Auditor Report of CFL Capital Financial Services Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of CFL Capital Financial Services Limited ('the Company'), (CIN: L67120WB1983PLC036805) which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the Audit Report,

5. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors as well as evaluating the overall presentation of the Financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements..

Basis for Qualified Opinion

8. Attention is drawn to :-

a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 16(11))

b. The company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 16(11))

The Company is not in a position to carry on business of Non Banking Financial ervices

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except to the possible effects of the matter described in the Basis for qualified Opinion paragraph the financial statements give the information required by the Act 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 March 31, 2015.

(b) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of matter

10 i) Note 1.A, 1.B and 1.C in the Financial statements indicate that the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net cash loss during the current and previous years and, the Company's current liabilities exceeded the current assets as at the Balance sheet date. These conditions, along with the other matters set forth in the above note, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as going concern. However financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note, ii) Loans from Banks and UTI and interest charged thereon have been provided as per the claims before / orders passed by the Debt Recovery Tribunals (see notes 6.4, 6.5 6.6 and 6.8)

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by The Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as 'Order'), and on the basis of such checks of the books and records of the Company as we consider appropriate and according to the information and explanations given to us, we give in the Annexure a statement in the matters specified in paragraphs 3 and 4 of the Order

12. As required by Section 143(3) of the Act, 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 purpose of our audit;

b. In our opinion, 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014

e. On the basis of written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the Directors is disqualified from being appointed as director (in terms of Section 164(2) of the Act,

f. With respect to the matters to be included in the Auditor's report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us :

1. The Company has disclosed the impact of pending litigations as on 31st March, 2015 on its financial position in the financial statements

2. The Company has made provision as at 31st March 2015 as required under the applicable law or accounting standards for material foreseeable losses, if any, on long term contracts including derivative contracts,

3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015.

Annexure to the Independent Auditors' Report

(referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

The annexure referred to in the Independent Auditors' Report to the members of CFL Capital Financial Services Limited (the Company) for the year ended March 31,2015. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2. The Stock of Shares and Securities of the Company has been physically verified by the Management during the year and no discrepancies were noticed between physical and book stock

3. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 189 of the Act.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control system.

5. In our opinion, and according to the information and explanations given to us the Company has neither accepted or renewed any deposits from the public within the meaning of Section 73 and 74 of the Act and Rules framed there under to the extent notified during the year. However, in our opinion and according to the information and explanations given to us, the Company had accepted deposits in earlier years by complying the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules there under and also the directives of the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act 1956. The Company Law Board had permitted the Company to repay the depositors in installments by 31ot December, 2012.The Company has repaid in full to depositors who had claimed the same. (Refer note 6.7)

6. According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government are not applicable in respect of services carried out by the Company.

7. a. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income- tax, sales tax, wealth tax, service tax value added tax, duty of customs, duty of excise and any other material statutory dues, as applicable, with the appropriate authorities .

b. According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1.

c. The amount required to be transferred to the Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act 1956 and the rules made there under

8. The Company has accumulated losses of Rs. 85,183.83 lakhs at the end of the financial year and has incurred cash losses in the financial year and in the immediately preceding financial year.

9. On the basis of the books and records examined by us and the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks as per details given below - Annexure II.

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. The Company was registered as Non Banking Finance Company with the Reserve bank of India but the same stands cancelled with effect from May 18,2004. (Refer Note 1-C)

12. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Company's present or former name.

13. According to the information and explanations given to us, on an overall basis, the term loans taken in previous years have been applied for the purpose they were obtained

14. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither across any instance of material fraud on or by the Company, noticed or reported during the year, not have been informed of any such case by the Management.

Annexure to Auditors' Report for year ended 31st March 2015

Particulars of disputed statutory liability not paid to the authorities

Annex -1

Name of Nature of dues Amount in Period Forum where the the Statute lakhs to which dispute is pending Amount relates

Sales Tax Jurisdiction of 121.14 1996-97 to Orissa Sales Tax Assessing office 1998-99 Tribunal and Lease Tax Lease Tax 0.15 1999-2000 Commissioner of Sales Tax, Bhubhaneshwar Sales Tax 1.31 1996-97 Commercial Tax Dept. Lucknow

Bombay Stamp Duty 43.80 Superintendent of Stamp Act, Stamps 1959

Annex- II Annexure to Auditors' Report for year ended 31 -Mar-2015

(Rs. in Lakhs)

Name of Bank / Financial Institution/ Default Interest as Total Mutual Fund Principal as per appeal / per Lender Order

ICICI Bank Ltd. (formerly Bank of 852.06 4,235.15 5,087.22 Rajasthan Ltd.)

Catholic Syrian Bank Ltd. 646.23 650.87 1,297.10

Dena Bank 1,926.38 6,123.36 8,049.74

Federal Bank Ltd. 780.64 2,766.61 3,547.26

Indusind Bank Ltd. 1,349.75 3,722.18 5,071.93

Oriental Bank of Commerce 447.18 2,598.00 3,045.19

Kotak Bank Ltd. (formerly State 793.85 1,479.43 2,273.28 Bank of Travancore)

Asset Reconstruction Co. (I) Ltd. 840.21 2,853.27 3,693.48 (formerlySouth Indian Bank Ltd.)

Vijaya Bank 1,215.26 1,997.93 3,213.19

Axis Bank Ltd. 700.72 659.66 1,360.38

9,552.30 27,086.47 36,638.77

UTI Asset Management Co Ltd. 248.62 2,151.55 2,400.18

Administrator of the Specified 432.60 3,743.05 4,175.65 Undertaking of UTI

681.23 5,894.60 6,575.83

The principal amount Is as claimed by the lenders in their applications before the appellate authorities. Interest is calculated at the rates demanded by them or as per the orders passed by the Appellate Authorities.



For Tarmaster & Co.,

Chartered Accountants

(Firm Registration No 302016E)

A K Chakrabarti

Partner Membership No. 015374

Kolkata

Date :27th May, 2015

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of CFL Capital Financial Services Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion Attention is drawn to :-

a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 26)

b. The company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 26)

The Company is not in a position to carry on business of Non Banking Financial Services

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except to the possible effects of the matter described in the Basis for qualified Opinion paragraph the financial statements give the information required by the Act 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 March 31, 2013.

(b) In the case of the statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of matter

i) The net worth of the Company is negative. The Company''s Management has drawn a plan to liquidate some assets, to borrow money including from promoter shareholders etc for meeting its expenses and liabilities. On the basis of the above plan the Company may be in a position to continue as a going concern. (Refer notes 1-B & 1.C of Note1)

ii) Loans from Banks and UTI and interest charged thereon have been provided as per the claims before / orders passed by the Debt Recovery Tribunals (see notes 6.4, 6.5 6.6 and 6.8) Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 purpose of our audit;

b. In our opinion, 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C) of the Act.

e. On the basis of the written representations received from the directors as on March 31, 2013, taken on record by the Board of Directors, we report that all the Directors are disqualified from being appointed as a director of another public company in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

Annexure to the Independent Auditors'' Report

(referred to in Paragraph 1 under the heading of "Report on Other Legal and

Regulatory Requirements" of our report of even date)

The annexure referred to in the Independent Auditors'' Report to the members of CFL Capital Financial Services Limited (the Company) for the year ended March 31, 2013. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2. The Stock of Shares and Securities of the Company has been physically verified by the Management during the year and no discrepancies were noticed between physical and book stock

3. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control procedures.

5. In our opinion, and according to the information and explanations given to us, there are no transactions during the year that need to be entered in the register in pursuance of section 301 of the Act..

6. In our opinion and according to the information and explanations given to us,

(a) the Company has neither accepted nor renewed any deposits during the year, (b) it had accepted deposits in earlier years by complying the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules there under and also the directives of the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act 1956. The Company Law Board had permitted the Company to repay the depositors in installments by 31st December, 2012.The Company has repaid in full to depositors who had claimed the same. (Refer note 6 in Note -9)

7. On the basis of the Internal Audit Reports broadly reviewed by us we are of the opinion that, the coverage of internal audit functions carried out by the Management, is commensurate with its size and the nature of its business.

8. According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government are not applicable in respect of services carried out by the Company.

9. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, income- tax, sales tax, employees state insurance, customs duty, Investor Education and Protection fund, wealth tax, service and any other material statutory dues applicable to it.

10. According to the information and the explanations given to us, no undisputed dues payable in respect of income- tax, sales tax, wealth tax, service tax, customs duty and cess were outstanding at 31st March 2013 for a period of more than six months from the date they became payable.

11. According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1.

12. The Company has accumulated losses of Rs. 72,924.13 lakhs at the end of the financial year and has incurred cash losses in the financial year and in the immediately preceding financial year.

13. On the basis of the books and records examined by us and the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks as per details given below- Annexure II.

14. On the basis of the books and records examined by us, and 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, debentures and other securities.

15. The Company was registered as Non Banking Finance Company with the Reserve bank of India but the same stands cancelled with effect from May 18, 2004. (Refer Note B-2 of Note-9)

16. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Company''s present or former name.

17. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

18. According to the information and explanations given to us, on an overall basis, the term loans taken in previous years have been applied for the purpose they were obtained

19. On the basis of overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds have been raised by the Company during the year. However, the funds raised in earlier years for short term purpose have been used for long term purpose and it is not possible to determine the quantum of the same in this year.

20. The Company has not made any preferential allotment of the shares to the parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956 during the year.

21. The Company has created securities in respect of debentures outstanding at the year-end. (Refer note (iv) under Secured Loans in Schedule 3. The trustees have resigned.

22. The Company has not raised any money by public issue during the year.

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

Annexure to Auditors'' Report for year ended 31st March 2013

Particulars of disputed statutory liability not paid to the to the authorities

Annexure I

Name of Nature of dues Amount Period to Forum where the the Statute in lakhs which Amount dispute is pending relates

Sales Tax Jurisdiction of 121.14 1996-97 to Orissa Sales Tax Assessing office 1998-99 Tribunal and Lease Tax

Lease Tax 0.15 1999-2000 Commissioner of Sales Tax, Bhubhaneshwar

Sales Tax 1.31 1996-97 Commercial Tax Dept. Lucknow

Bombay Stamp Duty 43.80 2010 Superintendent of Stamp Act, Stamps 1959

Annexure II

Annexure to Auditors'' Report for year ended 31-Mar-2013

(Rs in Lakhs)

Default to Banks / FIs Default Default Total

Principal Interest Default as on 31.03.2013

Bank of Rajasthan Ltd(ICICI Bank Ltd) 551 3767 4318

Catholic Syrian Bank Ltd 387 844 1231

Dena Bank 1377 5775 7152

Federal Bank Ltd 290 2714 3004 IndusInd Bank Ltd 893 3613 4506

Oriental Bank of Commerce 448 2130 2578

South Indian Bank Ltd (ACRIL) 674 2544 3218

State Bank of Travancore (Kotak 826 1194 2020 Mahindra Bank Ltd)

Axis Bank Ltd 518 778 1296

Vijaya Bank 918 2115 3033

Total - Banks ** 6882 25474 32356

Financial Institution

UTI Asset Mgmt. Co Ltd 71 1851 1922 Administrator of Specified

Undertaking of Unit Trust of India 124 3221 3345

** Banks have realized certain assets amounting to Rs. 260 Lakhs which has not been adjusted in these amounts.

For Tarmaster & Co.,

Chartered Accountants

(Firm Registration No 302016E)



S. Saha

Partner

Membership No. 300639

Kolkata

Date : 30th May, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of CFL CAPITAL FINANCIAL SERVICES LIMITED, as at 31st March, 2012 and also the Profit and Loss Statement and Cash Flow 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. Except as discussed in paragraph 4, 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central 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 said Order.

4. Further, to our comments in the annexure referred to in paragraph 3 above.

i) The net worth of the Company is negative. The Company's Management has drawn a plan to liquidate some assets, to borrow money including from promoter shareholders etc for meeting its expenses an liabilities. On the basis of the above plan the Company may be in a position to continue as a going concern.

(Refer notes 1-B & 1.C of Note)

ii) Loans from Banks and UTI and interest charged thereon have been provided as per the claims before / orders passed by the Debt Recovery Tribunals (see notes 6.1, 6.7 and 12.1)

5. Attention is drawn to :-

a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 26)

b. The company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 26)

6) Subject to our foregoing observations in Para 4, and its consequential effects on Loss for the year and assets and liabilities as at 31st March, 2012, we further 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 law have been kept by the company so far as appears from our examination of the book except our observations under Para 5 above;

Hi) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with in this report are in agreement with books of account;

iv) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the requirements of Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v) On the basis of the written representations received from the Directors as on 31st March, 2012 and taken on records by the Board of Directors, we report that all the Directors are disqualified from being appointed as a director of another public company in terms of Clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

7) Subject to the effect of such adjustments, if any, as referred to in paragraph 5, as might have been determined to be necessary had we been able to satisfy ourselves, in our opinion and to the best of our. information and according to explanations given to us, the accounts, give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view :-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii) In case of the Profit and Loss Statement of the Company, Loss for the year ended on that date and

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

Annexure to the Auditors' Report

The annexure referred to in the Auditors' Report to the members of CFL Capital Financial Services Limited (the Company) for the year ended March 31, 201i2. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2. The Stock of Shares and Securities of the Company has been physically verified by the Management during the year and no discrepancies were noticed between physical and book stock

3. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control procedures.

5. In our opinion, and according to the information and explanations given to us, there are no transactions during the year that need to be entered in the register in pursuance of section 301 of the Act..

6. In our opinion and according to the information and explanations given to us, (a) the Company has neither accepted nor renewed any deposits during the year, (b) it had accepted deposits in earlier years by complying the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules thereunder and also the directives of the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act 1956. The Company Law Board has permitted the Company to repay the depositors in installments by 31st December, 2012. (Refer note B.3 in Note -9)

7. On the basis of the Internal Audit Reports broadly reviewed by us we are of the opinion that, the coverage of internal audit functions carried out by the Management, is commensurate with its size and the nature of its business.

8. According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government are not applicable in respect of services carried out by the Company.

9. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed, statutory dues including provident fund, income- tax, sales tax, employees state insurance, customs duty, Investor Education and Protection fund, wealth tax, service and any other material statutory dues applicable to it.

10. According to the information and the explanations given to us, no undisputed dues payable in respect of income- tax, sales tax, wealth tax, service tax, customs duty and cess were outstanding at 31st March 2012 for a period of more than six months from the date they became payable.

According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1.

11. The Company has accumulated losses of Rs. 67,999.24 lakhs at the end of the financial year arid has incurred cash losses in the financial year and in the immediately preceding financial year.

12. On the basis of the books and records examined, by us and the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks as per details given below-Annexure II.

13. On the basis of the books and records examined by us, and 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, debentures and other securities.

14. The Company was registered as Non Banking Finance Company with the Reserve Bank of India but the same stands cancelled with effect from May 18, - 2004. (Refer Note B-2 of Note-9)

15. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Company's present or former name.

16. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

17. According to the information and explanations given to us, on an overall basis, the term loans taken in previous years have been applied' for the purpose they were obtained

18. On the basis of overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds have been raised by the Company during the year. However, the funds raised in earlier years for short term purpose have been used for long term purpose and it is not possible to determine the quantum of the same in this year.

19. The Company has not made any preferential allotment of the shares to the parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956 during the year..

20. The Company has created securities in respect of debentures outstanding at the year-end. (Refer note (iv) under Secured Loans in Schedule 3. The trustees have resigned.

21. The Company has not raised any money by public issue during the year.

22. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. Annexure to Auditors' Report for year ended 31st March 2012

Particulars of disputed statutory liability not paid to the fo the authorities

Name of the Nature of. dues Amount in Period to which Amount Statute lakhs relates

Sales Tax Jurisdiction of 121.14 1996-97 to 1998-99 Assessing office and Lease Tax

Lease Tax 0.15 1999-2000

Sales Tax 1.31 1996-97

Sales Tax 3.70 1996-97

Bombay Stamp Act, Stamp Duty 43.80 2010 1959

Name of the Statue Forum where the dispute is pending

Sales Tax Orissa Sales Tax Tribunal Commissioner of Sales Tax, Bhubhaneshwar

Commercial Tax Dept. Lucknow

Dy. Commissioner of ST, Jaipur

Bombay Stamp Act, 1959 Superintendent of Stamps, Stamp Act

Annexure to Auditors' Report for year ended 31-Mar-2012

Annexure-II (Rs in Lakhs)

Default to Banks/FIs Default Principal Default Interest Total Default as on 31.3.2012

Bank of Rajasthan (ICICI Bank Limited) 870 2796 3666

Catholic Syrian Bank Ltd. 660 505 1165

Dena Bank; 1971 4384 6355

Federal Bank 797 1746 2543

Induslnd Bank, 1382 2622 4004

Oriental Bank of Commerce 462 1721 2183

South Indian Bank 864 1940 2804

State Bank of Travancore 821 973 1974

Axis Bank Ltd 718 513 1231

Vijaya Bank 1244 1608 2852

Total - Banks 9789 18808 28597

Financial Institution / Others

UTI Asset Management Co. Ltd. 71 1466 1537

Administration of Specified Undertaking of Unit Trust of 124 2550 2674 India

For Tarmaster & Co.

Chartered Accountants Firm Regn. No 302016E

S. Saha

Partner

Membership No. 300639 .

Place: Kolkata Dated : 4th July, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of CFL CAPITAL FINANCIAL SERVICES LIMITED, as at 31st March, 2011 and also the Profit and Loss Account and Cash Flow 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. Except as discussed in paragraph 4, 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central 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 said Order.

4. Further, to our comments in the annexure referred to in paragraph 3 above.

i) The net worth of the Company is negative. The Company's Management has drawn a revival plan to liquidate some assets, to borrow money, restructure its debts and reduce its expenses and liabilities. On the basis of the above plan the Company may be in a position to continue as a going concern. (Refer notes B-1 & B-2 in Schedule 12)

ii) Loans from Banks and UTI and interest charged thereon have been provided as per the terms agreed, in principle, with them in the past. ( Refer notes in Schedule 3)

5. Attention is drawn to :-

a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note B-26 on Schedule-12)

b. The Company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note B-26 on Schedule-12)

6) Subject to our foregoing observations in Para 4, and its consequential effects on Loss for the year and assets and liabilities as at 31st March, 2011, we further 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 law have been kept by the Company so far as appears from our examination of the book except our observations under Para 4 above;

iii) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with in this report are in agreement with books of account;

iv) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the requirements of Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v) On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on records by the Board of Directors, we report that all the Directors are disqualified from being appointed as a director of another public company in terms of Clause (g) of sub- Section (1) of section 274 of the Companies Act, 1956;

7) Subject to the effect of such adjustments, if any, as referred to in paragraph 4, as might have been determined to be necessary had we been able to satisfy ourselves, in our opinion and to the best of our information and according to explanations given to us, the accounts, give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view :-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

ii) In case of the Profit and Loss Account of the Company, Loss for the year ended on that date and

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

Annexure to the Auditors' Report

The annexure referred to in the Auditors' Report to the members of CFL Capital Financial Services Limited (the Company) for the year ended March 31, 2011. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2. The Stock of Shares and Securities of the Company has been physically verified by the Management during the year and no discrepancies were noticed between physical and book stock.

3. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control procedures.

5. In our opinion, and according to the information and explanations given to us, there are no transactions during the year that need to be entered in the register in pursuance of Section 301 of the Act..

6. In our opinion and according to the information and explanations given to us, (a) the Company has neither accepted nor renewed any deposits during the year, (b) it had accepted deposits in earlier years by complying the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules thereunder and also the directives of the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act, 1956. The Company Law Board has permitted the Company to repay the depositors in installments by 31st December, 2012. (Refer note B.3 in Schedule 12)

7. On the basis of the Internal Audit Reports broadly reviewed by us we are of the opinion that, the coverage of internal audit functions carried out by the Management, is commensurate with its size and the nature of its business.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of the cost records under the clause (d) of the sub-section (1) of the Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, income- tax, sales tax, employees state insurance, customs duty, Investor Education and Protection fund, wealth tax, service and any other material statutory dues applicable to it.

10. According to the information and the explanations given to us, no undisputed dues payable in respect of income-tax, sales tax, wealth tax, service tax, customs duty and cess were outstanding at 31st March, 2011 for a period of more than six months from the date they became payable.

According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1.

11. The Company has accumulated losses of Rs. 51,134.85 lakhs at the end of the financial year and has incurred cash losses in the financial year and in the immediately preceding financial year.

12. On the basis of the books and records examined by us and the information and explanations given to us, the Company has defaulted in repayment of dues to financial institutions and banks as per details given below- Annexure II.

13. On the basis of the books and records examined by us, and 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, debentures and other securities.

14. The Company was registered as Non Banking Finance Company with the Reserve Bank of India but the same stands cancelled with effect from May 18, 2004. (Refer Note B-2 of Schedule 12)

15. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Company's present or former name.

16. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

17. According to the information and explanations given to us, on an overall basis, the term loans taken in previous years have been applied for the purpose they were obtained.

18. On the basis of overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds have been raised by the Company during the year. However, the funds raised in earlier years for short term purpose have been used for long term purpose and it is not possible to determine the quantum of the same in this year.

19. The Company has not made any preferential allotment of the shares to the parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956 during the year.

20. The Company has created securities in respect of debentures outstanding at the year-end. (Refer note (iv) under Secured Loans in Schedule 3. The trustees have resigned.

21. The Company has not raised any money by public issue during the year.

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

Annexure to Auditors' Report for year ended 31st March, 2011

Particulars of disputed statutory liability not paid to the authorities

Annexure - I

Name of the Nature of dues Amount in Period to which Amount Statute lakhs lakhs relates

Sales Tax Lease Tax 121.14 1996-97 to 1998-99

Lease Tax 0.15 1999-2000

Sales Tax 1.31 1996-97

Sales Tax 3.70 1996-97

Bombay Stamp Act Stamp Duty 43.80

Name of the Nature of dues Forum where the dispute is Statute lakhs pending

Sales Tax Lease Tax Orissa Sales Tax Tribunal

Lease Tax Commissioner of Sales Tax, Bhubhaneshwar

Sales Tax Commercial Tax Dept. Lucknow

Sales Tax Dy. Commissioner of ST, Jaipur

Bombay Stamp Act Stamp Duty Superintendent of Stamps



Annexure to Auditors' Report for year ended 31-Mar-2011 Annexure - II (Rs in Lakhs)

Default to Banks / FIs Default Default Total Default Principal Interest as on 31.3.2011

Bank of Rajasthan Ltd. 551 689 1240

Catholic Syrian Bank Ltd. 387 484 871

Dena Bank 1377 1723 3100

Federal Bank Ltd. 290 257 547

IndusInd Bank Ltd. 893 1122 2015

Oriental Bank of Commerce 448 565 1013

South Indian Bank Ltd. 674 843 1517

State Bank of Travancore 826 1034 1860

UTI Bank Ltd. 518 615 1133

Vijaya Bank 918 1148 2066

Total - Banks 6882 8480 15362

Financial Institution

Unit Trust of India 195 380 575

For Tarmaster & Co. Chartered Accountants Firm Regn. No 302016E

R P Nandy Partner Membership No. 51027

Place : Kolkata Dated : 27th May, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of CFL CAPITAL FINANCIAL SERVICES LIMITED, as at 31st March, 2010 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. 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. Except as discussed in paragraph 4, 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. 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, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. -

4. Further, to our comments in the annexure referred to in paragraph 3 above.

i) The net worth of the Company is negative. The Companys Management has drawn a revival plan to liquidate some assets, to borrow money, restructure its debts and reduce its expenses and liabilities. On the basis of the above plan the Company may be in a position to continue as a going concern. (Refer notes B-1 & B-2 in Schedule 12)

ii) Loans from Banks and UTi and interest charged thereon have been provided as per the terms agreed, in principle, with them in the past. ( Refer notes in Schedule 3)

5. Attention is drawn to :-

a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note B-26 on Schedule-12)

b. The company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note B-26 on Schedule-12)

6) Subject to our foregoing observations in Para4lJand its consequential effects on Loss for the year and assets and liabilities as at 31 st March, 2010, we further 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 law have been kept by the company so far as appears from our examination of the book except our observations under Para 4 above;

iii) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with in this report are in agreement with books of account;

iv) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the requirements of Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v) On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on records by the Board of Directors, we report that all the Directors are disqualified from being appointed as a director of another public company in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

7) Subject to the effect of such adjustments, if any, as referred to in paragraph 4, as might have been determined to be necessary had we been able to satisfy ourselves, in our opinion and to the best of our information and according to explanations given to us, the accounts, give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view :-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

ii) In case of the Profit and Loss Account of the Company, Loss for the year ended on that date and

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

Annexure to the Auditors Report

The annexure referred to in the Auditors Report to the members of CFL Capital Financial Services Limited (the Company) forthe year ended March 31, 2010. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2. The Stock of Shares and Securities of the Company has been physically verified by the Management during the year and no discrepancies were noticed between physical and book stock

3. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

•4. In our opinion, and according to the information and explanations given to us, there are adequate internalcontrol procedures commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control procedures.

5. In our opinion, and according to the information and explanations given to us, there are no transactions during the year that need to be entered in the register in pursuance of section 301 of the Act..

6. In our opinion and according to the information and explanations given to us, (a) the Company has neither accepted nor the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act 1956. The Company Law Board has permitted the Company to repay the depositors in installments by 31st December, 2012. (Refer note B.3 in Schedule 12)

7. On the basis of the Internal Audit Reports broadly reviewed by us we are of the opinion that, the coverage of internal audit functions carried out by the Management, is commensurate with its size and the nature of its business.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of the cost records under the clause (d) of the sub-section (1) of the Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, income tax sales tax, employees state insurance, customs duty, Investor Education and Protection fund, wealth tax, service and any other

10. According to the information and the explanations given to us, no undisputed dues payable in respect of income- tax, sales tax, wealth tax, service tax, customs duty and cess were outstanding at 31st March 2010 for a period of more than six months from the date they became payable.

According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1.

12. On the basis of the books and records examined by us and the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks as per details given below- Annexure II.

13. On the basis of the books and records examined by us, and 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, debentures and other securities

14. The Company was registered as Non Banking Finance Company with the Reserve bankof India but the same stands cancelled with effect from May 18,2004. (Refer Note B-2 of Schedule 12)

15. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Companys present or former name.

16. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

17. According to the information and explanations given to us, on an overallbasis, the term loans taken in previous years have been applied for the purpose they were obtained

18. On the basis of overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds have been raised by the Company during the year However, the funds raised in earlier years for short term purpose have been used for long term purpose and it is not possible to determine the quantum of the same in this year.

19. The Company has not made any preferential all> tment of the shares to the parties and companies covered in the register maintained u/s 301 of the Act during the year.

20. The Company has created securities in respect of debentures outstanding at the year-end. (Refer note (iv) under Secured Loans in Schedule 3. The trustees have resigned. .

21. The Company has not raised any money by public issue during the year.

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

For TARMASTER & CO.

Chartered Accountants Firm Regn. NO302016E

R P Nandy

Partner

Membership No. 51027 Place : Kolkata Dated : 28th May, 2010