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Auditor Report of IIFL Holdings Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of IIFL Holdings Limited (Formerly India Infoline Limited ("the Company"), which comprise the balance sheet as at 31 March 2014, and 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 Company''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:

(a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014;

(b) in the case of the statement of profit and loss, of the profit 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.

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 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, 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 notified under the Act read with the General Circular 15/2013 dated 13 September 2013, of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors 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 a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in of our report dated May 13, 2014 to the members of NFL Holdings Limited (Formerly India Infoline Limited) ("the Company") for the year ended 31 March 2014. We report that:

1. (a) The Company has maintained adequate records to show full particulars, including quantitative details and situation of the fixed assets.

(b) The Company has formulated a programme of physical verification of its fixed assets in a phased manner. In accordance with this program, a physical verification of certain fixed assets has been carried out by management during the year and there are no material discrepancies observed between assets physically verified and book balances. In our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) As a part of restructure of Company''s business in terms of approval by Hon. High Court, Bombay of a Scheme of Arrangement under Section 391 to 394 and other applicable provisions of the Companies Act, 1956, the Company has transferred its "Financial Services Undertaking" as defined in the said approved Scheme. Since the transfer is made to one of its wholly owned subsidiaries over which the Company retains full operational control, in our opinion, this transfer is not of that nature to affect its going concern status.

2. The Company is not carrying on any manufacturing or trading activity. Therefore, the provisions of sub clause (a), (b), and (c), of clause (ii) of paragraph 4 of the Order are not applicable to the Company.

3. (a) The Company has granted loan to one Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amounts involved during the year were Rs.21,84,733/- and the yearend balance of loans granted to such Company was Rs.21,84,733/-

(b) The rate of Interest on loan given is, in our opinion, not prima facie prejudicial to the interest of the Company. There are no other terms and conditions prescribed.

(c) There are no stipulations as to repayment of principal and interest amounts.

(d) There is no overdue amount in excess of Rs.1 lakh in respect of loan granted to Companies listed in the register maintained under Section 301 of the Companies Act, 1956 since repayment schedule is not stipulated.

(e) The Company has not taken any loans from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub clause (e), (f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business, for the purchase of fixed assets and sale of 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 neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. (a) in our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 of the Companies Act, 1956 and those brought to our notice, have been so entered, (b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are not comparable since the prevailing market prices of such services, in view of the management, are not readily available.

6. The Company has not accepted any deposits from the public of the nature, which attracts the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules made there under. Therefore, the provision of clause (vi) of paragraph 4 of the Order is not applicable to the Company.

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

8. As per the information and explanations given to us, in respect of the class of industry the Company falls under, the maintenance of cost records has not been prescribed by the Central Government under section 209(1 )(d) of the Companies act, 1956. Therefore, the provision of clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as and wherever applicable to the Company, with the appropriate authorities. Based on the information furnished to us, there are no undisputed statutory dues as on 31st March 2014, which are outstanding for a period exceeding six months from the date they became payable.

(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of sales tax/excise duty/service tax/income tax/custom duty/wealth tax/cess as at 31st March 2014

which have not been deposited on account of a dispute pending, and amount involved and the forum where dispute is pending is as under; Name of the Nature of the Disputed Amount of Statute Dues Tax (Rs.)

MVAT Act, Delay in filing VAT Audit 5,63,342 2002 Report for the period 2007-2008

Income Tax Disallowance of Expenses 6,07,817 Act, 1961 U/S14A

Income Tax Disallowance of 70,25,888 Act,1961 Depreciation, Disallowance U/S 14A and Disallowance of Expenses

Income Tax Disallowance of Expenses 4,43,78,710 Act, 1961 U/S 14 A and Esop

Expenses

Income Tax Disallowance of Expenses 9,62,47,624 Act, 1961 U/S 14 A and Esop

Expenses Income Tax Disallowance of Expenses 5,51,65,596 Act, 1961 U/S 14 A and Esop Expenses

Profession Tax Profession Tax, Penalty 15,53,529 and Interest

Name of the Period to which the Forum where dispute is pending amount relates

MVAT Act, F.Y. 2007-2008 Jt. Comm. Of Sales Tax 2002

Income Tax A.Y.2006-2007 CIT (Appeals) of Income Tax has partly decided the Act, 1961 appeal in favour of the Company. Order giving effect to CIT appeal order is pending with the assessing officer.

Income Tax A.Y.2007-2008 Order giving effect to ITAT order is pending with the Act, 1961 assessing officer.

Income Tax A.Y.2008-2009 CIT (Appeals) of Income Tax has partly decided appeal in Act, 1961 favour of the Company. Order giving effect to CIT (A) order is pending. The Company has also filed appeal before ITAT in respect of disallowance of ESOP expenses.

Income Tax A.Y.2009-2010 CIT Appeals of Income Tax Act, 1961

Expenses Income Tax A.Y.2010-2011 CIT Appeals of Income Tax Act, 1961

Profession Tax A.Y.2007-2008 Dy. Comm. of Sales Tax- Appeals

10. At the end of the financial year, the Company has neither accumulated losses nor has incurred any cash loss during the financial year covered by our audit, and in the immediately preceding financial year.

11. As the Company has not borrowed from financial institution or bank or debenture holders during the year, therefore, the clause 4(xi) of the order is not applicable to the Company.

12. According to the information and explanations given to us, since the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, in our opinion, the Company need not maintain relevant documents and records.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of sub clause (a), (b), (c) and (d) of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provision of clause (xiv) of paragraph 4 of the order is not applicable to the Company.

15. The Company has granted Corporate Guarantees to Banks/ Financial Institutions in respect of loans availed by its subsidiary companies. Based on the information and explanations given to us, we are of the opinion that the terms and conditions on which the guarantees are given are prima facie, not prejudicial to the interest of the Company.

16. The Company has not availed any term loan during the period. Therefore, the provision of clause (xvi) of paragraph 4 of the Order is not applicable to the Company.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

18. The Company has not made preferential allotment of shares to parties and companies including those, covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year. Therefore, the provision of clause (xix) of the paragraph 4 of the Order is not applicable to the Company.

20. The Company has not raised any money through a public issue during the year. Therefore, the provision of clause (xx) of paragraph 4 of the Order is not applicable to the Company.

21. 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 explanation given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by management.

For Sharp & Tannan Associates

Chartered Accountants

Firm''s Registration No.109983W

by the hand of

Tirtharaj Khot

Place: Mumbai Partner

Date : May 13, 2014 Membership No. (F) 037457


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of India Infoline Limited ("the Company") which comprise the balance sheet as at 31st March 2013, 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. 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 thefinancial 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 31st March 2013;

(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 the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to note 27 in the financial statements, which states about the Company''s proposal to transfer substantial portion of its business to one of its wholly owned subsidiaries as part of Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956. It has also decided to continue its remaining business. Accordingly the accounts are prepared on a going concern basis. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 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, 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 subsection (3C) of section 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in of our report dated May 11, 2013, to the members of India Infoline Limited ("the Company") for the year ended 31st March 2013. We report that:

1. (a) The Company has maintained adequate records to show full particulars, including quantitative details and situation of the fixed assets. However updafion for the current year transactions is in progress.

(b) The Company has formulated a programme of physical verification of its fixed assets in a phased manner. In accordance with this program, a physical verification of certain fixed assets has been carried out by management during the year and there are no material discrepancies observed between assets physically verified and book balances. In our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

2. The Company is not carrying on any manufacturing or trading activity. Therefore, the provisions of sub clause (a), (b), and (c), of clause (ii) of paragraph 4 of the Order are not applicable to the Company.

3. (a) The Company has granted loan to three Companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amounts involved during the year were Rs. 215,65,10,319/- and the year end balance of loans granted to such Companies/Party was Rs. 21,84,733/-

(b) The rate of Interest on loan given is, in our opinion, not prima facie prejudicial to the interest of the Company. There are no other terms and conditions prescribed.

(c) There are no stipulations as to repayment of principal and interest amounts.

(d) There is no overdue amount in excess of Rs. 1 lakh in respect of loan granted to Companies listed in the register maintained under Section 301 ofthe Companies Act, 1956 since repayment schedule is not stipulated.

(e) The Company has taken loan from one Company covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs. 216,00,00,000/- and the year-end balance of the loan taken was NIL.

(f) The rate of Interest on loan taken is, in our opinion, not prima facie prejudicial to the interest of the Company. There are no other terms and conditions prescribed.

(g) There are no stipulations as to repayment of principal and interest amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate infernal control systems commensurate with the size of the Company and nature of its business, for the purchase of fixed assets and sale of 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 neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid infernal control systems.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 ofthe Companies Act, 1956 and those brought to our notice, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are not comparable since the prevailing market prices of such services, in view of the management, are not readily available.

6. The Company has not accepted any deposits from the public of the nature, which attracts the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules made there under. Therefore, the provision of clause (vi) of paragraph 4 of the Order is not applicable to the Company.

7. In our opinion, the Company has an infernal audit system commensurate with its size and nature of its business.

8. As per the information and explanations given to us, in respect of the class of industry the Company falls under, the maintenance of cost records has not been prescribed by the Central Government under section 209(1)(d) of the Companies act, 1956. Therefore, the provision of clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income fax, Sales fax, Wealth fax, Service fax, Customs duty, Excise duty, Cess and other material statutory dues as and wherever applicable to the Company, with the appropriate authorities. Based on the information furnished to us, there are no undisputed statutory dues as on 31st March 2013, which are outstanding for a period exceeding six months from the date they became payable, except profession fax amounting to Rs. 50,38,623/- which has remained outstanding for a period exceeding six months, pending due to complexifies in registration of numerous branch offices according to respective state/union territory laws.

(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of sales fax/excise dufy/service fax/income fax/custom duty/ wealth fax/cess as at 31st March, 2013 which have not been deposited on account of a dispute pending, and amount involved and the forum where dispute is pending is as under;

Name of the Nature of the disputed dues Amount of Tax statute (Rs.)

MVAT Act, 2002 Delay in filing VAT Audit Report for 563,342 the period 2007-2008

Income Tax Act,1961 Disallowance of Expenses U/S 14 A 607,817

Income Tax Act,1961 Disallowance of Depreciation, 7,025,888 Disallowance U/S 14A and Disallowance of Expenses

Income Tax Act,1961 Disallowance of Expenses U/S 14 A 44,378,710 and Esop Expenses

Income Tax Act,1961 Disallowance of Expenses U/S 14 A 96,247,624 and Esop Expenses

Profession Tax Profession Tax, Penalty and Interest 1,553,529

Name of the Statute Period to which Forum where dispute is pending the amount relates

MVAT Act 2002 F.Y. 2007-2008 Jt. Comm. Of Sales Tax

Income Tax Act 1961 A.Y.2006-2007 CIT (Appeals) of Income Tax has partly decided the appeal in favour of the Company. Order giving effect to CIT appeal order is pending with the assessing officer.

Income Tax Act 1961 A.Y.2007-2008 Order giving effect to ITAT order is pending with the assessing officer.

Income Tax Act 1961 A.Y.2008-2009 CIT (Appeals) of Income Tax has partly decided appeal in favour of the Company. Order giving effect to CIT (A) order is pending. The Company has also filed appeal before ITAT in respect of disallowance of ESOP expenses.

Income Tax Act 1961 A.Y.2009-2010 CIT Appeals of Income Tax

Profession Tax A.Y.2007-2008 Dy.Comm of Sales Tax- Appeals

10. At the end of the financial year, the Company has neither accumulated losses nor has incurred any cash loss during the financial year covered by our audit, and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of its dues to its financial institutions, banks and debenture holders.

12. According to the information and explanations given to us, since the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, in our opinion, the Company need not maintain relevant documents and records.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of sub clause (a), (b), (c) and (d) of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. Based on our examination of the records and evaluation of the related internal controls, the Company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. The aforesaid shares, securities, debentures and other investments have been held by the Company in its own name, except to the extent of the exemption granted under Section 49 of the CompaniesAct, 1956.

15. The Company has granted Corporate Guarantees to Banks/ Financial Institutions in respect of loans availed by its subsidiary companies. Based on the information and explanations given to us, we are of the opinion that the terms and conditions on which the guarantees are given are prima facie, not prejudicial to the interest of the Company.

16. The Company has not availed any term loan during the period. Therefore, the provision of clause (xvi) of paragraph 4 of the Order is not applicable to the Company.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

18. The Company has not made preferential allotment of shares to parties and companies including those, covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year. Therefore, the provision of clause (xix) of the paragraph 4 of the Order is not applicable to the Company.

20. The Company has not raised any money through a public issue during the year. Therefore, the provision of clause (xx) of paragraph 4 of the Order is not applicable to the Company.

21. 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 explanation given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by management.

For Sharp & Tannan Associates

Chartered Accountants

ICAI Registration No.109983W

By the hand of

Tirtharaj Khot

Place: Singapore Partner

Date: May 11, 2013 Membership No.: (F)037457


Mar 31, 2012

We have audited the attached Balance Sheet of India Infoline Limited as at 31st March, 2012, and the statement of Profit and Loss and also 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the 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.

In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:

1. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India under sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, 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:

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 account as required by law have been kept by the company so far as appears from our examination of the books;

iii) The balance sheet, statement of profit and loss and also cash flow statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the balance sheet, statement of profit and loss and also cash flow statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956; and

v) On the basis of written representations received by the Company from its Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31st March, 2012 from being appointed as a Director in terms of the clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies and notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2012;

b. In the case of the statement of profit and loss, of the profit 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.

1. (a) The Company has maintained adequate records to show full particulars, including quantitative details and situation of the fixed assets. However updation for the current year transactions is in progress.

(b) The Company has formulated a programme of physical verification of its fixed assets in a phased manner. In accordance with this program, a physical verification of certain fixed assets has been carried out by management during the year and there are no material discrepancies observed between assets physically verified and book balances. In our opinion, the periodicity of verification is reasonable having regard to the size of the company and the nature of its assets.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

2. The Company is not carrying on any manufacturing or trading activity. Therefore, the provisions of sub clause (a), (b), and (c), of clause (ii) of paragraph 4 of the Order are not applicable to the Company.

3. (a) The Company has granted loan to one company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 736,788,293/- and the year end balance of loans granted to such company was Rs. 52,431,868/-.

(b) The rate of Interest on loan given is, in our opinion, not prima facie prejudicial to the interest of the company. There are no other terms and conditions prescribed.

(c) There are no stipulations as to repayment of principal and interest amounts.

(d) There is no overdue amount in excess of Rs.1 lakh in respect of loan granted to Companies listed in the register maintained under Section 301 of the Companies Act, 1956 since repayment schedule is not stipulated.

(e) The company has taken loan from two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,182,959,424/-and the year end balance of the loan taken was NIL.

(f) The rate of Interest on loan taken is, in our opinion, not prima facie prejudicial to the interest of the company. There are no other terms and conditions prescribed.

(g) There are no stipulations as to repayment of principal and interest amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business, for the purchase of fixed assets and sale of 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 neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 of the Companies Act, 1956 and those brought to our notice, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are not comparable since the prevailing market prices of such services, in view of the management, are not readily available.

6. The Company has not accepted any deposits from the public of the nature, which attracts the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules made there under. Therefore, the provision of clause (vi) of paragraph 4 of the Order is not applicable to the Company.

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

8. As per the information and explanations given to us, in respect of the class of industry the company falls under, the maintenance of cost records has not been prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956. Therefore, the provision of clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as and wherever applicable to the Company, with the appropriate authorities. Based on the information furnished to us, there are no undisputed statutory dues as on 31st March 2012, which are outstanding for a period exceeding six months from the date they became payable, except professional tax amounting to Rs. 3,667,360/- which has remained outstanding for a period exceeding six months, pending due to complexities in registration of numerous branch offices according to respective state / union territory laws.

(b) According to the information and explanations given to us and records of the company examined by us, the particulars of sales tax / excise duty / service tax / income tax / custom duty / wealth tax / cess as at 31st March, 2012 which have not been deposited on account of a dispute pending, and amount involved and the forum where dispute is pending is as under;

Name of the Nature of the Amount of Period to which the Forum where Statute disputed dues Tax (Rs.) amount relates dispute is pending

MVAT Act, Delay in filing VAT Audit Report for the 2002 period 2007-2008 563,342 F.Y. 2007-2008 Jt. Comm. Of Sales Tax

Income Tax Penalty Proceeding U/S 271(1)(c) 106,680 A.Y.2004-2005 CIT (Appeals) of Act, 1961 Income Tax

Income Tax Disallowance of Expenses U/S 14 A 607,817 A.Y.2006-2007 CIT (Appeals) of Act, 1961 Income Tax

Income Tax Disallowance of Depreciation, Disallowance 7,025,888 A.Y.2007-2008 Assessing Officer Act, 1961 U/S 14A and Disallowance of Expenses

Income Tax Disallowance of Expenses U/S 14 A and 44,378,710 A.Y.2008-2009 CIT (Appeals) of Act, 1961 Esop Expenses Income Tax

10. At the end of the financial year, the Company has neither accumulated losses nor has incurred any cash loss during the financial year and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of its dues to its financial institutions, banks and debenture holders.

12. According to the information and explanations given to us, since the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, in our opinion, the company need not maintain relevant documents and records.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of sub clause (a), (b), (c) and (d) of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

14. Based on our examination of the records and evaluation of the related internal controls, the company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. The aforesaid shares, securities, debentures and other investments have been held by the Company in its own name, except to the extent of the exemption granted under Section 49 of the Companies Act, 1956.

15. The Company has granted Corporate Guarantees to Banks / Financial Institutions in respect of loans availed by its subsidiary companies. Based on the information and explanations given to us, we are of the opinion that the terms and conditions on which the guarantees are given are prima facie, not prejudicial to the interest of the company.

16. According to the records verified by us, and based on information and explanations given to us, the term loans have been applied for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments.

18. The Company has not made preferential allotment of shares to parties and companies including those, covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year. Therefore, the provision of clause (xix) of the paragraph 4 of the Order is not applicable to the company.

20. The Company has not raised any money through a public issue during the year.

21. 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 explanation given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year nor have we been informed of such case by management.

Sharp & Tannan Associates

Chartered Accountants

ICAI Registration No.109983W

By the hand of

Tirtharaj Khot

Place: Mumbai Partner

Date: May 15, 2012 Membership No.: (F) 037457


Mar 31, 2011

We have audited the attached Balance Sheet of India infoline limited as at march 31, 2011, and Profit and loss account and also 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 have conducted our audit in accordance with auditing standards generally accepted in India. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the 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.

in accordance with the provisions of Section 227 of the companies act, 1956, we report that:

1. as required by the companies (auditors Report) Order, 2003, issued by the central Government of India under sub-section (4a) of section 227 of the companies act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matter specified in paragraphs 4 and 5 of the said Order.

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

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) in our opinion, proper books of account as required by law have been kept by the company so far as appear from our examination of the books;

iii) the balance sheet, profit and loss account and also cash flow statement dealt with by this report are in agreement with the books of account;

iv) in our opinion, the balance sheet, profit and loss account and also cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3c) of Section 211 of the companies act, 1956;

v) On the basis of written representations received by the company from its Director as on march 31, 2011 and taken on record by the Board of Director, we report that none of the Director is disqualified as on march 31, 2011 from being appointed as a Director in terms of the clause (g) of sub-section (1) of section 274 of the companies act, 1956; in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies and notes appearing thereon, give the information required by the companies act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the balance sheet, of the state of affair of the company as at march 31, 2011;

b. in the case of the profit and loss account, of the profit 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.

Annexure

referred to in paragraph 1 of our report dated may 7, 2011, to the member of India infoline limited.

1. (a) the company has maintained adequate records to show full Particular, including quantitative details and situation of the fixed assets.

(b) The company has formulated a programme of physical verification of its fixed assets in a phased manner. in accordance with this program, a physical verification of certain fixed assets has been carried out by management during the year and there are no material discrepancies observed between assets physically verified and book balances. in our opinion, the periodicity of verification is reasonable having regard to the size of the company and the nature of its assets.

(c) The company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

2. The company is not carrying on any manufacturing or trading activity. therefore, the provisions of sub clause (a), (b), and (c), of clause (ii) of paragraph 4 of the Order are not applicable to the company.

3. (a) The company has granted loan to One company and loan to One Party covered in the register maintained under Section 301 of the companies act, 1956. the maximum amounts involved during the year were Rs 851,213,864/- and the year-end balance of loans granted to such company/Party was Rs 631,228,837/-.

(b) In our opinion, the rate of interest and other terms and conditions of such loan given is not, prima facie, prejudicial to the interest of the company.

(c) There are no stipulations as to repayment of principal and interest amounts.

(d) There is no overdue amount in excess of Rs 100,000 in respect of loan granted to company listed in the register maintained under Section 301 of the companies act, 1956 since repayment schedule is not stipulated.

(e) The company has not taken any loans from the companies, firms or other parties covered in the register maintained under Section 301 of the companies act, 1956. accordingly, the provisions of sub-clause (e), (f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business, for the purchase of fixed assets and sale of 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 neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. (a) In our opinion and according to the information and explanations given to us, the Particular of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 of the companies act, 1956 and those brought to our notice, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are not comparable since the prevailing market prices of such services, in view of the management, are not readily available.

6. The company has not accepted any deposits from the public of the nature, which attracts the provisions of Section 58a, 58aa or any other relevant provision of the companies act, 1956 and the rules made there under. therefore, the provision of clause (vi) of paragraph 4 of the Order is not applicable to the company.

7. In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

8. As per the information and explanations given to us, in respect of the class of industry the company falls under, the maintenance of cost records has not been prescribed by the central Government under section 209 (1) (d) of the companies act, 1956. therefore, the provision of clause (viii) of paragraph 4 of the Order is not applicable to the company.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including Provident Fund, investor education and Protection Fund, employees State insurance, income tax, Sales tax, Wealth tax, Service tax, customs duty, excise duty, cess and other material statutory dues as and wherever applicable to the company, with the appropriate authorities. Based on the information furnished to us, there are no undisputed statutory dues as on march 31, 2011, which are outstanding for a period exceeding six months from the date they became payable.

(b) According to the information and explanations given to us and records of the company examined by us, the Particular of sales tax/excise duty/service tax/income tax/custom duty/ wealth tax/cess as at march 31, 2011 which have not been deposited on account of a dispute pending, and amount involved and the forum where dispute is pending as under;

Name of the Statute Nature of the disputed dues Amount of tax (Rs) MVAT act,2002 Delay in filing Vat Audit Report 563,342/-

for the period 2007- 2008

Income tax act,1961 Penalty proceeding u/s 271 (1) (c) 106,680/-

Income tax act, 1961 Disallowance of Depreciation, 7,025,888/-

Disallowance of expenses u/s 14a

and disallowance of expenses

Profession tax Profession tax, Penalty and 1,553,529/-

interest



Period to which the Forum where dispute

amount relates is pending

MVAT Act,2002 F.Y. 2007-2008 Jt.comm. of Sales tax

Income Tax Act,1961 A.Y. 2004-2005 CIT appeals of

Income tax

Income Tax A.Y. 2007-2008 commissioner of

Income tax appeal

profession Tax A.Y.2007-2008 Dy.comm. of Sales

Tax- appeals

10. At the end of the financial year, the company has neither accumulated losses nor has incurred any cash loss during the financial year and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of its dues to its financial institution, bank and debenture holder.

12. According to the information and explanations given to us, since the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, in our opinion, the company need not maintain relevant documents and record.

13. The company is not a chit fund or a nidhi / mutual benefit fun / society. therefore, the provisions of sub clause (a), (b), (c) and (d) of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

14. Based on our examination of the records and evaluation of the related internal controls, the company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. the aforesaid shares, securities, debentures and other investments have been held by the company in its own name, except to the extent of the exemption granted under Section 49 of the companies act, 1956.

15. The company has granted corporate Guarantees to Banks/ Financial institutions in respect of loans availed by its subsidiary companies. Based on the information and explanations given to us, we are of the opinion that the terms and conditions on which the guarantees are given are prima facie, not prejudicial to the interest of the company.

16. In our opinion, and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments.

18. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the companies act, 1956.

19. The company has issued unsecured debentures during the year. Since, these debentures are unsecured the company is not required to and has not created a charge in respect of these debentures.

20. The company has not raised any money through a public issue during the year. therefore, the provision of clause (xx) of paragraph 4 of the Order is not applicable to the company.

21. 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 explanation given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year nor have we been informed of such case by management. Sharp & Tannan Associates

Chartered Accountants

ICAI Registration no.109983W

By the hand of

Tirtharaj Khot

Place: Mumbai Partner

Date: may 7, 2011

Membership no.: 37457


Mar 31, 2010

We have audited the attached Balance Sheet of India Infoline Limited as at 31st March 2010, and Profit and Loss account and also 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 fnancial statements based on our audit

We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing he 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.

In accordance wih the provisions of Section 227 of the Companies Act, 1956, we report that:

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India under sub-section (4A) of section 227 of the companies Act, 1956, and on he basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the maters specified in paragraphs 4 and 5 of the said Order

2. Further o our comments in the Annexure referred to above, we report hat:

) 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;

) In our opinion, proper books of account as required by law have been kept by the Company so far as appears fom our examination of he books;

) The balance sheet, profit and oss account and also cash ow

statement dealt with by this report are n agreement wih he books of account;

v) In our opinion, the balance sheet, profit and loss account and also cash flow statement dealt with by this report comply with the accountng standards referred to in sub-section 3C) of Section 211 of he Companies Act, 1956; and

v) On the basis of written representations received by the Company from its Directors as on 31st March, 2010 and taken on record by the Board of Directors, we eport that none of the director is disqualified as on 31st March, 2010 from being appointed as a Director in terms of the clause (g) of sub section 1) of section 274 of he Companies Act, 1956;

n our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies and notes appearing thereon, give he information required by the Companies Act, 1956, n the manner so required and give a true and fair view n conformity wih he accountng prnciples generally accepted n India:

a. In the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010;

b. In the case of the profit and loss account of he profi or he year ended on that date; and

c. n the case of the cash flow statement of he cash fows for he year ended on that date.

1. a) The Company has maintained adequate records to show full

particulars, including quantitative details and situation of the fixed assets.

b) The Company has formulated a programme of physical verification of its fixed assets in a phased manner. In accordance with this program, a physical verification of certain fixed assets has been carried out by management during the year and there are no material discrepancies observed between assets physically verified and book balances. In our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets.

c) The Company has not disposed of any substantial par of its fixed assets so as to affect its going concern status.

2. The Company is not carrying on any manufacturing or trading activity. Therefore, the provisions of sub clause (a), (b), and c), of clause (ii) of paragraph 4 of the Order are not applicable to the Company.

3. a) The Company has granted loan o One Company and loan to

One Party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amounts involved during the year were Rs. 575,523,013/ and the year-end balance of loans granted to such Company / Party was Rs. 574,323,013/.

b) In our opinion, the rate of interest and other terms and conditions of such loan given is not, prima facie, prejudicial to the interest of the Company.

c) There are no stipulations as to repayment of prncipal and interest amounts.

d) There is no overdue amount in excess of Rs.l lakh n respect of loan granted to Companies listed in the register maintained under Section 301 of the Companies Act, 1956 since epayment schedule is not stipulated.

e) The Company has not taken any loans from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of sub clause (e), (f) and (g) of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business, for the purchase of fixed assets and sale of 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 neither come across nor have we been informed

of any continuing failure to corect major weaknesses in the aforesaid nternal contol systems.

5. a) In our opinion and according to the information and

explanations given to us, the particulars of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 of the Companies Act, 1956 and those brought to our notice, have been so entered. b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are not comparable since the prevailing market prices of such services, in view of the management are not eadily available.

6. The Company has not accepted any deposits from the public of the nature, which attracts the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules made there under. Therefore, the provision of clause (vi) of paragraph 4 of the Order is not applicable to the Company.

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

8. As per the information and explanations given to us, in respect of the class of industry the Company falls under, the maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies act, 1956. Therefore, the provision of clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9. a) According to the information and explanations given to us and

the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as and wherever applicable to the Company, with the appropriate authorities. Based on the information furnished to us, there are no undisputed statutory dues as on 31st March 2010, which are outstanding for a period exceeding six months from the date they became payable.

b) According to the information and explanations given to us and ecords of the Company examined by us, the particulars of sales ax/excise duty/service tax/income tax/custom duty/wealth ax/cess as at 31st March, 2010 which have not been

deposited on account of a dispute pending, and amount nvolved and the forum where dispute is pending is as under;

Name of the Nature of the Amount (Rs.) Period to Which Forum Where Statute Disputed Dues of Tax The Amount Relates Dispute is Pending MVAT Act, Delay in filing VAT Audit Report Rs. 563,342/- FY 2007-08 Dy. Comm. Of Sales Tax 2002 for the period 2007-2008 Income Tax Penalty Act,1961 proceeding u/s 271(1) (c) Rs. 106,680/- A.Y.2004-2005 CIT Appeals of income Tax Income Tax Disallowance of Depreciation,Rs. 7,025,888/- A.Y.2007-2008 Commissioner of income Tax 1961 Disallowance of Expenses u/s 14A Appeal and disallowance of expenses.

10. At the end of the financial year the Company has neither accumulated losses nor has incurred any cash loss during the financial year and in the immediately preceding financial year

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of its dues to its financial instituton, bank and debenture holders.

12. According to the information and explanations given to us, since the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, in our opinion, the Company need not maintain elevant documents and ecord.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of sub clause (a), (b), (c) and (d) of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. Based on our examination of the records and evaluation of he related nternal controls, the Company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. The aforesaid shares, securities, debentures and other investments have been held by the Company in its own name, except to the extent of the exemption granted under Section 49 of the Companies Act, 1956.

15. The Company has granted Corporate Guarantees to a Banks/Financial Institutions in respect of loans availed by its subsidiary companies. Based on the information and explanations given to us, we are of the opinion that the terms and conditions on which the guarantees are given are prima facie, not prejudicial to the interest of the Company.

16. According to the information and explanation given to us and on overall examination of books of accounts of the Company, we report hat he Company has not aised any terms oans during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we eport that no funds raised on short-term basis have been used for ong-term investments.

18. According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has issued unsecured debentures during the year. Since, these debentures are unsecured the Company is not required to and has not created a charge in respect of these debentures.

20. The Company has not raised any money through a public issue during the year Therefore, the provision of clause (xx) of paragraph 4 of the Order is not applicable to the Company.

21. 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 explanation given to us, we have neither come across any instance of material faud on or by the Company, noticed or reported during the year nor have we been informed of such case by management.

Sharp & Tannan Associates Chartered Accountants CAI Registration No.l09983W By the hand of Tirharaj Khot Place: Mumbai Partner Date: 24th Apr 2010 Membership No. 37457

 
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