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Auditor Report of Reliance Capital Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Reliance Capital Limited ("the Company "), which comprise the balance sheet as at March 31, 2015, the statement of profit and loss, cash flow statement for the year then ended, and a summary of 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 there under.

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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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 March 31, 2015, 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, 2015 ("the Order ") issued by the Central Government of India in terms of sub-section (11) of section 143 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 give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) 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 as at March 31, 2015 on its standalone financial position in its standalone financial statements-Refer Note No. 43 (a) (ii) to the standalone financial statements;

ii) the Company has made adequate provision for the year ended March 31, 2015, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts-Refer Note No. 40 (XVI) to the standalone financial statements; and

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

Annexure to the Independent Auditors'' Report on the Standalone Financial Statement

(Referred to in our report of even date) (i) In respect of its fixed assets:

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

b. The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, 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.

(ii) The Company is a Systemically Important Non-deposit taking Non-Banking Financial Company which is primarily engaged in lending and investing activities. Accordingly, Company''s business does not involve inventories. Thus, paragraph 3 (ii) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, during the year the Company has not granted any loans secured/unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Thus, paragraph 3 (iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The nature of the Company''s business is such that it does not involve purchase of inventories and sale of goods. In our opinion and accordingly to the information and explanations given to us, there is no continuing failure to correct major weaknesses in the internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company is a Systemically Important Non-deposit taking Non-Banking Financial Company, therefore paragraph 3 (v) of the Order is not applicable to the Company.

(vi) According to the information and explanations given to us, the Central Government has not specified for maintenance of cost records under sub section (1) of Section 148 of the Companies Act, 2013 in respect of activities carried on by the Company. Thus, paragraph 3 (vi) of the Order is not applicable to the Company.

(vii) In respect of statutory dues:

a) 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 generally been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues except in case of professional tax in which there were few delays in payment of the said dues. Further, there are no undisputed amounts payable outstanding as at March 31, 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess which have not been deposited on account of any dispute, except in respect of sales tax under Gujarat Sales Tax Act, 1969 of Rs. 4,75,916 for the year 2001-02 which is pending before the Gujarat Sales Ta x Tribunal, Ahmadabad and sales tax under Madhya Pradesh General Sales Tax Act, 1958 of Rs. 4,30,472 for the year 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I.

c) According to the information and explanations given to us, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company does not have 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.

(ix) Based on our audit procedures and as per information and explanations given by management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders as at March 31, 2015.

(x) 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.

(xi) 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 except in case where loans amounting to Rs. 95 crore have been taken towards the year end which were lying in bank accounts at the year end, and were subsequently utilized for the purpose for which loans have been taken.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, nor have we been informed of any such case by the management.

For Chaturvedi & Shah For B S R & Co. LLP

Chartered Accountants Chartered Accountants

Firm Reg. No: 101720W Firm Reg. No: 101248W/

W-100022

Vijay Napawaliya Akeel Master

Partner Partner

Membership No: 109859 Membership No: 046768

Mumbai Mumbai

May 29, 2015 May 29, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Reliance Capital Limited (''the Company''), which comprise the balance sheet as at March 31, 2014, the statement of profit and loss and the cash fow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, the financial performance and the cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors'' Report) Order, 2003, as amended by ''the Companies (Auditors'' Report) (Amendment) Order, 2004 (''the Order''), 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 give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the 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, the statement of profit and loss and the cash fow 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 fow statement comply with the Accounting Standards notifed under the Companies Act, 1956 read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the board of directors, none of the directors is disqualifed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure to the Independent Auditors'' Report on the Financial Statement (Referred to in our report of even date) (i) In respect of its fixed assets:

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

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

(c) As per information and explanations given to us, during the year, the Company has not disposed off any substantial part of fixed assets that would affect the going concern assumption.

(ii) The Company is a service company, primarily engaged in lending and investing activities. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loan secured/unsecured to/from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses (iii) (a) to (iii) (g) of paragraph 4 of the Order are not applicable to the Company.

(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. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section. Accordingly, clause (v) of the Order is not applicable to the Company.

(vi) The Company has not accepted deposits from public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Act, and rules framed there under are not applicable for the year under audit.

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

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Act, in respect of activities carried on by the Company. Hence the provisions of clause 4 (viii) of the Order is not applicable to 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, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, except in the case of Professional Tax there were a few delays in payment of the said dues. According to the information and explanations given to us, there are no undisputed amounts payable outstanding as at March 31, 2014 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no such statutory dues, which have not been deposited on account of any dispute, except in respect of sales tax under Gujarat Sales Tax Act, 1969 of Rs. 4,75,916 for the period 2001-02 which is pending before the Gujarat Sales Tax Tribunal, Ahmedabad and sales tax under Madhya Pradesh General Sales Tax Act, 1958 of Rs. 4,30,472 for the period 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I .

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

(xi) Based on our audit procedures and the information and explanations given by management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained by the Company in respect of loans and advances granted 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, a nidhi or a mutual benefit society. Therefore, the provisions of clause 4 (xiii) of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures, and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name except certain securities amounting to Rs. 9 crore which are pledged by the subsidiary company for their margin requirements.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given by management, in our opinion the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

(xvi) 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 except in a case where the loans amounting to Rs. 350 crore have been taken towards the year end which was lying in bank account at the year end and was subsequently utilized for the purpose for which loans have been taken.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at March 31, 2014, no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to a company, covered in the register maintained under Section 301 of the Act.

(xix) According to information and explanations given to us, the Company has created securities and / or charges in respect of secured debentures issued and redeemed during the year.

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

(xxi) During the course of our examination of the books and records of the Company, and according to the information and explanations given to us, no fraud on or by the Company, noticed or reported during the course of our audit.

For Chaturvedi & Shah For BSR & Co. LLP

Chartered Accountants Chartered Accountants

Firm Reg. No: 101720W Firm Reg. No: 101248W

Vijay Napawaliya Akeel Master

Partner Partner

Membership No: 109859 Membership No: 046768

Mumbai Mumbai

Dated: May 2, 2014 Dated: May 2, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Reliance Capital Limited (''the Company''), which comprise the balance sheet as at 31 March 2013, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, the financial performance and the 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.

Auditors'' Responsibility

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

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

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

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to Note 29(I) of the financial statements regarding accounting treatment prescribed in the Scheme of Amalgamation approved by the Honourable High Court of Bombay on March 22, 201 3 (''the Scheme''), pursuant to which, Emerging Money Mall Limited and Reliance Equities International Private Limited (the ''transferor companies'') has been amalgamated with the Company with an appointed date of March 31, 2013. Pursuant to the above Scheme, all assets and liabilities of the transferor companies have been recorded in the books of the Company at their respective fair values and the net excess arising on transfer of assets & liabilities of the transferor companies of Rs. 915 crore is credited to the Capital Reserve. According to the aforesaid Scheme, the total investment in the equity shares and the preference shares of the transferor companies amounting to Rs. 680 crore has been written-off in the statement of profit and loss in preference to cancelling the said investments.

The board of directors of the Company has identified such amount of Rs. 680 crore as an exceptional item and has withdrawn an equivalent amount from general reserve and credited in the statement of profit and loss as permitted by an earlier Scheme of Amalgamation approved by the Honourable High Court of Bombay on April 29, 201 1 ("the 2011 Scheme") of Reliance Commercial Finance Private Limited which permits the Company to adjust losses/write-off identified by the board of directors as exceptional items against the General Reserve of the Company Had both the Schemes mentioned above, not prescribed the above accounting treatment, the withdrawal of equivalent amount from the general reserve would have not been done The above accounting treatment has no impact on profit before tax for the year. Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditors'' Report) Order, 2003 (''the Order''), as amended by ''the Companies (Auditors'' Report) (Amendment) Order, 2004'', 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 give 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, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the balance sheet, the statement of profit and loss and the cash flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on 31 March 2013, and taken on record by the board of directors, none of the directors is 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 Act.

(Referred to in our report of even date)

(i) In respect of its fixed assets:

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

(b) The Company has a program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In 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) As per information and explanations given to us, during the year, the Company has not disposed off any substantial part of fixed assets that would affect the going concern.

(ii) The Company is a service company, primarily engaged in lending and investing activities. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loan secured/unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1 956. Accordingly, provisions of clauses (iii) (a) to (iii) (g) of paragraph 4 of the Order are not applicable to the Company

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

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1 956 that need to be entered in the register required to be maintained under that section. Accordingly, clause (v) of the Order is not applicable to the Company

(vi) The Company has not accepted deposits from public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Act, and rules framed there under are not applicable for the year under audit.

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

(viii) According to the information and explanations given to us, The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Act, in respect of activities carried on by the Company. Hence the provisions of clause 4 (viii) of the Order is not applicable to 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, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund ,Investor Education Protection Fund, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, except in the case of Professional Tax there were a few delays in payment of the said dues. According to the information and explanations given to us, there are no undisputed amounts payable outstanding as at 31 March 2013 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no such statutory dues, which have not been deposited on account of any dispute, except in respect of sales tax under Gujarat Sales Tax Act, 1 969 of Rs. 4,75,916 for the period 2001-02 which is pending before the Gujarat Sales Tax Tribunal, Ahmedabad and sales tax under Madhya Pradesh General Sales Tax Act, 1 958 of Rs. 4,30,472 for the period 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I .

(x) The Company neither has accumulated losses nor has it incurred any cash losses during the current financial year and in the immediately preceding financial year,

(xi) Based on our audit procedures and the information and explanations given by management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained by the Company in respect of loans and advances granted 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, a nidhi or a mutual benefit society. Therefore, the provisions of clause 4 (xiii) of the Order is not applicable to the Company

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures, and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given by management, in our opinion the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company

(xvi) 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 except in a case where the loan amounting to Rs. 25 crore has been taken towards the year end which was lying in bank account at the year end and was subsequently utilized for the purpose for which loan has been taken.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at March 31 2013, no funds raised on short- term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to a company, covered in the register maintained under Section 301 of the Act.

(xix) The Company has created securities and / or charges in respect of secured debentures issued and redeemed during the year except in case of Non Convertible Debentures amounting to Rs. 567 crore for which the Company is in the process of creation of securities.

(xx) The Company has not raised any money by way of public issue during the year,

(xxi) During the course of our examination of the books and records of the Company and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year, except in case of loans pertaining to commercial finance amounting to Rs. 6 crore, which was identified by management and reported to the RBI. As at 31 March 2013, Rs. 2 crore was recovered by the Company and the balance was provided for/written-off in the statement of profit and loss.

For Chaturvedi & Shah For B S R & Co.

Chartered Accountants Chartered Accountants

Firm Reg. No: 101720W Firm Reg. No: 101248W

Vijay Napawaliya Manoj Kumar Vijai

Partner Partner

Membership No: 109859 Membership No: 046882

Mumbai Mumbai

Dated: May 16, 2013 Dated: May 16, 2013


Mar 31, 2012

We have audited the attached balance sheet of Reliance Capital Limited ('the Company'), as at March 31, 2012, the statement of profit and loss and the cash fow 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 from material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (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 specifed in paragraphs 4 and 5 of the said order.

2. Without qualifying our report, we draw your attention to Note 29 (III) (b) of the financial statements, regarding the Scheme of Amalgamation ('the Scheme') sanctioned by the Hon'ble High Court of Judicature at Bombay, the Scheme permits the Company to adjust expenses and/or losses identifed by Board of Directors as exceptional items, which are required to be debited to the Statement of profit and Loss by a corresponding withdrawal from General Reserve, which is considered to override the relevant provisions of Accounting Standard 5 (AS-5) 'Net profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies'. Accordingly, the Company has identifed loss on sale of investments during the year of Rs. 149 crore, as in the opinion of the Board, such loss are considered to be of an exceptional items have been met by corresponding withdrawal from General Reserve and has credited the said withdrawal to the Statement of profit and Loss. Had such losses not been met from General Reserve, the Company would have refected a profit before tax of Rs. 472 crore and profit after tax for the year would have been Rs. 370 crore:

3. Further to our comments in the Annexure referred to in paragraph 1 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 the books;

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

d) In our opinion, the balance sheet, the statement of profit and loss and the cash fow 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; as referred in paragraph (2) above, the Company has exercised the option available as per court orders which overrides the relevant provisions of Accounting Standard 5 (AS- 5).

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

f) in our opinion and to the best of our information and according to explanations given to us, the said financial statements together with the notes thereon, 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 March 31, 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 the cash fow statement, of the cash fows of the Company for the year ended on that date.

Annexure to Auditors' Report (Referred to in our report of even date)

(i) In respect of its fixed assets:

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

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

(c) As per information and explanation given to us, during the year, the Company has not disposed off substantial part of fixed assets that would affect the going concern.

(ii) The Company is a service company, primarily engaged in lending and investing activities. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loan secured/unsecured to/from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses (iii)(a) to (iii)(g) of paragraph 4 of the Order are not applicable to the Company.

(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. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section. Accordingly, clause (v) of the Order is not applicable to the Company.

(vi) The Company has not accepted deposits from public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Act, and rules framed there under are not applicable for the year under audit.

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

(viii) According to the information and explanations given to us, The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Act, in respect of activities carried on by the Company. Hence the provisions of clause 4(viii) of the Order is not applicable to the Company.

(ix) (a) According to the records of the Company, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Investor Education Protection Fund, Income tax, Sales-tax, Wealth tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, except in case of Professional Tax in which there were a few delays in payment of the said dues. According to the information and explanations given to us, there are no undisputed amounts payable outstanding as at March 31, 2012 for a period of more than six months from the date they became payable

(b) According to the information and explanation given to us, there are no such statutory dues, which have not been deposited on account of any dispute, except in respect of sales tax under Gujarat Sales Tax Act, 1969 of Rs. 4,75,916 for the period 2001-02 which is pending before the Gujarat Sales Tax Tribunal, Ahmedabad and sales tax under Madhya Pradesh General Sales Tax Act, 1958 of Rs. 4,30,472 for the period 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I .

(x) The Company neither has accumulated losses nor has it incurred any cash losses during the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanation given by management, we are of the opinion that as at the balance sheet date the Company has not defaulted in repayment of dues to a financial institutions, banks or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained by the Company in respect of loans and advances granted 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, a nidhi or a mutual beneft society/society. Therefore, the provisions of clause 4(xiii) of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures, and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given by the management, in our opinion the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

(xvi) According to the information and explanation given to us, the term loans taken by the Company during the year have been applied for the purpose for which they were raised.

(xvii)According to information and explanation given to us and on an overall examination of the Balance Sheet of the Company as at March 31, 2012, no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of shares during the year to parties and Companies, covered in the register maintained under Section 301 of the Act.

(xix) The Company has created securities / is in the process of creation of securities and /or charges in respect of secured debentures issued during the year.

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Chaturvedi & Shah For B S R & Co.

Chartered Accountants Chartered Accountants

Firm Reg. No.: 101720W Firm Reg. No.: 101248W

Vijay Napawaliya N Sampath Ganesh

Partner Partner

Membership No.: 109859 Membership No.: 042554

Mumbai Mumbai

Dated: May 19, 2012 Dated: May 19, 2012


Mar 31, 2011

We have audited the attached balance sheet of Reliance Capital Limited ('the Company'), as at March 31, 2011, the profit and loss account 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 from material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (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.

2. Further to our comments in the Annexure referred to in paragraph 1 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 the 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 Act.

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

f) in our opinion and to the best of our information and according to explanations given to us, the said financial statements together with the notes thereon, 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 March 31, 2011;

(ii) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

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

Annexure to Auditors' Report (Referred to in our report of even date) (i) In respect of its fixed assets:

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

(b) The Company has a program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In 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) As per information and explanation given to us, during the year, the Company has not disposed off any substantial part of fixed assets that would affect the going concern.

(ii) The Company is a service company, primarily engaged in lending and investing activities. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loan secured/unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses (iii) (a) to (iii)(g) of paragraph 4 of the Order are not applicable to the Company.

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

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section. Accordingly, clause (v) of the Order is not applicable to the Company.

(vi) The Company has not accepted deposits from public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Act, and rules framed there under are not applicable for the year under audit.

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

(viii) According to the information and explanations given to us, The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Act, in respect of activities carried on by the Company. Hence the provisions of clause 4 (viii) of the Order is not applicable to the Company.

(ix) (a) According to the records of the Company, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Investor Education Protection Fund, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, except in case of Professional Tax and Provident Fund in which cases there were a few delays in payment of the said dues. There were no dues on account of Cess under section 441A of the Companies Act ,1956, since the date from which the aforesaid section comes into force has not yet been notifed by the Central Government According to the information and explanations given to us, there are no undisputed amounts payable outstanding as at March 31, 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no such statutory dues, which have not been deposited on account of any dispute, except in respect of sales tax under Gujarat Sales Tax Act, 1969 of Rs. 4,75,916 for the period 2001-02 which is pending before the Gujarat Sales Tax Tribunal, Ahmedabad and sales tax under Madhya Pradesh Sales Tax Act, 1969 of Rs. 4,30,472 for the period 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I .

(x) The Company neither has accumulated losses nor has it incurred any cash losses during the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanation given by management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained by the Company in respect of loans and advances granted 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, a nidhi or a mutual benefit society/society. Therefore, the provisions of clause 4 (xiii) of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures, and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name except certain securities which are kept as collateral security for margin requirement on behalf of its subsidiaries.

(xv) The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given by the management, in our opinion the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

(xvi) According to the information and explanation given to us, the term loans taken by the Company have been applied for the purpose for which they were raised except in few cases where the loans have been taken towards the year end the amounts of which are lying in bank accounts and were subsequently utilized for the purpose for which loans have been taken.

(xvii) According to information and explanation given to us and on an overall examination of the Balance Sheet of the Company as at March 31 2011, no funds raised on short- term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to a company, covered in the register maintained under Section 301 of the Act.

(xix) The Company has created securities and /or charges in respect of secured debentures issued and redeemed during the year except in case of Non Convertible Debentures amounting to Rs. 416 crore for which the Company is in the process of creation of securities.

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

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

For CHATURVEDI & SHAH For B S R & Co.

Chartered Accountants Chartered Accountants

Firm Reg. No.: 101720W Firm Reg. No.: 101248W

Lalit R. Mhalsekar Akeel Master

Partner Partner

Membership No.: 103418 Membership No.: 046768

Mumbai Mumbai

Dated: May 30, 2011 Dated: May 30, 2011




Mar 31, 2010

We have audited the attached balance sheet of Reliance Capital Limited (the Company), as at March 31, 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.

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 from material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 (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.

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

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 the 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 Act.

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

f) in our opinion and to the best of our information and according to explanations given to us, the said financial statements together with the notes thereon, 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 March 31, 2010;

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

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

Annexure to Auditors Report (Referred to in our report of even date) (i) In respect of its fixed assets:

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

(c) As per information and explanation given to us, during the year, the Company has not disposed off any substantial part of fixed assets that would affect the going concern.

(ii) The Company is a service company, primarily engaged in lending and investing activities. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable to the Company.

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956

(a) During the year the Company has granted unsecured demand loan amounting to Rs.102 crore to a one company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs.112.10 crore and the year end balance of such loans was Rs.32.10 crore. The Company had given interest free loan in the past to a company whose maximum balance and the year end balance was Rs.229.25 crore.

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

(c) The loans granted to the aforementioned companies are repayable on demand. According to the information and explanations given to us, the borrowers have been regular in repaying in the payment of interest, where applicable.

(d) There is no overdue amount of more than rupees one lakh in respect of the above loans.

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

(iv) According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of fixed assets and services taken & rendered. We have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to information and explanations given to us, we are of the opinion that the transactions made in pursuance of contracts or arrangements that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions of purchase of goods & material and sale of goods, materials & services made in pursuance of contracts or arrangement required to be entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- or more in respect of each party.

(vi) The Company has not accepted deposits from public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are not applicable for the year under audit.

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

(viii) The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of activities carried on by the Company. Hence the provisions of clause 4 (viii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(ix) (a) According to the records of the Company, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom Duty, Excise Duty and other statutory dues.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31, 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no such statutory dues, which have not been deposited on account of any dispute, except in respect of sales tax under Gujrat Sales Tax Act, 1969 of Rs.4,75,916 for the period 2001-02 which is pending before the Gujarat Sales Tax Tribunal, Ahmedabad and sales tax under Madhya Pradesh Sales Tax Act, 1969 of Rs.4,30,472 for the period 1996-97 which is pending before Appellate Deputy Commissioner of the Commercial Tax, Indore Division - I .

(x) The Company neither has accumulated losses nor has it incurred any cash losses during the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanation given by management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained by the Company in respect of loans and advances granted 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, a nidhi or a mutual benefit society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, debentures, and other investment and timely entries have been made therein.

(xv) The Company has given guarantees for loan taken by others from banks or financial institutions. According to the information and explanations given by the management, in our opinion the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

(xvi) According to the information and explanation given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to information and explanation given to us and on an overall examination of the Balance Sheet of the Company as at March 31 2010, no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of equity shares during the year to a company, covered in the register maintained under Section 301 of the Companies Act, 1956, at price which is not prejudicial to the interest of the Company.

(xix) The Company has created securities and /or charges in respect of secured debentures issued and redeemed during the year.

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

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

For CHATURVEDI & SHAH For B S R & Co.

Chartered Accountants Chartered Accountants

Firm Regn. No:101720W Firm Regn. No: 101248W

C. D. Lala Akeel Master

Partner Partner

Membership No.: 35671 Membership No.: 046768

Mumbai Mumbai

Dated: April 30, 2010 Dated: April 30, 2010





 
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