Almondz Global Securities Ltd

To the Members of

Almondz Global Securities Limited,

We have audited the attached Balance Sheet of Almondz Global Securities Limited(‘the Company’) as at 31 March 2010, the Profit and Loss Account and the CashFlow Statement of the Company for the year ended on that date, annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 (‘Order’),issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Companies Act, 1956, we enclose in the Annexure, a statement on the matters specifiedin paragraphs 4 and 5 of the said Order.

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

(i) we have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by theCompany, so far as appears from our examination of those books;

(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;

(iv) in our opinion, proper books of account and records as specified in Rule 15 of theSecurities Contracts (Regulation) Rules, 1957 have been kept by the Company in so far asit appears from the examination of such books;

(v) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report comply with the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956;

(vi) on the basis of written representations received from the directors and taken onrecord by the Board of Directors, we report that none of the directors were disqualifiedas on 31 March 2010 from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act, 1956;

(vii) The remuneration paid by the Company to its directors during the year ended 31March 2008 exceeded the limits specified in Section 309 of the Companies Act, 1956. Theexcess remuneration amounted to Rs. 64.22 lakhs. Payment of remuneration in excess oflimits specified in section 309 required prior approval of the Central Government. Theaudit report on the financial statements for the year ended

31 March 2008 and 31 March 2009 were qualified to this effect. The Company has made anapplication to the Central Government for waiver of recovery of remuneration paid inexcess of limits specified in section 309 for the year ended

31 March 2008. As explained to us, pending response from the Central Government thefinal outcome of the matter cannot presently be determined; and

(viii) Subject to our observations in paragraph (vii) above the effect of which isnot ascertainable, in our opinion, and to the best of our information and according tothe explanations given to us, the said accounts give the information required by theCompanies Act, 1956 in the manner so required and give a true and fair view in conformitywith 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 31March 2010;

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

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date;

(ix) The Company has complied with the requirements of Bombay Stock Exchange Limited(‘BSEL’) and the National Stock Exchange of India Limited (‘NSEIL’) inso far as they relate to maintenance of accounts and to the best of our knowledge andbelief, was regular in submitting the required accounting information to the respectivestock exchanges; and

(x) The Company has complied with the requirements of the derivatives segment of theBSEL and the NSEIL in so far as they relate to maintenance of accounts and was regular insubmitting the required accounting information to the derivatives segment of the exchange.

Annexure to the Auditors’ Report

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified every year. In our opinion, this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, donot affect the going concern assumption.

2. (a) The Company has conducted a physical verification of stock-in-trade by actualinspection or on the basis of statement received from depository participants in respectof shares held as stock-in-trade at reasonable intervals.

(b) The procedures for the physical verification of stock-in-trade followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) The Company is maintaining proper records in respect of stock-in-trade. Nodiscrepancies have been noticed on physical verification of stock.

3. (a) The Company has given an unsecured loan to Almondz Finanz Limited (a subsidiaryof the company) which is a company listed in the register maintained under section 301 ofthe Companies Act,1956; for the purpose of furthering the interests of the Company and hasbeen duly approved by the Board of Directors of the Company.

The maximum amount outstanding during the year was Rs. 512,000,000 and the year-endbalance of loan was Rs. 95,056,883. During the year, the Company has not granted any loanto any other party or firm covered in the register maintained under section 301 of theCompanies Act, 1956.

(b) In view of above and according to information and explanations given to us, we areof the opinion that the terms and conditions of loan granted by the Company are not, primafacie, prejudicial to the interests of the Company.

(c) In respect of loan granted to a Company as mentioned in 3(a) above, there are nostipulations regarding repayment of the loan and interest theron. Hence, we are unable tocomment on the regularity and payment of principal and the over due amount.

(d) The Company has taken loans from Almondz Commodities Private Limited (a subsidiaryof the company) covered in the register maintained under Section 301 of the Companies Act,1956. The maximum amount outstanding during the year was Rs.3,800,000 and the year-endbalance of such loans was Rs. Nil. During the year, the Company has not taken any loanfrom any other party or firm covered in the register maintained under section 301 of theCompanies Act, 1956.

(e) In our opinion, the rate of interest and other terms and conditions on which loanshave been taken from companies listed in the register maintained under section 301 of theCompanies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(f) In the case of loans taken from a Company listed in the register maintained undersection 301, the Company has been regular in repaying the principal amounts as stipulatedand in the payment of interest.

4. In our opinion and according to the information and explanations given to us, thereare adequate internal control systems commensurate with the size of the Company and thenature of its business for the purchase of fixed assets and sale of services. Theactivities of the Company do not involve purchase of inventory and sale of goods. We havenot observed any material weaknesses in the internal control system during the course ofour audit.

5. (a) In our opinion and according to the information and explanations given to us,the particulars of contracts or arrangements referred to in section 301 of the CompaniesAct, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, thetransactions made in pursuance of contracts and arrangements referred to in (a) above andexceeding the value of Rs. 5 lakh with any party during the year have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public.

7. In our opinion, the Company has an internal audit system commensurate with the sizeand nature of its business.

8. The Central Government has not prescribed the maintenance of cost records undersection 209(1)(d) of the Companies Act, 1956 for any of the services rendered by theCompany.

9. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company, amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund, Employees’State Insurance, Service tax, Income-tax, Sales-tax, Wealth tax and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us, the Company did not have any dues onaccount of Excise duty and Custom duty. No amount of unpaid dividend as at 31 March 2010was due to be deposited in Investor Education and protection fund during the year ended 31March 2010.

There are no dues on account of Cess under section 441A of the Companies Act, 1956since the date from which the aforesaid section comes into force has not yet been notifiedby the Central Government.

According to the information and explanations given to us, no undisputed amountspayable in respect of Investor Education and Protection Fund, Provident Fund,Employees’ State Insurance, Service tax, Income-tax, Sales-tax, Wealth tax and othermaterial statutory dues were in arrears as at 31 March 2010 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us, the following dues ofIncome-tax and Service tax have not been deposited by the Company on account of disputes.Further, according to information and explanations given to us, the Company does not haveany Sales tax, Wealth tax or Cess which have not been deposited with the appropriateauthorities on account of any dispute.

10. The Company does not have accumulated losses at the end of the financial year andhas not incurred cash losses in the financial year and in the immediately precedingfinancial year.

11. In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to its bankers and financial institutions.The Company did not have any outstanding debentures during the year.

12. The Company has not granted any loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, theCompany is not a chit fund / nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company hasmaintained proper records of transactions and contracts in respect of trading in shares,securities, debentures and other investments and timely entries have been made thereinexcept for investments in equity shares of other companies amounting to Rs. 350,000 whichare not held in the name of the Company and investments in equity shares amounting to Rs.50,000 which are not physically available / misplaced. The carrying value of these shareshas been fully provided for in the books of account.

15. In our opinion and according to the information and explanations given to us, theterms and conditons on which the Company has given guarantees for loans taken by othersfrom banks or financial institutions are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanations given to us, theterm loans taken by the Company have been applied for the purpose for which they wereraised.

17. According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we are of the opinion that the fundsraised on short-term basis have not been used for long-term investment.

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

19. The Company did not have outstanding debentures during the year.

20. The Company has not raised any money by public issues.

21. According to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported during the course of our audit.