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Auditor Report of Magma Fincorp Ltd.

Mar 31, 2017

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Magma Fincorp Limited (“the Company”), which comprise the balance sheet as at 31 March 2017, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

AUDITORS’ RESPONSIBILITY

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31 March 2017 and its profit and its 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, 2016 (“the Order”) issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the “Annexure A” a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) on the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer our separate Report in “Annexure B”; and

(g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 30(a) to the standalone financial statements;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contract

- Refer Note 30(c) to the standalone financial statements;

iii. there has been no delay in transferring amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with books of account maintained by the Company - Refer Note 41 to the financial statements.

The Annexure referred to in the Independent Auditor’s Report to the members of Magma Fincorp Limited (“the Company”) on the standalone financial statements for the year ended 31 March 2017, we report that:

(i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets during the year.

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, the periodicity of the physical verification is reasonable having regards to the size of the Company and the nature of its assets.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company, except for three cases. The gross block and the net block as at 31 March 2017 of those immovable properties whose title deeds are not in the name of the Company are Rs.1,818.00 lacs and Rs.1,258.96 lacs respectively.

(ii) The Company is a Non-Banking Finance Company (“NBFC”), primarily engaged in the business of asset financing. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable.

(iii) The Company has granted loans to one company covered in the register maintained under Section 189 of the Companies Act, 2013 (“the Act”).

a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the company listed in the register maintained under Section 189 of the Act, was not, prima facie, prejudicial to the interest of the Company.

b) In the case of the loans granted to the company listed in the register maintained under Section 189 of the Act, the borrower has been regular in the payment of the principal and interest as stipulated.

c) There is no overdue amount of the loan granted to the company listed in the register maintained under section 189 of the Act.

(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not undertaken any transaction in respect of loans, guarantees and securities covered under Section 185 of the Act. The Company has complied with Section 186(1) of the Act in relation to investments made by the Company. The remaining provisions related to Section 186 of the Act do not apply to the Company as it is an NBFC.

(v) The Company has not accepted any deposits from the public, except for deposits taken over by way of merger in the year ended 31 March 2007. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 73 to Section 76 or other relevant provisions of the Companies Act 2013, the rules framed there under and the directives issued by the Reserve Bank of India with regard to deposits accepted from the public. Accordingly, there has been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013, in respect of sale of power generated from windmills and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records. The Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Companies Act, 2013, for any of the other services rendered by the Company.

(vii) 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, value added tax, employees’ state insurance, cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except for delays ranging from 3 days to 32 days with respect to deposit of professional tax with appropriate authorities. Further, in two branches, deposit was not made due to pending registrations. As explained to us, the Company did not have any dues on account sales tax, customs duty, excise duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of provident fund, income tax, service tax, value added tax, employees’ state insurance, cess and other material statutory dues were in arrears, as at 31 March 2017, for a period of more than six months from the date they became payable, except for delay in deposit of professional tax incase of two branches from the date they became payable due to pending registration. As explained to us, the Company did not have any dues on account of sales tax, customs duty, excise duty.

b) According to the information and explanations given to us there are no material dues of cess and other material statutory dues which have not been deposited by the Company with the appropriate authorities on account of any disputes. However, according to the information and explanations given to us, the following dues of income tax, service tax and value added tax, have not been deposited by the Company on account of disputes:

(Rs. in Lacs)

Name of the Statute

Nature of

Amount

Paid under

Period to which

Forum where dispute is

Dues

Protest Amount

amount relates

pending

Income Tax Act, 1961

Income Tax

3,176.25

500.00

2012-13

ITAT, Kolkata

Income Tax Act, 1961

Income Tax

723.56

108.54

2013-14

CIT(A), Kolkata

Finance Act , 1994

Service Tax

208.00

93.00

2002-2003 to 2006-2007

CESTAT, EZB, Kolkata

West Bengal Value Added Tax Act, 2003

VAT

13.72

6.86

2008-2009

West Bengal Commercial Taxes Appellate and Revisional Board

West Bengal Value Added Tax Act, 2003

VAT

14.53

7.21

2009-2010

West Bengal Commercial Taxes Appellate and Revisional Board

Rajasthan Value Added Tax Act, 2003

VAT

2.10

1.10

2012-13 to

2013-14

Appellate Authority, Rajasthan

Jharkhand Value Added Tax Act, 2005

VAT

21.57

2.15

2006-2007 to 2009-2010

Sales Tax Tribunal, Jharkhand, Ranchi

Madhya Pradesh Value Added Tax Act,

VAT

133.75

2008-2009 to

Madhya Pradesh High Court,

2002

2009-2010

Jabalpur

Orissa Value Added Tax, 2004

VAT

68.89

11.48

2006- 2007 to 30 September 2012

Sales Tax Tribunal, Orissa

Delhi Value Added Tax

VAT

16.26

-

2012-13

Delhi Commissioner of Tax

Delhi Value Added Tax

VAT

33.11

2.59

2013-14

Sales Tax Tribunal, Delhi

West Bengal Value Added Tax

VAT

29.29

12.93

2013-14

Joint Commissioner, Kolkata

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or to debenture holders during the year. The Company did not have any borrowings from the government during the year.

(ix) In our opinion and according to the information and explanations given to us, the term loans and debentures were applied for the purpose for which the same were obtained. The Company has not raised any money by way of initial public offer during the year.

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

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Companies (Auditor’s Report) Order, 2016 is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosure specified under Section 133 of the Act, read with Rule 7 of the Company (Accounts) Rules, 2014.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment of shares or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with the director or persons connected with him. Accordingly, paragraph 3(xv) of the Companies (Auditor’s Report) Order, 2016 is not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and such registration has been obtained by the Company on 23 September 2008.

For B S R & Co. LLP

Chartered Accountants

Firm Registration No: 101248W/ W-100022

Jayanta Mukhopadhyay

Partner

Membership Number: 055757

Place: Kolkata Date: 11 May 2017


Mar 31, 2016

We have audited the accompanying standalone financial statements of Magma Fincorp Limited ("the Company"), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

AUDITORS'' RESPONSIBILITY

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31 March 2016 and its profit and its 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, 2016 ("the Order") issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) on the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer our separate Report in "Annexure B"; and

(g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statement - Refer note 30(a) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts - Refer note 30(c) to the standalone financial statements; and

iii. There has been no delay in transferring amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in the Independent Auditor''s Report to the members of Magma Fincorp Limited ("the Company") on the standalone financial statements for the year ended 31 March 2016:

(i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets during the year.

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, the periodicity of the physical verification is reasonable having regards to the size of the Company and the nature of its assets.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company, except for three cases. The gross block and the net block as at 31 March 2016 of those immovable properties whose title deeds are not in the name of the Company are Rs. 1,818.00 lacs and Rs. 1,291.12 lacs respectively.

(ii) The Company is a Non-Banking Finance Company ("NBFC"), primarily engaged in the business of asset financing. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable.

(iii) The Company has granted loans to one company covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Act").

a) I n our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the company listed in the register maintained under Section 189 of the Act, was not, prima facie, prejudicial to the interest of the Company.

b) In the case of the loans granted to the company listed in the register maintained under Section 189 of the Act, the borrower has been regular in the payment of the principal and interest as stipulated.

c) There is no overdue amount of the loan granted to the company listed in the register maintained under Section 189 of the Act.

(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not undertaken any transaction in respect of loans, guarantees and securities covered under Section 185 of the Act. The Company has complied with Section 186(1) of the Act in relation to investments made by the Company. The remaining provisions related to Section 186 of the Act do not apply to the Company as it is an NBFC.

(v) The Company has not accepted any deposits from the public, except for deposits taken over by way of merger in the year ended 31 March 2007. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions under Section 73 to Section 76 of Companies Act, 2013, the rules framed there under and the directives issued by the Reserve Bank of India with regard to deposits accepted from the public. Accordingly, there has been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013, in respect of sale of power generated from windmills and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records. The Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Companies Act, 2013, for any of the other services rendered by the Company.

(vii) (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, value added tax, employees'' state insurance, cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except for delays ranging from 1 day to 91 days with respect to deposit of professional tax with appropriate authorities due to pending registrations. This was subsequently regularized during the year ended 31 March 2016, except for one branch. As explained to us, the Company did not have any dues on account sales tax, customs duty, excise duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of provident fund, income tax, service tax, value added tax, employees'' state insurance, cess and other material statutory dues were in arrears, as at 31 March 2016, for a period of more than six months from the date they became payable. As explained to us, the Company did not have any dues on account of sales tax, customs duty, excise duty.

b) According to the information and explanations given to us there are no material dues of cess and other material statutory dues which have not been deposited by the Company with the appropriate authorities on account of any disputes. However, according to the information and explanations given to us, the following dues of income tax, service tax and value added tax, have not been deposited by the Company on account of disputes:

(Rs. in Lacs)

Name of the Statute Nature of Amount Paid under Protest Period to which amount Forum where dispute is pending Dues Amount relates

Income Tax Act, 1961 Income Tax 3,327.45 - 2013-14 Commissioner of Income Tax (Appeals), Kolkata

Finance Act, 1994 Service Tax 207.00 9300 2002- 2003 To 2006-2007 CESTAT, EZB, Kolkata

West Bengal Value VAT 13.72 6.86 2008-2009 West Bengal Commercial Taxes Appellate Added Tax Act, 2003 and Revisional Board

West Bengal Value VAT 14.53 7.21 2009-2010 West Bengal Commercial Taxes Appellate Added Tax Act, 2003 and Revisional Board

Rajasthan Value Added VAT 42.60 18.46 2006-2007 to 2012-2013 Tax Board, Rajasthan Tax Act, 2003 (till July 2012)

Rajasthan Value Added VAT 2.85 1.05 2013-14 to 2014-15 (till Deputy Commissioner Appeal, Rajasthan Tax Act, 2003 December 2014)

Jharkhand Value Added VAT 21.57 2.15 2006-2007 To 2009-2010 Sales Tax Tribunal Jharkhand, Ranchi Tax Act, 2005

Madhya Pradesh Value VAT 133.75 - 2008-2009 to 2009-2010 Madhya Pradesh High Court, Jabalpur Added Tax Act, 2002

Orissa Value Added Tax, VAT 68.89 11.48 2006-2007 to 30 Sales Tax Tribunal, Orissa 2004 September 2012

Delhi Value Added Tax VAT 16.26 - 2012-13 Sales Tax Tribunal,Delhi

Delhi Value Added Tax VAT 33.11 - 2013-14 Sales Tax Tribunal Delhi

Uttar Pradesh Value VAT 2,176.00 - 2013-14 Deputy Commissioner Appeal, Uttar Added Tax Pradesh

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or to debenture holders during the year. The Company did not have any borrowings from the government during the year.

(ix) In our opinion and according to the information and explanations given to us, the term loans and debentures were applied for the purpose for which the same were obtained. The Company has not raised any money by way of initial public offer during the year.

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

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Companies (Auditor''s Report) Order, 2016 is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv) The Company has made preferential allotment of shares during the year as per Section 42 of the Act. According to the information and explanations given to us and based on our examination of the records of the Company, the amounts raised have been used for the purpose for which the funds were raised. The Company has not made any private placement of fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non- cash transactions with the director or persons connected with him. Accordingly, paragraph 3(xv) of the Companies (Auditor''s Report) Order, 2016 is not applicable.

(xvi) The Company is required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and such registration has been obtained by the Company on 23 September 2008.



For B S R & Co. LLP

Chartered Accountants Firm Registration No: 101248W/ W-100022



Akeel Master

Partner

Membership Number: 046768

Mumbai, 12 May 2016


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Magma Fincorp Limited ("the Company"), which comprise the balance sheet as at 31 March 2014, the statement of Profit and loss of the Company and the cash flow statement of the Company 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") 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 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) 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"), as amended, 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 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; and

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, 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, and taken on record by the Board of Directors, we report that 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 Act.

The Annexure referred to in our report to the members of Magma Fincorp Limited ("the Company") for the year ended 31 March 2014. We report that:

(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 program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(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 Non-Banking Finance Company, primarily engaged in asset financing. Accordingly, it does not hold any physical inventories in the normal course of business. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, 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 sale of services. The activities of the Company do not involve purchase of inventory and sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(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 (v)(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, except for deposits taken over by way of merger in the year ended 31 March 2007. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or other relevant provisions of the Act, the rules framed there under and the directives issued by the Reserve Bank of India with regard to deposits accepted from the public. Accordingly, there have been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)( d) of the Act, in respect of sale of power generated from windmills and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records. 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 other services rendered 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, employees'' State Insurance, Investor education and Protection Fund, Income-tax, Sales- tax, Wealth tax, Service tax and other material statutory dues have generally been 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 Customs duty and excise duty.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, employees'' State Insurance, Investor education and Protection Fund, Income-tax, Sales-tax, Wealth 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. As explained to us, the Company did not have any dues on account of Customs duty and excise duty.

(b) According to the information and explanations given to us, there are no material dues of Income tax and Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. As explained to us,

the Company did not have any dues on account of Customs duty and excise duty. However, according to information and explanations given to us, the following dues of Sales tax and Service tax have not been deposited by the Company on account of disputes:

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

Chapter V of Service 115.00 2002 - 2003 CESTAT, EZB, the Finance tax to Kolkata Act, 1994 demanded 2006 - 2007

Chapter V of Service tax 60.49 2002 - 2003 CESTAT, EZB, the Finance demanded to 2006 - Kolkata Act, 1994 2007

West Bengal VAT 6.86 2006 - 2007 Joint Value Added demanded Commissioner of Tax Act, 2003 Sales Tax, Kolkata

(South) Circle West Bengal VAT 7.21 2007 - 2008 West Bengal Value Added demanded Commercial Tax Act, 2003 Taxes Appellate and Revisional Board

Rajasthan VAT 24.14 2006 - 2007 Deputy Value Added demanded to 2012 - 20l3 Commissioner, Tax Act 2003 (till July 2012) Rajasthan

Jharkhand, VAT 19.42 2006 - 2007 Joint Value Added demanded to 2009 - Commissioner Tax Act, 2005 2010 of Commercial Taxes (Appeals), Jamshedpur

Madhya VAT 133.75 2008 - 2009 Madhya Pradesh Pradesh Value demanded and High Court, Added Tax 2009 - 2010 Jabalpur Act, 2002

Orissa Value VAT 57.41 1 April Joint Added Tax demanded 2007 to 30 Commissioner Act, 2004 September of Commercial 2012 Taxes (Appeals), Cuttack

(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, any financial institutions 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 the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. 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 or financial institutions 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, other than funds temporarily invested pending utilization of the funds for intended use.

(xvii) In terms of the Guidelines of Reserve Bank of India on Asset Liability Management System for Non Banking Financial Company (''NBFC''), the Company regularly carried out an analysis of its assets and liabilities on the basis of their residual maturity and reprising patterns. Our examination of the same indicates that the maturity gaps observed in the asset liability management are within the limits prescribed by Reserve Bank of India.

(xviii) The Company has not made any preferential allotment of shares to companies, firms or 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 secured debentures issued during the year.

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the general auditing practices in India, and according to the explanation and information given to us, thirty-eight instances of fraud on the Company were identified and reported during the year. We have been further informed that the frauds on the Company were mainly related to falsification of loan / valuation documents and collusion between its employees, borrowers and vendors. The aggregate amount of such frauds is Rs. 4.65 crores. As at 31 March 2014, Rs. 1.07 crores was recovered by the Company and the balance has been written off in the statement of Profit and loss.

For B S R & Co. LLP,

Chartered Accountants

Firm''s Regn. No. 101248W

Akeel Master

Partner

Membership No. 046768

Mumbai, 07 May 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Magma Fincorp Limited ("the Company"), which comprise the balance sheet as at 31 March 2013, the statement of profit and loss of the Company for the year then ended, the cash flow statement of the Company 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 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 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.

Report on Other Legal and Regulatory Requirements

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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 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; and

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.

e) on the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 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 our report to the members of Magma Fincorp Limited (''the Company'') for the year ended 31 March 2013. We report that:

(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 program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(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 Non-Banking Finance Company, primarily engaged in asset financing. Accordingly, it does not hold any physical inventories in the normal course of business. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, 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 sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(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 (v)(a) above and exceeding the value of Rs 5 lakh 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, except for deposits taken over by way of merger in the year ended 31 March 2007. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or other relevant provisions of the Act, the rules framed there under and the directives issued by the Reserve Bank of India with regard to deposits accepted from the public. Accordingly, there have been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1 )(d) of the Act, in respect of sale of power generated from windmills and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records. 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 other services rendered 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, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have generally been 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 Customs duty and Excise duty.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth 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. As explained to us, the Company did not have any dues on account of Customs duty and Excise duty.

(b) According to the information and explanations given to us, there are no material dues of Income tax and Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. As explained to us, the Company did not have any dues on account of Customs duty and Excise duty. However, according to information and explanations given to us, the following dues of Sales tax and Service tax have not been deposited by the Company on account of disputes:

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

Chapter V of the Service tax 115.00 2002-2003 to CESTAT, EZB, Finance Act, 1994 demanded 2006 - 2007 Kolkata

West Bengal Value VAT 6.71 2006 - 2007 Joint Commissioner of Added Tax Act, 2003 demanded Sales Tax, Kolkata (South) Circle

West Bengal Value VAT 7.10 2007-2008 West Bengal Commercial Added Tax Act, 2003 demanded Taxes Appealate and Revisional Board

West Bengal Value VAT 10.67 2008-2009 West Bengal Commercial Added Tax Act, 2003 demanded Taxes Appealate and Revisional Board

West Bengal Value VAT 12.60 2009-2010 Joint Commissioner of Added Tax Act, 2003 demanded Sales Tax, Kolkata (South) Circle

Jharkhand, Value VAT 19.42 2006-2007 to Joint Commissioner of Added Tax Act, 2005 demanded 2009-2010 Commercial Taxes (Appeals), Jamshedpur

Madhya Pradesh Value VAT 133.75 2008-2009 and Madhya Pradesh High Added Tax Act, 2002 demanded 2009-2010 Court, Jabalpur

Orissa Value Added VAT 64.30 1 April 2007 to Joint Commissioner of Tax Act, 2004 demanded 30 September 2012 Commercial Taxes (Appeals), Cuttack

(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, any financial institutions 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 the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. 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 or financial institutions 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, other than funds temporarily invested pending utilization of the funds for intended use.

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

(xviii) The Company has not made any preferential allotment of shares to companies, firms or 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 secured 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, there have been three instances of fraud on the Company exceeding an internal monetary threshold limit. These frauds relate to collusions between its employees, borrowers and vendors. The aggregate amount of such frauds is Rs 649 Lacs. The Company has taken suitable action against the parties involved and made appropriate provisions. The Company ultimately expects to significantly recover the amounts involved.

For B S R & Co. For S. S. Kothari & Co.

Chartered Accountants Chartered Accountants

Firm''s Registration No.: 101248W Firm''s Registration No.: 302034E

Zubin Shekary R. N. Bardhan

Partner Partner

Membership No.: 048814 Membership No.: 017270

Kolkata Kolkata

08 May 2013 08 May 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Magma Fincorp Limited ("the Company") as at 31 March 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company 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 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.

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 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.

Without qualifying our opinion, we draw attention to note 25(v) of the financial statements, regarding change in method of accounting for business origination costs and upfront incomes, including on assignment of receivables, effective 1 April 2011, and which has a significant impact on the financial statements for the year ended 31 March 2012. This change in policy and method of accounting is necessary to reflect the current business model of the Company. Pursuant to the same income from assignment of receivables aggregating to Rs 15,394 Lacs for the year ended 31 March 2012, being income relating to future periods will be recognised over the tenor of the contracts assigned. Similarly, net business origination costs aggregating to Rs 6,554 Lacs, for the year ended 31 March 2012, have been deferred and amortised over the tenor of the contracts originated.

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 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 the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable;

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

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that 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 program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

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 Non-Banking Finance Company, primarily engaged in asset financing. Accordingly, it does not hold any physical inventories in the normal course of business. Thus, paragraph 4(ii) of the Order is not applicable.

iii) a) The Company has granted a loan to a body corporate covered in the register maintained under section 301 of the Companies Act, 1956 ("the Act"). The maximum amount outstanding during the year was Rs 18,389 Lacs and the year-end balance of such loan amounted to Rs 4,800 Lacs. Other than the above, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under section 301 of the Act.

b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

c) In the case of the loan granted to the body corporate listed in the register maintained under section 301 of the Act, the borrower has been regular in repaying the principal amounts as stipulated and in the payment of interest.

d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under section 301 of the Act.

e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

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 sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

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

(v)(a) above and exceeding the value of Rs 5 lakh 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, except for deposits taken over by way of merger in the year ended 31 March 2007. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or other relevant provisions of the Act, the rules framed there under and the directives issued by the Reserve Bank of India with regard to deposits accepted from the public. Accordingly, there have been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)(d) of the Act, in respect of sale of power generated from windmills and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records. The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Act for any of the other services rendered 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, Employees' State Insurance, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. The Company has not been regular in depositing Professional Tax during the year with appropriate authorities in one State, though the delays in deposit have not been serious. As explained to us, the Company did not have any dues on account of Customs duty and Excise duty.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax 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. As explained to us, the Company did not have any dues on account of Customs duty and Excise duty,

b) According to the information and explanations given to us, there are no material dues of Income tax, Wealth tax, and Cess which have not been deposited with the appropriate authorities on account of any dispute. As explained to us, the Company did not have any dues on account of Customs duty and Excise duty. However, according to information and explanations given to us, the following dues of Sales tax and Service tax have not been deposited by the Company on account of disputes:

Name of the Natuer Amount Period to Forum where Statue of dues (Rs in Lacs) which the dispute is amount pending relates

Chapter V of Service 115.00 2002-2003 CESTAT, EZB, Kolkata the Finance Tax to Act, 1994 demanded 2005-2006

West Bengal VAT 17.40 2006-07 Jt. Commissioner of Value Added demanded and Sales Tax, Kolkata Tax Act, 2003 2008-09 (South) Circle

West Bengal VAT 7.10 2007-2008 West Bengal Value Added demanded Commercial Taxes Tax Act, 2003 Appealate and Revisional Board

Jharkhand, VAT 19.42 2006-2007 Jt. Commissioner of Value Added demanded to Commercial Taxes Tax Act, 2005 2009-2010 (Appeals), Jamshedpur

Madhya Pradesh VAT 121.60 2008-2009 Madhya Pradesh High Value Added demanded Court, Jabalpur Tax Act, 2002

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, any financial institutions or debenture holders.

xii) In our opinion and according to the information and explanations given to us, the Company has maintained adequate records in cases where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

xv) The Company has given guarantees for loans taken by others from banks or financial institutions. 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 or financial institutions 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, other than funds temporarily invested pending utilisation of the funds for intended use.

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

xviii) According to the information and explanations given to us, except for, preferential allotment of 10,000,000 equity shares on conversion of Optionally Convertible Equity Warrants to a Company covered in the register maintained under section 301 of the Act, the Company has not made any preferential allotment of shares to companies, firms or parties covered in the register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company,

xix) According to the information and explanations given to us, the Company has created security or charge in respect of secured debentures issued during the year, except in case of Non- Convertible Debentures amounting to Rs 31,300 Lacs for which the Company is in the process of creation of securities,

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 material fraud on or by the Company has been noticed or reported during the course of our audit,

For B S R & Co. For S. S. Kothari & Co.

Chartered Accountants Chartered Accountants

Firm's Registration No.: 101248W Firm's Registration No.: 302034E

Zubin Shekary R. N. Bardhan

Partner Partner

Membership No.: 048814 Membership No.: 017270

Kolkata Kolkata

26 April 2012 26 April 2012


Mar 31, 2011

1) We have audited the attached Balance Sheet of Magma Fincorp Limited (the Company) as at 31st March, 2011, and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, as amended (the Order) and on the basis of such checks 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.

4) Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

b) In our opinion, 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes appearing on the Schedule 16, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii) in the case of Profit and Loss Account, of the profit of the Company 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.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets of the Company are physically verified by the management in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The physical verification conducted and the confirmation so obtained during the year did not reveal any material discrepancies between the book records and the physical inventory.

c) The fixed assets disposed off during the year, do not constitute substantial part of the fixed assets of the Company and such disposal in our opinion, has not affected the going concern status of the Company.

ii) a) The inventories have been physically verified during the year by the management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii) a) The Company has granted unsecured loans to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Such loan was granted to one party and amount outstanding at the end of the year is Nil. The maximum amount outstanding on aggregate basis during the year is Rs. 4,516.05 lacs. The Company has not taken unsecured loans from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted are not prima facie prejudicial to the interest of the Company.

c) The payment of principal amounts and interest are regular.

d) There is no overdue amount in respect of loans granted 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 are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets, rendering of services and sale of power. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas and accordingly the question on commenting on whether there is a continuing failure to correct major weakness in the internal control system of the company does not arise.

v) a) According to the information and explanations given by the management, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been duly entered therein.

b) In our opinion, the transaction in respect of any such parties during the financial year have been made at prices, which are reasonable, having regard to the prevailing market price at the relevant time.

vi) The Company does not accept any deposits from public and it has been categorised as Non-Banking Finance (Non- Deposit Accepting or Holding) Company (NBFC-ND) by the Reserve Bank of India. However, in respect of Deposits taken over in the financial year 2006-07 by way of merger, the Company has complied with directives issued by the Reserve Bank of India.

vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system which is commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost record under section 209(1)(d) of the Companies Act, 1956 in respect of generation of electricity from wind mill to which the said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix) a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, VAT, Service Tax, Wealth-tax, Custom Duty, Cess and other statutory dues, if any, to the extent applicable, with appropriate authorities.

b) At the last day of the financial year, there was no amount outstanding in respect of undisputed Income- tax, Sales-tax, VAT, Service Tax, Wealth-tax, and other statutory dues, if any, to the extent applicable, which were due for a period of more than six months from the date they became payable.

c) According to the records of the Company, following statutory dues have not been deposited on account of dispute:

Name of the Nature Amount Financial Forum where Statute of dues (Rs.in Year to dispute is lacs) which the pending amount relates

Chapter V of Service 300.65 2002-03 CESTAT, EZB, Kolkata Finance Act, Tax to 1994 2006-07

West Bengal VAT 20.89 2005-06 Jt. Commissioner of Value Added to Sales Tax, Kolkata Tax Act, 2003 2007-08 (South) Circle

Also refer to Note 2 (xx) (a), (b) & (c), Schedule 16 to Accounts.

x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year covered by our audit and the immediately preceding financial year.

xi) As per the information and explanations given by the management and as verified by us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, bank or debenture holders.

xii) Based on our examination of documents and records, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society. Therefore, the provisions of the clause 4(xiii) of the Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

xv) According to information and explanations given to us, the Company has given guarantee for loans taken by its subsidiary from banks or financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi) In our opinion, Term Loans have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short term basis have not been used during the year for long term investment and vice versa.

xviii) During the year, the Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has made preferential allotment of Optionally Convertible Equity Warrants to one of the promoter entities covered in the register maintained under section 301 of the Companies Act, 1956 and the terms of the issue are not prima facie prejudicial to the interest of the Company.

xix) According to the information and explanations provided by the management, security or charge has been created in respect of debentures issued during the year.

xx) The Company has not raised any money by way of public issue during the year. Therefore, the provision of clause 4(xx) of the Order is not applicable.

xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For S. S. KOTHARI & CO. ICAI Firm Registration No. 302034E India Steamship House Chartered Accountants

21, Old Court House Street

Kolkata - 700 001. R. N. Bardhan

Partner Dated: 18 April, 2011 Membership No.17270


Mar 31, 2010

1) We have audited the attached Balance Sheet of Magma Fincorp Limited (the Company) as at 31 March, 2010, and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, as amended (‘the Order) and on the basis of such checks 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.

4) Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

b) In our opinion, 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors, as on 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 a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes appearing on the Schedule 16, 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 Balance Sheet, of the state of affairs of the Company as at 31 March, 2010;

ii) in the case of Profit and Loss Account, of the profit of the Company 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.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets of the Company are physically verified by the management in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The physical verification conducted and the confirmation so obtained during the year did not reveal any material discrepancies between the book records and the physical inventory.

c) The fixed assets disposed off during the year, do not constitute substantial part of the fixed assets of the Company and such disposal in our opinion, has not affected the going concern status of the Company.

ii) a) The inventories have been physically verified during the year by the management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii) a) The Company has granted unsecured loans to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount of such loans granted to two parties and outstanding at the end of the year is Rs. 684.92 lacs. The maximum amount outstanding on aggregate basis during the year is Rs. 2,344.78 lacs.

b) The Company has taken unsecured loans from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount of such loans taken from one party and outstanding at the end of the year was nil. The maximum amount outstanding on aggregate basis during the year was Rs. 6.75 lacs.

c) In our opinion, the rate of interest and other terms and conditions on which loans have been granted or taken are not prima facie prejudicial to the interest of the Company.

d) The payment of principal amounts and interest is regular.

e) There is no overdue amount in respect of loans granted or taken 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 are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets, rendering of services and sale of power. During the course of our audit, no major weakness has been noticed in the internal controls.

v) a) According to the information and explanations given by the management, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been duly entered therein.

b) In our opinion, the transaction in respect of any such parties during the financial year have been made at prices, which are reasonable, having regard to the prevailing market price at the relevant time.

vi) The Company does not accept any deposits from public and it has been categorised as Non-Banking Finance (Non- Deposit Accepting or Holding) Company (NBFC-ND) by the Reserve Bank of India. However, in respect of Deposits taken over in the financial year 2006-07 by way of merger, the Company has complied with directives issued by the Reserve Bank of India. vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system which is commensurate with the size and nature of its business. viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost record under section 209(1)(d) of the Companies Act, 1956 in respect of generation of electricity from wind mill to which the said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. ix) a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, VAT, Service Tax, Wealth-tax, Custom Duty, Cess and other statutory dues, if any, to the extent applicable, with appropriate authorities.

b) At the last day of the financial year, there was no amount outstanding in respect of undisputed Income- tax, Sales-tax, VAT, Service Tax, Wealth-tax, and other statutory dues, if any, to the extent applicable, which were due for a period of more than six months from the date they became payable.

c) According to the records of the Company, following statutory dues have not been deposited on account of dispute:

Name of the Nature Amount Financial Forum where Statute of dues (Rs.in Year to dispute is lacs) which the pending amount relates

Income Tax Income Tax 9.59 1995-96 Income Tax Act, 1961 Appellate Tribunal

Income Tax Income Tax 12.32 1997-98 Income Tax Act, 1961 Appellate Tribuna

Also refer to Note 2 (xxii)(a) & (b), Schedule 16 to Accounts in respect of Service Tax and Fringe Benefit Tax.

x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year covered by our audit and the immediately preceding financial year.

xi) As per the information and explanations given by the management and as verified by us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, bank or debenture holders.

xii) Based on our examination of documents and records, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/Society. Therefore, the provisions of the clause 4(xiii) of the Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4

(xiv) of the Order are not applicable.

xv) According to information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi) In our opinion, Term Loans have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short term basis have not been used during the year for long term investment and vice versa.

xviii) During the year, the Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to the information and explanations provided by the management, security or charge has been created in respect of debentures issued during the year.

xx) The Company has not raised any money by way of public issue during the year. Therefore, the provision of clause 4(xx) of the Order is not applicable.

xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.



For S. S. KOTHARI & CO. India Steamship House Chartered Accountants 21, Old Court House Street Kolkata - 700 001. R. N. Bardhan Partner Membership No.17270 Dated: 31 May, 2010 ICAI Firm Registration No. 302034E

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