Auditor Report of KMF Ltd.

Mar 31, 2012

I. We have audited the attached Balance Sheet of KMF Limited as at 31st March 2012 and the Profit & Loss account of the Company for the year ended on that date. 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.

ii. We have 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 amount and disclosures in the financial statement 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 for our opinion.

iii. As required by the Companies (Auditors report) Order, 2003 issued by the Central Government of India in terms of sub-section (4 A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

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

i. 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.

ii. In our opinion, proper books of Accounts as required by the Law have been kept by the company so far as appears from our examination of those books.

iii. The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of account.

iv. In our opinion the Balance Sheet, Profit & Loss Account dealt with by this return complies with the Accounting Standards referred in sub section (3 C) of Section 211 of the Companies Act, 1956.

v. 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 as on 31st March 2012 from being appointed as a director in terms of clause (g) of the Sub- Section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon, except our comment in Para 2 of the Annexure i.e, Notes on accounts, 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:-

(a)In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and

(b) In the case of Profit & Loss Account, of the Profit for the year ended on that date

vii. In terms of the "Non Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 2008 issued vide Notification No.DNBS.201/DG(VL)-2008 dated 18-09-2008, we are to state as under

i. The Company has not carried the business of Non-Banking Financial Institution and the certificate of Registration from Reserve Bank of India is under suspension.

Annexure to the Auditor's Report of even date on the accounts of KMF Limited for the year ended on 31st March 2012

(Refer to Paragraph 3 of our report of even date)

i. a. Company had maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Management had not verified the Fixed Assets during the year. In our opinion, the discrepancy, if any, noticed, on the comparison of physical Verification with Book records, needs to be treated adequately as and when physical verification is performed. The confirmation of Lease Assets disposed off during the year also couldn't be performed, in the absence of sufficient documentary records.

c. The Company had not disposed off substantial part of the Fixed assets during the Year.

ii. a. The Company had taken/given loan from its Director's & shareholders covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 3,65,000/-.

b. The Loans taken by the Company from the Parties covered under register maintained under section 301 of the Companies Act, 1956 are interest free and are not prima facie prejudicial to the interest of the Company.

c. The repayment of the Principal amount of loan are on call. Therefore, the Provision of Para 4(iii)(c) are not applicable to the Company.

d. There is no overdue amount of Loans taken from or granted to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

iii. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods.

iv. a. According to information and explanations given to us, we are of the opinion that the transactions that need to made entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us ,the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

v. In our opinion and according to the information and explanation given to us, the company had complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to prevailing market prices at the relevant time.

vi. In our opinion , the company doesn't have any internal audit system in operation commensurate with the size and nature of its business.

vii. We have broadly reviewed the books of accounts relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central government for the maintenance of cost records under section 209(a)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

viii. a. The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, TDS, FBI, sales tax, custom duty, excise duty, cess and any other statutory dues applicable to it, except minor delay.

b. According to the information and explanation given to us, Income Tax demand of Rs. 15,89,008/- is pending towards the Income Tax Department, against which an appeal is pending against the Company in court of law.

c. According to the information and explanation given to us , there are no dues of sales tax, custom duty, wealth tax, excise duty and cess which have not deposited on account of any dispute.

ix. The Accumulated Losses of the Company as at the end of year are more than the 50% of net worth of the Company.

x. Based on our audit procedures and on the information and explanations given to us by the management, we are of the opinion that the Company has defaulted in repayment of dues to financial Institutions, bank or debenture holders. It has been explained to us that the company is under the phase of negotiation with all the Lenders for settlement of their dues.

xi. In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

xii. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore , the. provisions of this clause of Companies (Auditor's report) order,2003 are not applicable to the Company.

xiii. Based on our audit procedures and on the information and explanations given to us by the management, the Company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's report) order, 2003 are not applicable to the Company.

xiv. Based on our audit procedures and on the information and explanations given to us by the Management, the Company has not given guarantee for loans taken by others from banks or financial Institutions.

xv. In our opinion, no fresh term loans had been taken by the company during the year.

xvi. Based on our audit procedures and on the information and explanations given to us by the Management, we report that no had been raised by the company for short term purposes.

xvii. In our opinion and according to information and explanation given to us, No allotment / Transfer of shares has been made during the year

xviii. No Public issue has been made by the Company during the financial year ended 31st March 2012

xix. We report that no fraud on or by the company has been noticed or reported during the course of our audit.

For G S S V & Associates Chartered Accountants

Sd/- Gurjit Anand M No : 93052 Partner

Date : 25th June 2012 Place : New Delhi

---

Mar 31, 2011

I. We have audited the attached Balance Sheet of KMF Limited as at 31 st March 2011 and the Profit & Loss account of the Company for the year ended on that date. 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.

ii. We have 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 amount and disclosures in the financial statement. 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 for our opinion.

iii. 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, and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

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

i. 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

ii. In our opinion , proper books of Accounts as required by the Law have been kept by the company so far as appears Iron our examination of those books.

iii. The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of account.

iv. In our opinion the Balance Sheet, Profit & Loss Account dealt with by this return complies with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act, 1956

v. 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 as on 31st March 2011 from being appointed as a director in terms of clause (g) of the Sub- Section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon, except our comment in Para 2 of the Annexure i.e, Notes on accounts, 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:-

[a] In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 and

[b] In the case of Profit & Loss Account, of the Profit for the year ended on that date

vii. In terms of the "Non Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 2008 issued vide Notification No.DNBS.201/DG(VL)-2008 dated 18-09-2008, we are to state as under :-

i. The Company has not carried the business of Non-Banking Financial Institution and the certificate of Registration from Reserve Bank of India is under suspension.

Annexure to the Auditor's Report of even date on the accounts of KMF Limited for the year ended on 31st March 2011

{Refer to Paragraph [3 of our report of even date}

i. a. Company had maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Management had not verified the Fixed Assets during the year. In our opinion, the discrepancy, if any , noticed , on the comparison of physical Verification with Book records, needs to be treated adequately as and when physical verification is performed. The confirmation of Lease Assets disposed off during the year also couldn't be performed, in the absence of sufficient documentary records.

c. The Company had not disposed off substantial part of the Fixed assets during the Year.

ii. a. The Company had taken/given loan from its Director's & shareholders covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.9,03,873/-.

b. The Loans taken by the Company from the Parties covered under register maintained under section 301 of the Companies Act, 1956 are interest free and are not prima facie prejudicial to the interest of the Company.

c. The repayment of the Principal amount of loan are on call. Therefore, the Provision of Para 4(iii)(c) are not applicable to the Company.

d. There is no overdue amount of Loans taken from or granted to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

iii, In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods.

iv, a. According to information and explanations given to us, we are of the opinion that the transactions that need to made entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us ,the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

v. In our opinion and according to the information and explanation given to us, the company had complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to prevailing market prices at the relevant time.

vi, In our opinion , the company doesn't have any internal audit system in operation commensurate with the size and nature of its business.

vii. We have broadly reviewed the books of accounts relating to materials, labor and other items of cost maintained by the company pursuant to the rules made by the Central government for the maintenance of cost records under section 209(a)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

viii. a. The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, TDS, FBT, sales tax, custom duty, excise duty, cess and any other statutory dues applicable to it. except minor delay.

b. According to the information and explanation given to us, Income Tax demand of Rs. 15,89,008/- is pending towards the Income Tax Department, against which an appeal is pending against the Company in court of law.

c. According to the information and explanation given to us , there are no dues of sales tax, custom duty, wealth tax, excise duty and cess which have not deposited on account of any dispute.

ix. The Accumulated Losses of the Company as at the end of year are more than the 50% of net worth of the Company. The Company has also incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

x. Based on our audit procedures and on the information and explanations given to us by the management, we are of the opinion that the Company has defaulted in repayment of dues to financial Institutions, bank or debenture holders. It has been explained to us that the company is under the phase of negotiation with all the Lenders for settlement of their dues.

xi. In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

xii. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provisions of this clause of Companies (Auditor's report) order, 2003 are not applicable to the Company.

xiii. Based on our audit procedures and on the information and explanations given to us by the management, the Company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's report) order, 2003 are not applicable to the Company.

xiv. Based on our audit procedures and on the information and explanations given to us by the Management, the Company has not given guarantee for loans taken by others from banks or financial Institutions.

xv. In our opinion, no fresh term loans had been taken by the company during the year.

xvi. Based on our audit procedures and on the information and explanations given to us by the Management, we report that no had been raised by the company for short term purposes.

xvii. In our opinion and according to information and explanation given to us, No allotment / Transfer of shares has been made during the year

xviii. No Public issue has been made by the Company during the financial year ended 31st March 2011

xix. We report that no fraud on or by the company has been noticed or reported during the course of our audit.

For G S S V & Associates

Chartered Accountants

Sd/-

Date: 25th july 2011 Gurjit Anand

Place: New Delhi Partner

---

Mar 31, 2010

I. We have audited the attached Balance Sheet of KMF Limited as at 31st March 2010 and the Profit & Loss account of the Company for the year ended on that date. 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.

ii. We have conducted our audit in accordance with auditing standards generally accepted in India standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of mate ail misstatement. An audit includes examining on a test basis, evidence supporting the amount arid disclosures in the financial statement. 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 for our opinion.

iii. As required by the Companies (Auditors report) 0rder.2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act. 1956, and on the basis of in such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

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

i. 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

ii. In our opinion, proper books of Accounts as required by the Law have been kept by the company so far as appears from our examination of those books.

iii. The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of a account.

iv. In our opinion the Balance Sheet, Profit & loss Account with by this return complies with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act, 1956

v. On the basis of written representations received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of the Sub- Section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us the said financial statements together with the notes thereon, except our comment in Para 2 of the Annexure i.e, Notes on accounts, 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:-

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2010 and

(b) In the case of Profit & Loss Account, of the Profit for the year ended on that date

vii. In the of the "Non Banking Financial Companies Auditor's Financial Companies Auditor's Report (Reserve Bank) Directions 2008 issued vide Notification No.DNBS.2Q1/DG(VL)-2008 dated 18-09-2008, we are to state as under.

i. The company has not carried the business of Non-Banking Financial Institution and the certificate of Registration from Reserve Bank of India is under suspension.

Annexure to the Auditor's Report of even date' on the accounts of KMF Limited for the year ended on 31st March 2010 (Refer to Paragraph (3 of our report of even date)

i a. Company had maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Management had not verified the Fixed Assets during the year. In our opinion, the discrepancy, if any , noticed , on the comparison of physical Verification with Book records, needs to be treated adequately as and when physical verification is performed. The confirmation of Lease Assets disposed off during the year also couldn't be performed, in the absence of sufficient documentary records.

c. The Company had not disposed off substantial part of the Fixed assets during the Year.

ii. a. The Company had taken/given loan from its Director's & shareholders covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.9,03,873/-.

b. The Loans taken by the Company from the Parties covered under register maintained under section 301 of the Companies Act, 1956 are interest free and are not prima facie prejudicial to the interest of the Company.

c. The repayment of the Principal amount of loan are on call. Therefore, the Provision of Para 4(iii)(c) are not applicable to the Company.

d. There is no overdue amount of Loans taken from or granted to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

iii. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with record to sale of goods.

iv. a. According to information and explanations given to us we are of the opinion that the transactions that need to made entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us ,the transactions made in pursuance of contracts or arrangements e entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

v. In our opinion and according to the information and explanation given to us, the company had complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to prevailing market prices at the relevant time.

v. In our opinion , the company doesn't have any internal Audi: system in operation commensurate with the size and nature of its business.

vii. We have broadly reviewed the books of accounts relating to materials, labor and other items of cost maintained by the company pursuant to the rules made by the Central government for the maintenance of cost records under section 209(a)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

viii a The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, TDS, FBT, sales tax, custom duty, excise duty, cuss and any other statutory dues applicable to it, except minor delay.

b. According to the information and explanation given to us, Income Tax demand of Rs 15.89,008/- is pending towards the Income Tax Department, against which an appeal is pending against the Company in court of law.

c. According to the information and explanation given to us . there are no dues of sales tax, custom duty, wealth tax, excise duty and cuss which have not deposited on account of any dispute.

ix. The Accumulated Losses of the Company as at the end of year are more than the 50% of net worth of the Company. The Company has also incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

x. Based on our audit procedures and on the information and explanations given to us by the management, we are of the opinion that the Company has defaulted in repayment of dues to financial Institutions, bank or debenture holders. It has been explained to us that the company is under the phase of negotiation with all the Lenders for settlement of their dues.

xi. In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

xii. The Company is not a chit fund or a nidhi /mute I benefit fund/society. Therefore , the provisions of this clause of Companies (Auditor's report) orde-,2 003 are not applicable to the Company.

xiii. Based on our audit procedures and on the information and explanations given to us by the management, the Company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's report) order, 2003 are not applicable to the Company.

xiv. Based on our audit procedures and on the information and explanations given to us by the Management , the Company has not given guarantee for loans taken by others from banks or financial Institutions.

xv. In our opinion, no fresh term loans had been taken by the company during the year.

xvi. Based on our audit procedures and on the information and explanations given to us by the Management, we report that no had been raised by the company for short term purposes.

xvii. In our opinion and according to information and explanation given to us, No allotment / Transfer of shares has been made during the year

xviii. No Public issue has been made by the Company during the financial year ended 31st March 2010

xix. We report that no fraud on or by the company has been noticed or reported during the course of our audit.

For G S S V & Associates

Chartered Accountants

Sd/-

Gurjit Anand

Date : 22nd July 2011 M No : 93052

Place : New Delhi Partner