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Auditor Report of Edelweiss Financial Services Ltd.

Mar 31, 2014

Report on the financial statements

We have audited the accompanying financial statements of Edelweiss Financial Services Limited (''the Company'') which comprise the balance sheet as at 31 March 2014, the statement of profit and loss and the 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 Standards referred to in sub-section (3C) of section 211 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.

Auditor''s 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 misstatement.

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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness 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. Opinion

In our opinion, and to the best of our information and according to the explanations given to us, 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014; (ii) in the case of the statement of profit and loss, of the profit for the year ended on that date; and (iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

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 sub-section (4A) of section 227 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said 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 purposes of the 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, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

(e) On the basis of the written representations received from the directors of the Company as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014 from being appointed as director in terms of clause (g) of sub section (1) of section 274 to the Act.

(Referred to in 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) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company primarily engaged in the business of rendering merchant banking services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) During the year, the Company has granted unsecured demand loan to one subsidiary company which is covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs. 9.81 million and the year-end balance of such loans was Rs. Nil.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loan granted to the aforementioned company is repayable on demand. According to the information and explanations given to us, the borrower has been regular in the payment of interest as stipulated.

(d) The loans granted to the companies listed in the register maintained under section 301 are repayable on demand. Accordingly, there is no overdue amount of more than Rs. 1 lakh in respect of loans granted to any of the companies, firms or other parties listed in the register maintained under section 301.

(e) The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and with regard to sale of services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(l)(d) of the Act for any of the activities conducted by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Service tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Sales-tax, Wealth-tax, Custom Duty, Excise Duty, Cess and Investor Education and Protection Fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Service tax and other material statutory dues were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

(c] According to the information and explanations given to us, there are no dues of Provident Fund, Income-tax, Service tax and other material statutory dues which have not been deposited with the appropriate authorities on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceeding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or debenture holders.

(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) In our opinion and according to information and explanations given to us, the Company is not a chit fund, nidhi or mutual benefit fund/society.

(xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in securities and timely entries have been made therein. Further, such securities and investments have been held by the Company in its own name except to the extent of exemption granted under section 49 of the Act.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 B S R & Associates LLP

Chartered Accountants

Firm''s Registration No.: 116231W

N Sarrpath Ganesh

Mumbai Partner

17 May 2014 Membership No.: 042554


Mar 31, 2013

Report on the fnancial statements

We have audited the accompanying fnancial statements of Edelweiss Financial Services Limited (''the Company'') which comprise the balance sheet as at 31 March 2013, the statement of proft and loss and the cash fow statement for the year then ended, and a summary of signifcant accountng policies and other explanatory informaton.

Management''s responsibility for the fnancial statements

Management is responsible for the preparaton of these fnancial statements that give a true and fair view of the fnancial positon, fnancial performance and cash fows of the Company in accordance with the Accountng Standards referred to in sub-secton (3C) of secton 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementaton and maintenance of internal control relevant to the preparaton and presentaton of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditng issued by the Insttute 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparaton and fair presentaton of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluatng the appropriateness of accountng policies used and the reasonableness of the accountng estmates made by management, as well as evaluatng the overall presentaton of the fnancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, and to the best of our informaton and according to the explanatons given to us, the fnancial statements give the informaton required by the Act in the manner so required and give a true and fair view in conformity with the accountng principles generally accepted in India:

(i) in the case of the balance sheet, of the state of afairs of the Company as at 31 March 2013;

(ii) in the case of the statement of proft and loss, of the proft for the year ended on that date; and

(iii) in the case of cash fow statement, of the cash fows for the year ended on that date.

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 sub-secton (4A) of secton 227 of the Act, we enclose in the Annexure, a statement on the maters specifed in paragraphs 4 and 5 of the said Order.

2 As required by secton 227(3) of the Act, we report that:

(a) We have obtained all the informaton and explanatons which to the best of our knowledge and belief were necessary for the purposes of the 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 examinaton of those books;

(c) The balance sheet, statement of proft and loss and cash fow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the balance sheet, statement of proft and loss and cash fow statement comply with the accountng standards referred to in sub-secton (3C) of secton 211 of the Act;

(e) On the basis of the writen representatons received from the directors of the Company as on 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on 31 March 2013 from being appointed as director in terms of clause (g) of sub secton (1) of secton 274 to the Act.

(Referred to in our report of even date)

(i) (a) The Company has maintained proper records showing full partculars, including quanttatve details and situaton of fxed assets.

(b) The Company has a regular programme of physical verifcaton of its fxed assets by which all fxed assets are verifed in a phased manner over a period of three years. In our opinion, this periodicity of physical verifcaton is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were notced on such verifcaton.

(c) Fixed assets disposed of during the year were not substantal, and therefore, do not afect the going concern assumpton.

(ii) The Company is a service company primarily engaged in the business of rendering merchant banking services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) During the year, the Company has granted unsecured demand loan to one subsidiary company which is covered in the register maintained under secton 301 of the Act. The maximum amount outstanding during the year was Rs. 22.11 million and the year-end balance of such loans was Rs. Nil.

(b) In our opinion, the rate of interest and other terms and conditons on which loans have been granted to the companies listed in the register maintained under secton 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loan granted to the aforementoned company is repayable on demand. According to the informaton and explanatons given to us, the borrower has been regular in the payment of interest as stpulated.

(d) The loans granted to the companies listed in the register maintained under secton 301 are repayable on demand. Accordingly, there is no overdue amount of more than Rs. 1 lakh in respect of loans granted to any of the companies, frms or other partes listed in the register maintained under secton 301.

(e) The Company has not taken any loans from companies, frms or other partes covered in the register maintained under secton 301 of the Companies Act, 1956.

(iv) In our opinion and according to the informaton and explanatons given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fxed assets and with regard to sale of services. In our opinion and according to the informaton and explanatons given to us, there is no contnuing failure to correct major weaknesses in internal control system.

(v) (a) In our opinion and according to the informaton and explanatons given to us, the partculars of contracts or arrangements referred to in secton 301 of the Act have been entered in the register required to be maintained under that secton.

(b) In our opinion, and according to the informaton and explanatons given to us, the transactons made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant tme.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under secton 209(1)(d) of the Act for any of the actvites conducted by the Company.

(ix) (a) According to the informaton and explanatons given to us and on the basis of our examinaton of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Service tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorites. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Sales-tax, Wealth-tax, Custom Duty, Excise Duty, Cess and Investor Educaton and Protecton fund.

(b) According to the informaton and explanatons given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Service tax and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

(c) According to the informaton and explanatons given to us, there are no dues of Provident Fund, Income-tax, Service tax and other material statutory dues which have not been deposited with the appropriate authorites on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the fnancial year and has not incurred cash losses in the fnancial year and in the immediately preceding fnancial year.

(xi) In our opinion and according to the informaton and explanatons given to us, the Company has not defaulted in repayment of dues to its bankers or debenture holders.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securites.

(xiii) In our opinion and according to informaton and explanatons given to us, the Company is not a chit fund, nidhi or mutual beneft fund/society.

(xiv) The Company has maintained proper records of the transactons and contracts in respect of dealing in securites and tmely entries have been made therein. Further, such securites and investments have been held by the Company in its own name except to the extent of exempton granted under secton 49 of the Act.

(xv) In our opinion and according to the informaton and explanatons given to us, the terms and conditons on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the informaton and explanatons given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the informaton and explanatons given to us and on overall examinaton of the balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

(xviii) The Company has not made any preferental allotment of shares to companies/frms/partes covered in the register maintained under secton 301 of the Act.

(xix) According to the informaton and explanatons given to us, the Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the informaton and explanatons given to us, no fraud on or by the Company has been notced or reported during the year. For B S R & Associates

Chartered Accountants

Firm''s Registraton No.: 116231W

N Sampath Ganesh

Mumbai Partner

15 May 2013 Membership No.: 042554


Mar 31, 2012

We have audited the accompanying balance sheet of Edelweiss Financial Services Limited ('the Company') as at 31 March 2012, the statement of profit and loss and the 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.

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 includeRs 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.

1 As required by the Companies (Auditor's Report) Order, 2003 and amendments thereto (together referred to as 'the Order') issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 ('the Act'), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. '

2 Further to our comments in the Annexure referred to 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 the 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 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 cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

(e) On the basis of the written representations received from the directors of the Company as at 31 March 2012, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 March 2012 from being appointed as director in terms of clause (g) of sub section (1) of section 274 to the Act; and

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2012;

(ii) in the case of the statement of profit and loss, of the profit of the Company for the year ended 31 March 2012; and

(iii) in the case of cash flow statement, of the cash flows of the Company for the year ended 31 March 2012.

Annexure to Auditors' Report - 31 March 2012

(Referred to in 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) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification performed in the current year ended 31 March 2012.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company primarily engaged in the business of rendering merchant banking services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) During the year, the Company has granted unsecured demand loan to one subsidiary company which is covered in the register

maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs 16,265,060 and the balance as at 31 March 2012 of such loan was Rs 9,613,563.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loan granted to the aforementioned company is repayable on demand. According to the information and explanations given to us, the borrower has been regular in the payment of interest as stipulated.

(d) The loans granted to the companies listed in the register maintained under section 301 are repayable on demand. Accordingly, there is no overdue amount of more than Rs 1 lakh in respect of loans granted to any of the companies, firms or other parties listed in the register maintained under section 301 of the Act.

(e) The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and with rfegard to sale of services. The activities of the Company do not involve any purchase of inventory and sale of goods. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant point in time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(l)(d) of the Act for any of the activities conducted by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Service tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees State Insurance, Sales-tax, Wealth-tax, Custom Duty, Excise Duty, Cess and Investor Education and Protection fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax. Customs duty. Excise duty and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, other than those stated in Appendix I to this report there are no dues of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues which have not been deposited with the appropriate authorities on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or debenture holders.

(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) In our opinion and according to information and explanations given to us, the Company is not a chit fund, nidhi or mutual benefit fund/ society. !

(xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in securities and timely entries have been made therein. Further, such securities and investments have been held by the Company in its own name except to the extent of exemption granted under section 49 of the Act.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has ' given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they Were raised.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short term basis during the year have not been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of debentures issued during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B S R & Associates

Chartered Accountants

Firm's Registration No.: 116231W

N Sampath Ganesh

Mumbai Partner

16 May 2012 Membership No.: 042554


Mar 31, 2011

We have audited the accompanying balance sheet of Edelweiss Capital Limited (the Company) as at 31 March 2011, the profit and loss account and the 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.

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.

1 As required by the Companies (Auditors Report) Order, 2003 and amendments thereto (together referred to as the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2 Further to our comments in the Annexure referred to 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 the 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

(e) On the basis of the written representations received from the directors of the Company as at 31 March 2011, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 March 2011 from being appointed as director in terms of clause (g) of sub section (1) of section 274 to the Act; and

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements, 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2011;

(ii) in the case of the profit and loss account, of the profit of the Company for the year ended 31 March 2011; and

(iii) in the case of cash flow statement, of the cash flows of the Company for the year ended 31 March 2011.

Annexure to Auditors Report - 31 March 2011 (Referred to in 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) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) During the year, the Company has granted unsecured demand loan to one subsidiary company which is covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs. 415.59 lakhs and the year- end balance of such loans was Rs. 137.35 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The loan granted to the aforementioned company is repayable on demand. According to the information and explanations given to us, the borrower has been regular in the payment of interest as stipulated.

(d) The loans granted to the companies listed in the register maintained under section 301 are repayable on demand. Accordingly, there is no overdue amount of more than Rs. 1 lakh in respect of loans granted to any of the companies, firms or other parties listed in the register maintained under section 301.

(e) The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and with regard to sale of services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Act for any of the activities conducted by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Service tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees State Insurance, Sales- tax, Wealth-tax, Custom Duty, Excise Duty, Cess and Investor Education and Protection fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income- tax, Service tax and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, other than those stated in Appendix I to this report there are no dues of Income-tax, Provident Fund, Wealth tax, Service tax and other material statutory dues which have not been deposited with the appropriate authorities on account of any dispute.

(d) There were no dues on account of cess under Section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been made effective by the Central Government.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or debenture holders.

(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) In our opinion and according to information and explanations given to us, the Company is not a chit fund, nidhi or mutual benefit fund/ society.

(xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in securities and timely entries have been made therein. Further, such securities and investments have been held by the Company in its own name except to the extent of exemption granted under section 49 of the Act.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 B S R & Associates Chartered Accountants Firms Registration No.: 116231W



Akeel Master Partner Membership No.: 046768

Mumbai 16 May 2011


Mar 31, 2010

We have audited the accompanying balance sheet of Edelweiss Capital Limited (the Company) as at 31 March 2010, the profit and loss account and the 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.

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.

1. As required by the Companies (Auditors Report) Order, 2003 and amendments thereto (together referred to as the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 the 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

(e) On the basis of the written representations received from the directors of the Company as at 31 March 2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 March 2010 from being appointed as director in terms of clause (g) of sub section (1) of section 274 to the Act; and

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements, give the information required by the Act, 1956 in the manner so required and 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 31 March 2010;

(ii) in the case of the profit and loss account, of the profit of the Company for the year ended 31 March 2010; and

(iii) in the case of cash flow statement, of the cash flows of the Company for the year ended 31 March 2010. Annexure to Auditors Report - 31 March 2010 (Referred to in 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) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) The Company is a service company. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) The Company has granted unsecured loans to its subsidiary companies which are covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs 457.36 lakhs and the year-end balance of such loans was Rs 321.09 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) In case of loans granted to the companies listed in the register maintained under section 301, which are repayable on demand, the borrowers have been regular in repaying the interest as stipulated.

(d) The loans granted to the companies listed in the register maintained under section 301 are repayable on demand. Accordingly, there is no overdue amount of more than Rs 1 lakh in respect of loans granted to any of the companies, firms or other parties listed in the register maintained under section 301.

(e) The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and with regard to sale of services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the activities conducted by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Service tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees State Insurance, Sales- tax, Wealth-tax, Custom Duty, Excise Duty, Cess and Investor Education and Protection fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income- tax, Service tax and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, other than those stated in Appendix I to this report there are no dues of Income-tax, Provident Fund, Wealth tax, Service tax and other material statutory dues which have not been deposited with the appropriate authorities on account of any dispute.

(d) There were no dues on account of cess under Section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been made effective by the Central Government.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or debenture holders.

(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) In our opinion and according to information and explanations given to us, the Company is not a chit fund, nidhi or mutual benefit fund/ society.

(xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in securities and timely entries have been made therein. Further, such securities and investments have been held by the Company in its own name except to the extent of exemption granted under section 49 of the Companies Act 1956.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of debentures issued during the year. The Company is not required to create any charge on outstanding unsecured debentures.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 B S R & Associates

Chartered Accountants

Firms Registration No.: 116231W



Akeel Master

Partner

Membership No.: 046768

Mumbai 21 May 2010

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