountants

FRN : 004993S

(sd)

L.S. RAJENDRA

Partner

M.No. 216211

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Swarna Securities Limited as at 31st March, 2012 and also the Profit and Loss Account 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. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of 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 enclose in Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

(b) In our opinion proper books of accounts 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 and Profit and Loss Account referred to in this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and Profit and Loss Account complies with the mandatory accounting standards referred to in section 211(3C) 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, we report that none of the directors is disqualified from being appointed as 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 tc the explanations given to us the said Balance Sheet and Profit & Loss Account 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:

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

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

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

ANNEXURE

(Referred to in Paragraph (3) of our Report of even date) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verifications.

(c) The Company has not disposed off any of its fixed assets so as to affect its going- concern status.

(ii) (a) The nature of business of the Company does not involve holding inventories of finished goods, stores, spare parts or raw materials.

(b) -Not Applicable-

(c) -Not Applicable-

(iii) According to the information and explanations given to us and as per the records of the company examined by us, the Company has neither taken or granted any loans, secured or unsecured from or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same management as defined under sub-section (IB) of section 370 of the Companies Act, 1956

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of consumables, plant and machinery, equipment and other assets; and there is no continuing failure to correct any weaknesses in the internal controls.

(v) (a) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not entered into any transaction, that needs to be entered into the register in pursuance of section 301 of the Companies Act, 1956. (b) -NotApplicable-

(vi) The Company has neither accepted nor held any public deposits during the year under audit. Therefore, the provisions of sections 58A and 58AA of the Companies Act, 1956, the rules made thereunder are not applicable.

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

(viii) The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 for the activities of the company.

(ix) As per the records of the Company examined by us and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of any statutory dues outstanding as at the date of the Balance Sheet for a period more than six months from the date they became payable.

(x) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company and the Company has not incurred cash losses during the financial year under audit or the immediately preceding financial year.

(xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of any dues to its debenture holders.

(xii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

(xiii) According to the information and explanations given to us the provisions of any special statute applicable to chitfund, nidhi or mutual benefit society are not applicable to the Company during the year.

(xiv) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of trading in shares, securities, debentures and other securities and timely entries have been made therein; and shares, securities, debentures and other investments are held by the Company in its own name.

(xv) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

(xvi) As per the records of the Company examined by us, the Company has not obtained any term loans during the year under audit.

(xvii) The amounts raised by the Company by the issue of secured redeemable debentures has been utilised for the purpose of lending moneys in the course of the business of the Company and not for the purpose of any long term investment.

(xviii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not made any allotment of shares, preferential or otherwise, during the year.

(xix) The Company has created security in respect of the redeemable debentures issued, by way of a floating charge on stock on hire and lease receivables not specifically charged to the Company's Bankers; and other loans.

(xx) The Company has not raised any money by public issue during the year under audit.

(xxi) No fraud on or by the Company has been noticed or reported during the year in the course of our audit.

Place: VIJAYAWADA for SESHADRY & COMPANY

Date : 04.06.2012 Chartered Accountants

FRN:004993S

(sd) L.S. RAJENDRA

Partner

M.No. 216211

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Swarna Securities Limited as at 31st March, 2011 and also the Profit and Loss Account 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. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of 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 enclose in Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

(b) In our opinion proper books of accounts 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 and Profit and Loss Account referred to in this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and Profit and Loss Account complies with the mandatory accounting standards referred to in section 211(3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified from being appointed as 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 Balance Sheet and Profit & Loss Account 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:

(i) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; and

(ii) in case of the Profit and Loss Account, of the profit of the Company for the year ended on that date.

ANNEXURE (Referred to in Paragraph (3) of our Report of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verifications.

(c) The Company has not disposed off any of its fixed assets so as to affect its going- concern status.

(ii) (a) The nature of business of the Company does not involve holding inventories of finished goods, stores, spare parts or raw materials.

(b) -Not Applicable-

(c) -Not Applicable-

(iii) (a) The Company has neither taken nor granted any loans, secured or unsecured from or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same management as defined under sub-section (IB) of section 370 of the Companies Act, 1956.

(b) According to the information and explanations given to us and as per the records of the Company examined by us, the rate of interest and other terms and conditions of the loans given and taken by the Company are not prejudicial to the interests of the Company.

(c) In respect of hire moneys due on stocks-on-hire under the hire purchase business transactions and general loans given by the Company in the ordinary course of its business, the parties are generally repaying the principal amount as stipulated and are also regular in payment of interest, wherever applicable.

(d) Where the sums are overdue, we are of the opinion that the Company has taken reasonable steps for the recovery of the same.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of consumables, plant and machinery, equipment and other assets; and there is no continuing failure to correct any weaknesses in the internal controls.

(v) (a) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not entered into any transaction, that needs to be entered into the register in pursuance of section 301 of the Companies Act, 1956.

(b) -Not Applicable-

(vi) The Company has neither accepted nor held any public deposits during the year under audit. Therefore, the provisions of sections 58A and 58AA of the Companies Act, 1956, the rules made thereunder are not applicable.

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

(viii) The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 for the activities of the company.

(ix) As per the records of the Company examined by us and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of any statutory dues outstanding as at the date of the Balance Sheet for a period more than six month from the date they became payable.

(x) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company and the Company has not incurred cash losses during the financial year under audit or the immediately preceding financial year.

(xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of any dues either to its debenture holders or to any financial institutions or banks.

(xii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

(xiii) According to the information and explanations given to us the provisions of any special statute applicable to chitfund, nidhi or mutual benefit society are not applicable to the Company during the year.

(a) -Not Applicable-

(b) -Not Applicable-

(c) -Not Applicable-

(d) -Not Applicable-

(xiv) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of trading in shares, securities, debentures and other securities and timely entries have been made therein; and shares, securities, debentures and other investments are held by the Company in its own name.

(xv) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

(xvi) As per the records of the Company examined by us, the Company has not obtained any term loans during the year under audit.

(xvii) The amounts raised by the Company by the issue of secured redeemable debentures has been utilised for the purpose of lending moneys in the course of the business of the Company and not for the purpose of any long term investment.

(xviii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not made any allotment of shares, preferential or otherwise, during the year.

(xix) The Company has created security in respect of the redeemable debentures issued, by way of a floating charge on stock on hire and lease receivables not specifically charged to the Company's Bankers; and other loans.

(xx) The Company has not raised any money by public issue during the year under audit.

(xxi) No fraud on or by the Company has been noticed or reported during the year in the course of our audit.

for SESHADRY & COMPANY Chartered Accountants FRN: 0049935 (sd) L.S. RAJENDRA Partner

Place : VIJAYAWADA Date : 04.06.2011

---

Mar 31, 2010

01. We have audited the attached Balance Sheet of Swarna Securities Limited as at 31st March, 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

02. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a best 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 of our opinion.

03. As required by the Companies (Auditors 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 enclose in Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

04. Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the Information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(b) In our opinion proper books of accounts 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 and Profit and Loss Account referred to in this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and Profit and loss account complies with the mandatory accounting standards referred to in section 211(3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified from being appointed as 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 Balance Sheet and Profit & Loss Account 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.

i) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

ii) in case of the Profit and Loss Account, of the profit of the Company for the year ended on that date.

ANNEXURE (Referred to in Paragraph (3) of our Report of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verifications.

(c) The Company has not disposed off any of its fixed assets so as to affect the going concern status.

ii) (a) The nature of business of the Company does not involve holding inventories of finished goods, stores, spare parts or raw materials.

(b) Not Applicable.

(c) Not Applicable

iii) (a) The Company has neither taken nor granted any loans, secured or unsecured from/to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same management as defined under sub-section (IB) of section 370 of the Companies Act, 1956.

(b) According to the information and explanations given to us and as per the records of the Company examined by us, the rate of interest and other terms and conditions of the loans given and taken by the Company are not prejudicial to the interests of the Company.

(c) In respect of hire moneys due on stocks-on-hire under the hire purchase business transactions and general loans given by the Company in the ordinary course of its business, the parties are generally repaying the principal amount as stipulated and are also regular in payment of interest, wherever applicable.

(d) Where the sums are overdue, we are of the opinion that the Company has taken reasonable steps for the recovery of the same.

iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of consumables, plant and machinery, equipment and other assets; and there is no continuing failure to correct any weaknesses in the internal controls.

v) (a) According to the information and explanations given to us and as per the records of the Company examined by us the Company has not entered into any transaction, that needs to be entered into the register in pursuance of section 301 of the Companies Act, 1956.

(b) Not Applicable.

vi) The Company has neither accepted nor held any public deposits during the year under audit. Therefore, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules made thereunder are not applicable.

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

viii) The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 for the activities of the company.

ix) As per the records of the Company examined by us and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of any statutory dues outstanding as at the date of the Balance Sheet for a period more than six months from the date they became payable.

x) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company and the Company has not incurred cash losses during the financial year under audit or the immediately preceding financial year.

xi) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of any dues either to its debenture holders or to any financial institutions or banks.

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

xiii) According to the information and explanations given to us the provisions of any special statute applicable to chitfund, nidhi or mutual benefit society are not applicable to the Company during the year.

(a) Not Applicable

(b) Not Applicable

(c) Not Applicable

(d) Not Applicable

xiv) In our opinion, the Company has maintained proper records of the transactions and contracts in respect of trading in shares, securities, debentures and other securities and timely entries have been made therein; and shares, securities, debentures and other investments are held by the Company in its own name.

xv) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

xvi) As per the records of the Company examined by us, the Company has not obtained any term loans during the year under audit.

xvii) The amounts raised by the Company by the issue of secured redeemable debentures has been utilised for the purpose of lending moneys in the course of the business of the Company and not for the purpose of any long term investment.

xviii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not made any allotment of shares, preferential or otherwise, during the year.

xix) The Company has created security in respect of the redeemable debentures issued, by way of a floating charge on stock on hire and lease receivables which are not specifically charged to the Companys Bankers; and other loans.

xx) The Company has not raised any money by public issue during the year under audit.

xxi) No fraud on or by the Company has been noticed or reported during the year in the course of our audit.



Place: VIJAYAWADA for SESHADRY & COMPANY

Date : 01.06.2010 Chartered Accountants

(sd) L.S. RAJENDRA

Partner