1.  We have audited the attached Balance Sheet of MONEY MATTERS
 FINANCIAL SERVICES LIMITED as at 31st March, 2012, the Statement of
 Profit and Loss and also Cash Flows Statement for the year ended on
 that date annexed thereto. 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.
 
 2.  We 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 amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall presentation of
 the financial statements. We believe that our audit provides a
 reasonable basis for our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report Amendment) Order, 2004
 issued by the Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the
 aforesaid Order.
 
 4.  Further to our comments in the Annexure referred to in Paragraph 3
 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 purposes of our
 audit;
 
 ii) In our opinion, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 iii) The Balance Sheet, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 iv) In our opinion, the Balance Sheet and the Statement of Profit and
 Loss dealt with by this report comply with the accounting standards
 referred to in sub-section (3C) of section 21 1 of the Companies Act,
 1956;
 
 v) On the basis of written representations received from the directors,
 as on 31 st March, 201 2 and taken on record by the Board of Directors,
 we report that none of the directors are disqualified as on 31st March,
 2012 from being appointed as a director in terms of clause (g) of
 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 aforesaid accounts read together with
 Significant Accounting Policies and other Notes on accounts give the
 information required by the Companies Act, 1 956, 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 the Statement of Profit and Loss, of the Profit for
 the year ended on that date;
 
 (c) in case of the Cash Flow Statement, of the Cash flows for the year
 ended on that date.
 
 Annexure to the Auditors Report
 
 Referred to in Paragraph 3 of our report of even date
 
 (i) (a) The Company has maintained proper records
 
 showing full particulars including quantitative details and situation
 of fixed assets.
 
 (b) As explained to us, the Company has a system of verifying all its
 major fixed assets over a period of three years which is, in our
 opinion, reasonable having regard to the size of the Company and the
 nature of its assets. In accordance with this programme, certain fixed
 assets have been physically verified by the management during the year.
 The discrepancies noticed on such verification were not material and
 have been properly dealt with in the books of accounts.
 
 (c) During the year, the Company has not disposed off any substantial
 /major part of fixed assets so as to affect the going concern status of
 the Company.
 
 (ii) (a) As per the information and explanation given to us by the
 management, the inventories of the Company mainly consists of Shares &
 Securities maintained in electronic (dematerialization) mode and hence
 no physical verification of inventories of the Company is required. In
 our opinion, sub- clause (ii)(a) and (ii)(b) of Paragraph 4 of the
 Order are not applicable to the Company.
 
 (b) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. No discrepancies have been noticed on verification between
 the stocks as per dematerialization mode and the book records.
 
 (iii) (a) The Company has granted interest free unsecured loan and
 advances in the nature of loan to five wholly owned subsidiary parties
 covered in the register maintained under section 301 of the Companies
 Act, 1 956. The maximum amount involved together with balance due at
 the end of the previous year was Rs 9064.51 lacs and the year end
 balance was Rs 1829.54 lacs.
 
 (b) In our opinion and according to the information and explanations
 given to us the other terms and conditions of the loans given by the
 Company are not prima facie prejudicial to the interest of the Company.
 
 (c) The principal amounts are repayable on demand and there is no
 repayment schedule.
 
 (d) In respect of the said loans, the same are repayable on demand and
 therefore the question of overdue amounts does not arise.
 
 (e) The Company has not taken loans, secured or unsecured from
 Companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1 956 and hence provisions of
 paragraph 4(iii)(f) to 4(iii)(g) of the aforesaid Order are not
 applicable to the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of inventory and fixed assets and for sale of services. During
 the course of our audit, we have not observed any major weakness in
 such internal controls.
 
 (v) Based on the audit procedures applied by us, and to the best of our
 knowledge and belief and according to the information and explanations
 given to us by the management, we are of the opinion that during the
 year no contracts or arrangements referred to in Section 301 of the
 Companies Act, 1956, have been entered into by the Company. Accordingly
 requirement of clause (v)(a) & (v)(b) of Paragraph 4 of the Order are
 not applicable to the Company.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted deposits from the public to
 which provisions of Sections 58A and 58AA or any other relevant
 provisions of the Companies Act, 1956 and the Companies (Acceptance of
 Deposits) Rules, 1975 are applicable.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by a firm of independent Chartered Accountants appointed by
 the Management has been commensurate with the size of the Company and
 nature of its business.
 
 (viii) As per the information and explanations given to us by the
 management, maintenance of cost records under Section 209(1 )(d) of the
 Companies Act, 1956 has not been prescribed by the Company Law Board
 and hence in our opinion the requirement of clause (viii) of Paragraph
 4 of the Order is not applicable to the Company.
 
 (ix) (a) According to the information and explanations given to us by
 the management and according to the records of the Company, the Company
 is generally regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 protection fund, employees'' state insurance, income-tax, service tax,
 wealth tax, and other applicable statutory dues.
 
 (b) According to the information and explanations given to us, no
 undisputed arrears of above statutory dues were outstanding, as at 31st
 March 2012, for a period of more than six months from the date they
 became payable.
 
 (x) The Company does not have accumulated losses at the end of the
 financial year and the Company has not incurred any cash losses during
 the current financial year and in the immediately preceding financial
 year.
 
 (xi) According to the information and explanations given to us, the
 Company has not defaulted in repayment of its dues to banks.
 
 (xii) Based on our examination of documents and records and according
 to the explanations given to us by the management we are of the opinion
 that the Company has maintained adequate documents and records in cases
 where it has granted loans and advances on the basis of security by way
 of pledge of shares, debentures and other securities.
 
 (xiii) As per the information and explanations given to us by the
 management, the Company is not a Chit Fund or a Nidhi Company. Hence in
 our opinion, the provisions of any special statute as specified under
 Clause (xiii) of Paragraph 4 of the Order are not applicable to the
 Company.
 
 (xiv) As per the information and explanations given to us by the
 management and based on our examination of the records and evaluation
 of the related internal controls, we are of the opinion that proper
 records have been maintained of the transactions and contracts in
 respect of dealing or trading in shares, securities, debentures and
 other investments and timely entries have been made therein. We also
 report that the Company has held all the shares, securities, and other
 investments in its own name except to the extent of exemption under
 section 49 of the Companies Act, 1956.
 
 (xv) The Company has not given any guarantee for loans taken by others
 from Bank or financial institution, and accordingly requirement of
 Paragraph 4(xv) of the aforesaid Order are not applicable to the
 Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us by the management, the Company has not availed of any term
 loan during the year.
 
 (xvii) According to the Cash Flow Statement and the Balance Sheet, and
 according to the information and explanations given to us and on an
 overall examination of the Balance sheet of the Company, we are of the
 opinion that no funds raised on short term basis have, prima-facie,
 been used for long term investments. No long-term funds have been used
 to finance short-term assets except permanent working capital.
 
 (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 Companies Act, 1 956 and therefore, in our opinion
 clause (xviii) of Paragraph 4 of the Order is not applicable.
 
 (xix) During the period covered by our audit report, the Company has
 not issued debentures and therefore clause (xix) of Paragraph 4 of the
 Order is not applicable.
 
 (xx) During the period covered by our audit report, the Company has not
 raised money by way of public issues except by conversion of warrants
 into equity shares as per terms and conditions of warrants issued in
 the earlier year.
 
 (xxi) Based upon the audit procedures performed and as per information
 and explanations given to us by the management, we report that no fraud
 on or by the Company has been noticed or reported during the year.
 
                                                 For and on behalf of 
 
                                                        KARNAVAT & CO.  
 
                                                Chartered Accountants 
 
                                               Firm Regn.  No 104863W
 
                                                   (Shashikant Gupta)
 
                                                             Partner
 
                                               Membership No. 045629
 
 Place : Srinagar 
 
 Dated : 19th May 2012.