P. H. Capital Ltd

To,

The Members,

P.H.CAPITAL LIMITED

We have audited the attached Balance Sheet of P.H.CAPITAL LIMITED, Mumbai as at31^st March, 2011 and the Profit and Loss Account and also the Cash FlowStatement for the period ended on that date annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is to expressan opinion on the financial statements based on our audit.

1. 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 Financial Statements. An audit also includes assessing the accounting principles usedand significant estimates made by the management, as well as evaluating the overallFinancial Statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

2. As required by the Companies (Auditor’s Report) Order 2003 issued by theCentral Government of India in terms of Sub-section (4A) of section 227 of the CompaniesAct, 1956, we enclose in Annexure hereto a Statement on the matters specified in paragraph4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we reportthat:

(a) We have obtained all the information and explanation which to the best of ourknowledge and belief were necessary for the purposes 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 those books;

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

(d) In our opinion, Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report comply with the mandatory Accounting Standard referred to insub-section (3C) of Section 211 of the Companies Act, 1956.

(e) In our opinion, and to the best of our information and explanations given to usnone of the directors are disqualified as on 31^st March, 2011 from beingappointed as directors in terms of clause (g) of sub-section (1) of Section 274 of theCompanies 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 thereon give the information required by the Companies Act, 1956, in themanner so required, and present a true and fair view, in conformity with the accountingprinciples generally accepted in India :

(i) In so far as it relates to Balance Sheet, of the state of affairs of the Company asat 31^st March, 2011;

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

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

ANNEXURE TO AUDITORS’ REPORT

(Referred to in Paragraph 2 of our report of even date)

1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physically verified by the managementduring the year in a phased periodical manner, which in our opinion is reasonable, havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c) In our opinion, the Company has not disposed of substantial part of fixed assetsduring the year and asset sold do not effect its going concern.

2. The Inventories of the company comprises of shares and securities and accordinglythe clause for physical verification is not applicable.

3. In respect of loans, secured or unsecured taken or granted by the Company from/tocompanies, firms or other parties covered in the register maintained under Section 301 ofthe Companies Act, 1956 :

a. The Company has taken loans from 2 (Two) (P.Y. Three) parties covered in theregister maintained U/s. 301 of the Companies Act, 1956 aggregating to Rs. 753.15 lacs(P.Y. Rs. 446.12 lacs) during the year and year End balance is Rs. 68.55 lacs (PreviousYear 201.34 lacs).

The Company has not granted any loans to parties covered in the register maintained U/s301 of the companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, therate of interest, wherever applicable and other Terms and Conditions are not prima facieprejudicial to the interest of the Company.

c. There is no overdue amount in respect of loans given/ taken by the Company and assame is repayable on demand.

4. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business for the purchase of inventory, fixed assets and also for the saleof goods. During the course of our audit, we have not observed any major weaknesses ininternal controls.

5. a) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements, that needed to be enteredinto in the register maintained under Section 301 of the Companies Act, 1956 have been soentered.

b) In our opinion and according to the information and explanations given to us, thetransactions in pursuance of contracts or arrangements entered in the register maintainedunder Section 301 of the Companies Act, 1956 and exceeding Rs. 5,00,000/- (Rupees FiveLakhs only) in respect of any party during the year have been made at price, which arereasonable having regard to prevailing market price at the relevant time.

6. As explain to us the Company has not accepted any deposits from the public withinthe meaning of Section 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.

7. In our opinion, the internal audit system of the Company is commensurate with itssize and nature of its business.

8. The company is not required to maintain cost record U/s. 209(1)(d) of the CompaniesAct, 1956.

9. a) According to the information and explanation given to us, and records being madeavailable to us, the undisputed statutory dues including, Income-tax, Sales Tax,Wealth Tax, and other statutory dues wherever applicable have been generally regularlydeposited with the appropriate authorities. According to the information and explanationsgiven to us, no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at 31^st March, 2011 for a period of more than six months fromthe date of becoming payable.

b) In our opinion and according to the information and explanations given to us,following are the disputed statutory dues pending before any Authority.

10. The Company has accumulated losses of Rs. 250.53 lacs at the end of the financialyear which is more than the 50% of its Net worth. It has not incurred any cash loss duringthe year nor in the immediately preceding previous year.

11. Based on our audit procedures and according to the information and explanationgiven to us, we are of the opinion that the Company has not defaulted in repayment of duesto banks.

12. In our opinion and according to the information and explanation given to us, noloans and advances have been granted by the company on the basis of security by way ofpledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund /society. Therefore, clause 4(xiii) of the Companies (Auditor’s Report) Order 2003 isnot applicable to the Company.

14. The Company has maintained proper records of transaction and contracts in respectof trading in securities, debentures and other investments and timely entries have beenmade therein. All shares, debentures and other investments have been held by the companyin its own name.

15. According to information and explanation given to us and to the best of knowledge,the Company has not given guarantees for loans taken by others from banks or financialinstitutions.

16. In our opinion and according to information and explanation given to us, a companyhas not received any Term Loan during the year.

17. According to the information and explanation given to us, and on an overallexamination of the Balance Sheet of the Company, we are of the opinion that the Companyhas not raised funds from Short Term sources and utilized the same towards Long Terminvestments.

18. During the year, the Company had not made any preferential allotment of shares toparties and companies covered in the register maintained U/s. 301 of the Companies Act,1956.

19. According to information and explanation given to us, the Company has not issuedany secured debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanation given to us, nofraud on or by the Company has been noticed or reported during the year that causes thefinancial statements to be materially misstated.