GSL Securities Ltd

To,

The Members of, GSL Securities Limited

1. We have audited the attached Balance Sheet of GSL SECURITIES LIMITED ason 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement forthe year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. 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 misstatements. 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.

3. As required by the Companies (Auditor’s Report) Order, 2003 ("Order")issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956and in terms of the information and explanations given to us and also on the basis of suchchecks, as we considered appropriate we set out in the Annexure, a statement on thematters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in Annexure referred to in paragraph 3 above we report that:-

a) We have obtained all the information and explanation, which to the best of ourknowledge 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 theCompany so far as it appears from our examination of those books; c) The Balance Sheet,Profit & Loss Account and Cash Flow Statement dealt with by this report are inagreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statementhave been prepared, in all material respects in compliance with the Accounting Standardsreferred to in Section 211(3C) of the Companies Act,1956.

e) On the basis of the written representations received from the Directors as on 31stMarch, 2011, and taken on the record by the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2011 from being appointed as a Director interms 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 explanationsgiven to us, the said accounts read together with the Significant Accounting Policies andother Notes generally give the information required by the Companies Act, 1956, in themanner so required and also give, a true and fair view : -

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

(ii) in the case of the Profit and Loss Account, of the loss for the year ended on thatdate and

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

Annexure to the Auditors’ Report

(Referred to in paragraph 3 of our report of even date to the members of GSLSecurities Limited for the year ended 31.03.2011)

i. a) The Company has maintained proper records to show full particulars includingquantitative details and situation of fixed assets.

b) As explained to us, during the year the fixed assets have been physically verifiedby the management at reasonable intervals and no material discrepancies have been noticedon such verification.

c) No Substantial part of fixed assets of Company has been disposed off during theyear.

ii. According to information and explanations given to us, during the year, the Companydoes not have any trading activity and hence does not have any inventory. Therefore thequestion of physical verification, adequacy of procedures of physical verification andmaintenance of proper records of inventory does not arise.

iii. a) As per information and explanations given to us, during the year the Companyhas not granted any loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under section 301 of the Companies Act, 1956.Accordingly, sub clause (a), (b), (c) and (d) of clause (iii) of paragraph 4 of theCompanies (Auditor’s Report) Order, 2003 is not applicable to the Company.

b) According to the information and explanation given to us the company has takenunsecured loan from a party covered in the Register maintained under section 301of theCompanies Act, 1956. The maximum Amount involved during the year was Rs. 2,46,500 and theyear end balance of such loan taken was Rs. 2,46,500

c) In our opinion the rate of interest and other terms and conditions of such loan arenot prima facie prejudicial to the interest of the company.

d) According to the information and explanations given to us in respect of such loanstaken by the Company, the same are at call and no stipulations have been made regardingpayment of principal and interest thereon.

iv. In our opinion and according to the information and explanations given to us, itappears that there is an adequate internal control system commensurate with the size ofthe Company and the nature of its business with regard to purchase of shares &securities, other assets and for the sale of shares & securities and services.Further, on the basis of our examination of the books and records of the Company, andaccording to the information and explanation given to us, we have neither come across norhave been informed of any continuing failure to correct major weakness in the aforesaidinternal control system.

v. According to the information and explanations given to us, during the year nocontracts or arrangements referred to in section 301 of the Act, have been entered by theCompany. Accordingly, Clause 4(v) (b) of the Order is not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us, theCompany has not accepted any deposit from public during the year, within the meaning ofSection 58-A and 58AA and other relevant provisions of the Companies Act, 1956 and rulesframed there under.

vii. The Company does not have an internal audit system. However, effective internalcontrols are being exercised by the management, which is broadly commensurate with thesize of the Company and nature of its business.

viii. According to the information and explanations given to us, the maintenance ofCost records has not been prescribed by the Central Government under Section 209 (1) (d)of the Companies Act, 1956.

ix. a) According to the records of the Company and information and explanations givento us, the Company has been regular in depositing undisputed statutory dues includingProvident Fund, Employees State Insurance, Income tax, Sales Tax, Wealth Tax, Custom Duty,Investor Education and Protection Fund, Excise Duty, Cess, Service Tax or any otherstatutory dues, wherever applicable, with the appropriate authorities and there were noarrears under the above heads which were due for more than six months from the date theybecame payable as at the close of the year.

b) According to the information and explanations given to us, there are no dues ofIncome Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Sales Tax and Cess and anyother statutory dues which have not been deposited on account of any dispute.

x. The Company has accumulated losses at the end of the financial year. The Company hasincurred cash losses in the current financial year as well as in the immediately precedingfinancial year.

xi. Based on our examination of record and information and explanations given to us thecompany has not taken loan from financial institutions or banks or debenture holdersduring the year.

xii. Based on our examination of record and information and explanations given to usthe company has not granted any loans or advances on the basis of security by way ofpledge of shares, debentures or other securities.

xiii. The provisions of any Special Statute applicable to Chit Fund, Nidhi or MutualBenefit Fund/ Societies are not applicable to the Company.

xiv. The Company has maintained proper records of transactions and contracts in respectof investments in shares, securities debentures and other investments and those timelyentries have been made therein. The shares, securities debentures and other investmentshave been held by the Company in its own name except to the extent of the exemptiongranted under section 49(4) of the Companies Act, 1956.

xv. According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others from banks and financial institutions.

xvi. The Company has not taken any terms loans during the year.

xvii. In our opinion and according to the information and explanation given to us, andon an overall examination of the Balance Sheet and Cash Flow of the Company, fund raisedon short-term basis have, prime facie, not been used for long term investment.

xviii. According to the information and explanation given to us, during the year, theCompany has not made any preferential allotment of shares to parties and companies coveredin the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanation given to us, during the year, theCompany has not issued any Debentures and hence no securities or charges are required tobe created in respect thereof.

xx. The Company has not raised any money by way of public issues during the periodcovered under the audit report.

xxi. During the course of our examination of books of account, carried out inaccordance with generally accepted auditing practices in India, and according to theexaminations given to us, we neither come across any incidence of any material fraud, onor by the Company, noticed or reported during the year, nor have been informed of any suchcase by the Management.