Kumbhat Financial Services Ltd

TO THE MEMBERS OF KUMBHAT FINANCIAL SERVICES LIMITED, CHENNAI

We have audited the attached Balance Sheet of KUMBHAT FINANCIAL SERVICES LIMITED,CHENNAI as at 31st March. 2012 the Profit and Loss Account and the cash flow statementfor the year ended on that date. These financial statements are the responsibility of theCompany's Management Our responsibility is to express an opinion on these financialstatements based on our audit

1 We conducted our audit in accordance with the auditing standards generally acceptedin India These standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from any material misstatementsAn audit includes, examining on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes, assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall presentation of the financial statements. We believe that our audit provides areasonable basis for our opinion.

2 As required by the Companies (Auditor's Report), Order 2003 issued by the CentralGovernment in terms of Section 227(4A) of the Companies Act, 1956, we enclose in theannexure a statement on the matters specified in paragraphs 4 & 5 of the said order

3. Further as required by the Non-Banking Financial Companies Auditor's Report (ReserveBank) Directions, 1998, vide Notification No. DFC. 114/DG(SPT)-98 dated January 2nd 1998,we enclose in the Annexure a statement on the matters specified in paragraphs 3 of thesaid notification

4. Further to our comments in the annexure referred to in paragraph ;11 above we reportthat

a) We have obtained all the information and explanations which to the best to ourknowledge 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 thecompany so far as appears from our examination of such books.

c ) The Balance Sheet, Profit and Loss Account and cash flow statement are in agreementwith the books of accounts

d) In our opinion, the the Balance Sheet. Profit and Loss Account and Cash flowstatement comply with the Accounting Standards referred to in sub section (3C) of Section211 of the Companies Act, 1956

e) On the basis of the information and explanations given to us and representationsobtained by the company there are no directors of the company who, as at 31^stMarch 2012. are disqualified under section 274(1)(g) of the Companies Act,1956. from beingappointed as Directors.

f) In our opinion and to the best of our information and according to the explanationsgiven to us. the said account read along with the notes thereon give the informationrequired by the Companies Act, 1956 in the manners required and also give a true and fairview in conformity with the accounting principles generally accepted in India

i) In so far as it relates to the Balance Sheet of the state of affairs of the Companyas at 31st March. 2012 and

ii) In so far as it relates to the Profit and Loss Account of the Profit of the Companyfor the year ended on that date.

iii) In so far as it relates to the Cash flow statement, of the cash flow for the yearended on that date.

ANNEXURE REFERRED TO IN PARA '2' OF OUR REPORT OF EVEN DATE

1. The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets. All the assets have been physicallyverified by the management during the year which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No serious discrepancieswere noticed on such verification. None of the Fixed Assets were disposed off during theyear and therefore do not affect the going concern status of the Company.

2. The stock of Shares were physically verified by the management at the year-end. Asper the information given to us, the procedure of physical verification of stocks followedby the management is in our opinion reasonable and adequate in relation to the size of thecompany and nature of its business.

On the basis of our examination of stock records, it is found that the same have beenproperly maintained and as per the explanations given to us, no material discrepancieshave been noticed on physical verification as compared to book records.

3 In our opinion, the company has not taken / granted loans during the year from / toparties listed in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and in accordance with the information and explanations given to us,there are adequate internal control procedure commensurate with the size of the companyand nature of its business, for purchases of inventory and fixed assets and with regard tothe sale of goods.

5. In our opinion, and according to the information and explanations given to us, thereare no transactions for purchase / sale of goods, services made in purchase of contractsor arrangements required to be entered in the register maintained under section 301 of theregister, aggregating during the year to Rs 5,00,000/- or more in respect of each party.

6. In our opinion, and according to the information and explanations given to us, thecompany has not accepted any deposits from public.

7 In our opinion, the company does have an an internal audit system, the scope andcoverage of which needs to be strengthened to make it commensurate with the size andnature of its business.

8. The Company is not required to maintain any cost records as prescribed by theCentral Government under section 209(1)(d) of the Companies Act, 1956 as the same is notapplicable to the Company.

9. According to the explanations given to us. the provisions of the Employees ProvidentFund and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act. 1948 arenot applicable to the Company.

10. According to the information and explanations given to us, there are no undisputedamounts payable in respect of Sales Tax, Customs Duty and Excise Duty as at 31st March,2011, for a period of more than six months from the date they became payable. Further,according to the information and explanations give to us, there are no disputed statutorydues pending payment.

11 On the basis of the financial statements, the company does not have accumulated lossnor has it incurred cash loss during the year as well as in the immediately precedingfinancial year.

12: The Company has not issued any debentures. According to the records of the Companyexamined by us, the Company has not availed any term loan or working capital limits fromany bank of financial institution.

13 The Company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the Orderis not applicable

14. The Company is not a Chit Fund, Nidhi, Mutual Benefit Fund or a Society.Accordingly, clause 4(xiii) of the order is not applicable.

15. According to the information and the explanations given to us and based on therecords examined by us, the company is maintaining proper records in respect of the sharesdealt and the said investments (subject to note on investment) have been held by thecompany in its own name as per the provisions of the Section 49 of the Companies Act, 1956

16. On the basis of information and explanations given to us, the company has not givenguarantee to any Bank or Financial Institution on behalf of other parties.

17. The Company has not taken any term loans. Hence clause (xvi) of para'4(A) is notapplicable

18. On the basis of our examination of the books of account and the information andexplanation given to us, in our opinion, the funds raised on short term basis have notbeen used for long term investment.

19. The Company has not made any preferential allotment of shares to any party listedin the register maintained under section 301 of the Companies Act, 1956 Hence clause4(xviii) of the Order is not applicable

20. The Company has not issued debentures. Hence, clause 4(xix) of the Order is notapplicable.

21. The Company has not raised any money by way of public issues during the year. Henceclause 4(xx) of the Order is not applicable.

22 According to the information and explanations given to us, no fraud on or by thecompany has been noticed or reported during the year.