1.  We have audited the attached Balance Sheet of M/s. Dhandapani
 Finance Limited as on March 31, 2011 (18 months period) and the related
 Profit And Loss Account and Cash Flow Statement for the period ended on
 that date annexed thereto which we have signed under reference to this
 report. These financial statements are the responsibility of the
 Companys Management. Our responsibility is to express an opinion on
 these financial statements based on our audit
 
 2.  We conducted our audit in accordance with the 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 amounts
 and disclosures in the financial statements. 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
 
 3.  Attention of the shareholders is invited to the following:
 
 a.  The Companys net owned funds is below Rs. 25 lakhs, the limit
 prescribed by Reserve Bank of India under section 45 - IA of the
 Reserve Bank of India Act, 1934. This could attract penal provisions
 under section 45 - MC of the Act.
 
 b.  The shareholders of Dhandapani Finance Limited has not accepted the
 re-appointment and increase in remuneration of the Managing Director
 for which, the company is taking appropriate action (Refer Note 10(A)
 of Schedule 18).
 
 4.  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 of the Company as we considered appropriate
 and according to the information and explanations given to us, we give
 in the Annexure, a statement on the matters specified in paragraph 4
 and 5 of the said Order.
 
 5.  Further to our comments in the Annexure referred to in paragraph 4
 above, we report that:
 
 a.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 b.  In our opinion, the company has maintained proper books of account
 as required by law have been kept by the Company so far as appears from
 our examination of those books:
 
 c.  The balance Sheet and Profit and Loss Account dealt with by this
 are in agreement with the books of account:
 
 d.  In our opinion, the Balance Sheet. Profit and loss Account dealt
 with by this report complies with the accounting standards referred to
 in sub-section (3C) of section 2)1 of the Companies Act, 1956 except as
 mentioned in paragraph 5
 
 e.  We have received written representation from the directors, and
 taken on record by the Board of Directors, we report that none of the
 directors is disqualified as on March 31, 2011 from being appointed as
 a director in terms of clause (g) of Sub-section (I) of section 274 of
 the Act.
 
 / The debit balances under receivables and debtors accounts and the
 credit balances are as per books of accounts subject to confirmation
 from the parties.
 
 g. The company has made a donation of Rs.l lakh to Shree Mahalaxmi
 Temple Mumbai. This is beyond the powers of the Board without obtaining
 the prior approval of the Shareholders as specified Section 293(l)(e)
 of the Companies Act 1956 of Rs.0.5 lakhs.
 
 Subject to the matters specified in the paragraphs f and g above, 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 given in the prescribed manner, the information
 required by the Act, give a true and fair view in conformity with the
 accounting principles generally accepted in India;
 
 i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31,2011;
 
 ii) In the case of Profit and Loss Account, of the loss for the year
 ended on that date;
 
 iii) In the case of Cash Flow Statements, the cash flow for the year
 ended on that date.
 
 (Referred to in paragraph 4 of our report of even date to the members
 of M/s. Dhandapani Finance Ltd.)
 
 (i) (a) The company has maintained proper records to show full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) As per the information and explanation given to us by the
 management fixed assets according to the practice of the company are
 physically verified by the management at reasonable intervals, which,
 in our opinion, is reasonable, looking at the size of the company and
 nature of the business. No material discrepancies were noticed on such
 verification.
 
 (c) The Company has not disposed of a substantial part of fixed assets.
 
 (ii) As the Company is a Non Banking Finance Company, the provisions of
 sub clause (ii) a, b and c of
 
 the Companies (Auditors Report) Order, 2003 are not applicable.  (iii)
 (a) According to the information and explanations given to us the
 company has not granted loans,
 
 secured or unsecured to companies, firms, or other parties covered in
 the register maintained
 
 under section 301 of the Companies Act.
 
 (b) The rate of interest and other terms and conditions of the loan are
 prima facie, not prejudicial to the interest of the company.
 
 (c) The above loans do not have any stipulation for payment of any
 principal and interest and hence no amount of outstanding as at 30th
 September 2009 is considered as overdue.
 
 (d) As the company has not granted any loan, the provisions contained
 in clause (iii) (d) are not applicable.
 
 (e) According to the information and explanations given to us the
 company has taken unsecured loans from group companies, covered in the
 register maintained under Section 301 of the Companies Act, 1956. The
 year-end balance of loans taken from such parties was Rs 102.28 lakhs
 
 (0 The rate of interest and other terms and conditions of loans taken
 by the company, secured or unsecured, are prima facie not prejudicial
 to the interest of the company
 
 (g) The payment of the principal amount and interest are also regular.
 (iv) In our opinion, there are adequate internal control procedures
 commensurate with the size of the
 
 tpcompany and the nature of its business for purchase of fixed assets
 and sale of goods and services
 
 during the course of our audit; we have not observed any continuing
 failure to correct major weakness
 
 in such internal control system.  (v) (a) The contracts and
 arrangements referred to in section 301 of the Act have been entered in
 the register required to be maintained under that section.
 
 (b) The transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.  (vi)
 During the year Company has not accepted any deposits from the public.
 However, in the case of
 
 deposits accepted by the Company from the public in the earlier years,
 in our opinion and according
 
 to the information and explanations given to us, the directives issued
 by Reserve Bank of India and
 
 the provisions of sections 58A and of the Companies Act and the rules
 framed there under, wherever
 
 applicable to the Company have been complied with.
 
 (vii) In our opinion, the companys present internal audit system is
 commensurate with its size and nature of its business.
 
 (viii) The Central Government has not prescribed maintenance of cost
 records under Section 209 (l)(d) of the Act.   .
 
 (ix) (a) The company has been regular in depositing undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Customs Duty. Excise Duty, Cess and other statutory dues
 with the appropriate authorities in India except service tax of Rs.
 8.90 lacs (for the financial year 2001 -02 to 2005- 06)
 
 (b) According to the information and explanations given to us and
 records of the Company examined by us the particulars of dues of Sales
 Tax, Income Tax, Wealth Tax, and Excise Duty, which have not been
 deposited on account of any dispute are as follows
 
 Asst. year   Tax Due 
              Amount of 
              Rs. in lakhs  Classification of 
                            Dispute                Remarks
 
 Interest Tax 
 Act 1995-96 
 to 1999-2000 16.37         Tax and Interest       Appeal
                                                   before CIT(A)
 
 Income Tax 
 Assessment 
 Year 1998-99 14.54         Interest               Chief Commissioner 
                                                   of Income Tax
 
 Assessment 
 Year 2001-02 196.90        Interest ¦             Chief Commissioner 
                                                   of Income Tax
 
 Assessment 
 Year 2005-06 3.79          Interest               Chief Commissioner 
                                                   of Income Tax
 
 (x) The accumulated losses of the company at the end of the financial
 year are not less than fifty percent of its net worth. The company has
 incurred cash losses in the financial year and in the immediately
 preceding financial year also.
 
 (xi) According to the records produced, the company has not defaulted
 in repayment of dues to any financial institution or bank during the
 year.
 
 (xii) The company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The provisions of any special statute applicable to chit fund /
 Nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 (xv) As per the information and explanations given to us the company
 has not given any guarantees for loans taken by others.
 
 (xvi) On the basis of review of utilization of funds on an overall
 basis, in our opinion, the term loans taken by company were applied for
 the purposes for which the loans were obtained.
 
 (xvii) On the basis of review of utilization of funds on an overall
 basis in our opinion, the funds raised on short-term basis have not
 been used for long-term investment or vice versa during the year.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties and companies covered in the Register maintained under
 section 301 of the Act.
 
 (xix) The company has issued no Debentures.
 
 (xx) The company has not raised any money by public issues during the
 year.
 
 (xxi) During the course of our examination of the books of accounts
 carried out in accordance with the generally accepted auditing
 practices in India, we have not come across any instance of fraud on or
 by the company nor have we been informed by the management of any such
 instance being noticed or reported during the year.
 
                                       For P B VIJAYARAGHAVAN & CO.,
 
                                       Firm Regn. No. 00472IS 
                                       Chartered Accountants 
 Place: Chennai                        P R KR1SHNAMURTHY
 
 Date: 28.05.2011                      Partner
 
                                       Membership Number: 12622