Auditor Report of IIFL Finance Ltd.

Mar 31, 2023

To the Members of IIFL Finance Limited

Report on the Audit of the Standalone Ind AS financial

statementsOPINION

We have audited the standalone Ind AS financial statements of IIFL Finance Limited, which comprise Balance Sheet as at March 31, 2023, the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr.no	Key Audit Matter	Response to Key Audit Matter
1	Information technology (IT) systems used in financial reporting process. The Company’s operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily. We therefore identified IT systems and controls over financial reporting as a key audit matter for the Company.	We obtained an understanding of the Company’s IT control environment relevant to the audit. We tested the design, implementation and operating effectiveness of the Company’s General IT controls over the key IT systems which are critical to financial reporting. We also tested key automated and manual controls and logic for system generated reports relevant to the audit that would materially impact the financial statements. In addition to above, we have also relied on the work of the internal auditors and system auditors.
2	Impairment of Financial Assets held at amortised cost: Since the loans and advances form a major portion of the Company’s assets, and due to the significance of the judgments used in classifying loans and advances into various stages as stipulated in Indian Accounting Standard (Ind AS) 109 and the management estimation of the related impairment provisions, this is considered to be a key audit matter.	We evaluated appropriateness of the impairment principles used by management based on the requirements of Ind As 109 and our understanding of the business. We assessed the design and implementation of key internal financial controls over loan impairment process used to calculate the impairment charge.

Sr.no	Key Audit Matter	Response to Key Audit Matter
	The Company’s impairment allowance is derived from estimates including the historical default and loss ratios. Management exercises judgement in determining the quantum of loss based on a range of factors. The most significant areas are: - Segmentation of loan book - Determination of exposure at default - Loan staging criteria - Calculation of probability of default / Loss given default - Consideration of probability weighted scenarios and forward looking macro-economic factors The application of ECL model requires several data inputs. This increases the risk of completeness and accuracy of the data that has been used to create assumptions in the model. Refer Note 37A.3 to the Financial Statements.	We evaluated management’s controls over collation of relevant information used for determining estimates for management overlays. We tested review controls over measurement of impairment allowances and disclosures in financial statements.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board’s Report including Annexures to Board’s Report and Management Discussion and Analysis report but does not include the financial statements and our auditor’s report thereon. The Director’s report and Management Discussion and Analysis report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Director’s report and Management Discussion and Analysis report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 ''The Auditor’s responsibilities Relating to Other Information’.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true

and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian accounting standards specified under Sec 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 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 of the financial statements.

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 (including Other Comprehensive Income), the Statement of changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account maintained for the purpose or preparation of the financial statements.

d) In our opinion, the aforesaid financial statements comply with the Ind AS 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 31,2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023, 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 to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) 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 financial statements- Refer Note No 38 of the 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.

iii. There has not been any delay in transferring amounts which requires to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that,

to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) I n our opinion and based on the audit procedures, we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The dividend declared or paid during the year by the Company is in compliance with section 123 of the Companies Act, 2013.

vi. Proviso to Rule 3(1) of Companies (Accounts) Rule, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

For V Sankar Aiyar & Co. For Chhajed & Doshi

Chartered Accountants Chartered Accountants

(FRN: 109208W) (FRN: 101794W)

G. Sankar M. P Chhajed

Partner Partner

M. No.046050 M. No. 049357

Place: Mumbai Place: Mumbai

Date: April 26, 2023 Date: April 26, 2023

UDIN: 23046050BGTZVA5233 UDIN: 23049357BGSK6852

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Mar 31, 2022

Report on the Audit of the Standalone Ind AS financialstatements

Opinion

We have audited the standalone Ind AS financial statements of IIFL Finance Limited, which comprise Balance Sheet as at 31st March 2022, the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the financial

statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

We draw attention to Note 8.3 to the Standalone Financial Statements, which fully describes that the Company has recognised impairment on financial assets to reflect the business impact and uncertainties arising from the COVID 19 pandemic. Such estimates are based on current facts and circumstances and may not necessarily reflect the future uncertainties and events arising from the full impact of the COVID 19 pandemic.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. no	Key Audit Matter	Response to Key Audit Matter
1	Information technology (IT) systems used in financial reporting process. The company''s operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily. We therefore identified IT systems and controls over financial reporting as a key audit matter for the Company.	We obtained an understanding of the Company’s IT control environment relevant to the audit. We tested the design, implementation and operating effectiveness of the Company''s General IT controls over the key IT systems which are critical to financial reporting. We also tested key automated and manual controls and logic for system generated reports relevant to the audit that would materially impact the financial statements. In addition to above, we have also relied on the work of the internal auditors and system auditors.
2	Impairment of Financial Assets held at amortised cost: Since the loans and advances form a major portion of the Company''s assets, and due to the significance of the judgements used in classifying loans and advances into various stages as stipulated in Indian Accounting Standard (IND AS) 109 and the management estimation of the related impairment provisions this is considered to be a key audit matter.	We evaluated appropriateness of the impairment principles used by management based on the requirements of Ind AS 109, our business understanding. We assessed the design and implementation of key internal financial controls over loan impairment process used to calculate the impairment charge.

Sr. no	Key Audit Matter	Response to Key Audit Matter
	The Company’s impairment allowance is derived from estimates including the historical default and loss ratios. Management exercises judgement in determining the quantum of loss based on a range of factors The most significant areas are: - Segmentation of loan book - Determination of exposure at default - Loan staging criteria - Calculation of probability of default / Loss given default - Consideration of probability weighted scenarios and forward looking macro-economic factors The application of ECL model requires several data inputs. This increases the risk of completeness and accuracy of the data that has been used to create assumptions in the model. Refer Note 38A.3 to the Financial Statements.	We evaluated management’s controls over collation of relevant information used for determining estimates for management overlays. We tested review controls over measurement of impairment allowances and disclosures in financial statements.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board’s Report including Annexures to Board’s Report and Management Discussion and Analysis report but does not include the financial statements and our auditor’s report thereon. The Director’s report and Management Discussion and Analysis report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Director’s report and Management Discussion and Analysis report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 ''The Auditor’s responsibilities Relating to Other Information’.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true

and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian accounting standards specified under Sec 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to

issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

The standalone financials statements of the company for the previous year ended March 31,2021 were audited by one of the current joint statutory auditors who had expressed unmodified opinion vide their report dated May 06,2021.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 1 43(1 1 ) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 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 of the financial statements.

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 (including Other Comprehensive Income), the Statement of changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account

maintained for the purpose or preparation of the financial statements.

d) In our opinion, the aforesaid financial statements comply with the Ind AS 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 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 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 to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its managing director during the year is in accordance with the provisions of section 197 of the Act.

h) 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 financial statements- Refer Note No 39 of the 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;

iii. There has not been any delay in transferring amounts which requires to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that,

to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds

or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) I n our opinion and based on the audit procedures, we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The dividend declared or paid during the year by the Company is in compliance with section 123 of the Companies Act, 2013.

For V Sankar Aiyar & Co. For Chhajed & Doshi

Chartered Accountants Chartered Accountants

(FRN: 109208W) (FRN: 101794W)

G. Sankar M. P Chhajed

Partner Partner

M. No.046050 M. No. 049357

Place: Mumbai Place: Mumbai

Date: April 28, 2022 Date: April 28, 2022

UDIN: 22046050AHZCGQ5516 UDIN: 22049357AHZGAW5720

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IIFL HOLDINGS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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 Standards prescribed under section 133 of the Act read with the Companies (Accounting Standards) Rules, 2006, as amended (“Accounting Standards”), and other accounting principles generally accepted in India.

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 standalone 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 standalone financial statements based on our audit.

In conducting 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 and the Order issued under section 143(11) of the Act.

We conducted our audit of the standalone financial statements 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone financial statements. We believe that the audit evidence obtained by us 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 Standards and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit and its cash flows for the year ended on that date.

Other Matters

The standalone financial statements of the Company for the year ended March 31, 2017, were audited by M/s. Sharp and Tannan Associates, the predecessor auditor, who expressed an unmodified opinion on those standalone financial statements on May 4, 2017.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, based on our audit 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 prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE “B” To The Independent Auditor’s Report

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section 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) The Company has a program of verification of fixed assets to cover all the items at major locations in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

(c) There is no overdue amount remaining outstanding as at the balance sheet date.

(iv) I n our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of CARO 2016 is not applicable.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Goods and Services Tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. We are informed that the provisions of Sales Tax, Customs Duty and Excise Duty are not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and Services Tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Goods and Services Tax, Profession Tax and Value Added Tax which have not been deposited as on March 31, 2018 on account of disputes are given below:

Name of Statute		Nature of Dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Unpaid (Rs. in Millions)	Amount Deposited under protest(Rs.in Millions)
Income Tax Act, 1961		Disallowance on account of 14A and ESOP	ITAT	AY 2009-10	-	58.55
Income Tax Act, 1961		Disallowance on account of 14A , ESOP & Transfer Pricing	CIT(A)	AY 2010-11	21.95	42.63
Income Tax Act, 1961		Disallowance on account of 14A , ESOP & Transfer Pricing	CIT(A)	AY 2011-12	25.39	17.12
Income Tax Act, 1961		Disallowance on account of 14A , ESOP & Transfer Pricing	CIT(A)	AY 2012-13	80.28	42.44
Income Tax Act, 1961		Disallowance on account of 14A , ESOP & Transfer Pricing	CIT(A)	AY 2013-14	9.55	42.70
Profession Tax		Non-Payment of Professional Tax of Employees	Commissioner of Sales Tax(Appeal)	AY 2007- 08	1.09	0.47
Service Tax Act, 1994	Service Tax on transaction charges. Appeal before Commissioner appeals		Commissioner Appeal	April 2007 to March 2012	1.10		0.04
Service Tax Act, 1994	Service Tax on Transaction charges. Appeal before CESTAT		CESTAT	April 2007 to May 2008	57.94		2.15
Service Tax Act, 1994	Service Tax on Delayed Payment charges. Appeal to be filed before CESTAT		CESTAT	July 2012 to March 2014	90.36		-
Service Tax Act, 1994	Service Tax on Non-Compete Fees. Appeal to be filed before CESTAT		CESTAT	April 2008 to March 2012	254.47		-
Service Tax Act, 1994	Cenvat credit reversal on arbitrage trading. Appeal to be filed before CESTAT		CESTAT	April 2007 to March 2013	24.23		-

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding or subsidiary companies or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) As per the Reserve Bank of India’s Circular “DNBR.PD.001/ 03.10.119/2016-17”, dated August 25, 2016, the Company is exempted from registration under section 45-IA of the Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Kalpesh J. Mehta

(Partner)

(Membership No. 48791)

Place : Mumbai

Dated: May 3, 2018

---

Mar 31, 2017

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of IIFL Holdings Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, 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 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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.

AUDITOR’S 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 March 31, 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 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, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 to 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 does not have any pending litigations which would impact its financial position in its financial statements, refer note no. 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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

iv. The Company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 37 to the standalone financial statements.

The Annexure referred to in Independent Auditor’s report to the members of IIFL Holdings Limited (“the Company”) for the year ended March 31, 2017. We report that:

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

(b) As explained to us, these fixed assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.

(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 deed of immovable property is held in the name of the Company.

2. The Company is not carrying on any manufacturing or trading activity. Therefore, paragraph 3 (ii) of the order is not applicable to the Company.

3. The Company has granted loan to six companies 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 companies listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In the case of the loans granted to the Companies listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.

(c) There are no overdue amounts in respect of the loan granted to companies listed in the register maintained under section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, investments, guarantees and securities made.

5. The Company has not accepted any deposits during the year from the public to which the directives issued by Reserve Bank of India and the provisions of Section 73 to 76 and any other relevant provisions of the Act and the rules framed thereunder apply.

6. As per the information and explanations given to us, in respect of the class of industry, the Company falls under, the maintenance of cost records has not been prescribed by the Central Government under section 148(1) of the Companies Act, 2013. Therefore, Paragraph 3 (vi) of the Order is not applicable to the Company.

7. (a) According to the information and explanations given to

us and the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and any other material statutory dues as applicable to the Company, with the appropriate authorities. There were no material undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and any other material statutory dues as applicable to the Company outstanding as at March 31, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and records of the Company examined by us, there are no cases of non-deposit with the appropriate authorities of disputed dues of duty of customs or duty of excise. However, according to the information and explanations given to us, the following dues of service tax, sales tax, value added tax, profession tax and income tax have not been deposited by the Company on account of disputes:

Name of the Statute		Nature of the disputed dues	Amount of Tax (Rs. In Millions )	Period to which the amount relates	Forum where dispute is pending
MVAT Act, 2002		Delay in filing VAT Audit Report for the period 2007-2008	Rs.0.56	F.Y. 2007-2008	Jt. Comm. Of Sales Tax
Profession Tax		Profession Tax, Penalty & Interest	Rs.1.55	A.Y.2007-2008	Dy. Comm. Of Sales Tax -Appeals
Income Tax Act, 1961		Disallowance of Expenses U/S 14 A	Rs.0.61	A.Y.2006-2007	Assessing Officer under section 254 of the Income Tax Act,1961.
Income Tax Act,1961	Disallowance of Depreciation, Disallowance U/S 14A and Disallowance of Expenses		Rs.7.03 out of total demand of Rs.13.96	A.Y.2007-2008	Assessing officer under section 254 of the Income Tax Act,1961.
Income Tax Act,1961	Disallowance of Expenses u/s 14 A and ESOP Expenses		Rs.39.57 out of total demand of Rs.59.38	A.Y.2008-2009	Assessing Officer under section 254 of the Income Tax Act,1961. The Company has also filed an appeal before High Court against the ITAT order.
Income Tax Act,1961	Disallowance of Expenses u/s 14 A and ESOP Expenses and Transfer Pricing Adjustment		Rs.25.36 out of total demand of Rs.67.07	A.Y.2010-2011	CIT Appeals of Income Tax
Income Tax Act,1961	Disallowance of Expenses u/s 14 A and ESOP Expenses and Transfer Pricing Adjustment		Rs.35.39	A.Y. 2011-2012	CIT Appeals of Income Tax
Income Tax Act,1961	Disallowance of Expenses u/s 14 A and ESOP Expenses and Transfer Pricing Adjustment		Rs.112.84 out of total demand of Rs.132.84	A.Y. 2012-2013	CIT Appeals of Income Tax
Income Tax Act,1961	Disallowance of Expenses u/s 14 A and Transfer Pricing Adjustment		Rs.51.78	A.Y. 2013-2014	CIT Appeals of Income Tax
Service Tax Act,1994	Service Tax on brokerage and transaction charges		Rs.1.14	For the period 1.4.2007 to 31.03.2012	Commissioner of Central Excise Appeals

8. Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to debenture holders. The Company has not borrowed from bank, financial institution and government during the year.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loan during the period. Therefore, paragraph 3 (ix) of the Order is not applicable to the Company.

10. During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India and 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.

11. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not paid / provided for managerial remuneration. Therefore, paragraph 3 (xi) of the Order is not applicable to the Company.

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.

13. 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 sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, paragraph 3 (xiv) of the Order is not applicable to the Company.

15. 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 non-cash transactions with directors or persons connected with him. Therefore, paragraph 3 (xv) of the Order is not applicable to the Company.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Sharp and Tannan Associates

Chartered Accountants

Firm’s Registration No.:109983W

By the hand of

Tirtharaj Khot

Place: Mumbai Partner

Date: May 04, 2017 Membership No.: (F) 037457

---

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of IIFL Holdings Limited (Formerly India Infoline Limited ("the Company"), which comprise the balance sheet as at 31 March 2014, and the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required

and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the balance sheet, statement of profit and loss, and cash flow statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13 September 2013, of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the board of directors, none of the directors is disqualified as on 31 March 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Expenses

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For Sharp & Tannan Associates

Chartered Accountants

Firm''s Registration No.109983W

by the hand of

Tirtharaj Khot

Place: Mumbai Partner

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

---

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Emphasis of Matter

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For Sharp & Tannan Associates

Chartered Accountants

ICAI Registration No.109983W

By the hand of

Tirtharaj Khot

Place: Singapore Partner

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

---

Mar 31, 2012

We have audited the attached Balance Sheet of India Infoline Limited as at 31st March, 2012, and the statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

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

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

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

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

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

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

b. In the case of the statement of profit and loss, of the profit for the year ended on that date; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sharp & Tannan Associates

Chartered Accountants

ICAI Registration No.109983W

By the hand of

Tirtharaj Khot

Place: Mumbai Partner

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

---

Mar 31, 2011

We have audited the attached Balance Sheet of India infoline limited as at march 31, 2011, and Profit and loss account and also the cash Flow Statement for the year ended on that date, annexed thereto. these financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

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

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

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

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

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

b. in the case of the profit and loss account, of the profit for the year ended on that date; and

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

Annexure

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

for the period 2007- 2008

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

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

Disallowance of expenses u/s 14a

and disallowance of expenses

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

interest



Period to which the Forum where dispute

amount relates is pending

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

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

Income tax

Income Tax A.Y. 2007-2008 commissioner of

Income tax appeal

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

Tax- appeals

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

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

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

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

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

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

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

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

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

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

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

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year nor have we been informed of such case by management. Sharp & Tannan Associates

Chartered Accountants

ICAI Registration no.109983W

By the hand of

Tirtharaj Khot

Place: Mumbai Partner

Date: may 7, 2011

Membership no.: 37457

---

Mar 31, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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