Fsm Project

7/29/2019 Fsm Project

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Methods of venture capital financing :

1. Equity participation .

2. Conventional loan.

3. Conditional loan.

4. Income notes.

Equity participation:-

Venture Capital Firm participate in equity through direct purchase of shares but their

stake does not exceed 49%. these shares are sold either to the promoter at negotiated

price under buy back agreement or to the public in the secondary market at a profit.

Conventional loan:-

Under this form of assisstance, a lower fixed rate of interest is charged till the assissted

units become commercially operational, after which the loan carries normal or higher rate

of interest. The loan has to be repaid according to a predetermined schedule of repayment

as per terms of loan agreement.

Contional loan:-

Under this form of finance , an interest free loan is provided during the implementation

period but it has to pay royalty on sales. The loan as to be paid according to a pre

determined schedule as soon as the company is able to generate sales and income .

Income notes:-

Its is the combination of conventional and conditional loans. But interest and royalty are

payable at much lower rates than in case of conditional loans.

The venture capital firms are incoporated in india and they are promoted either by all

financial institution like IDBI, ICICI, IFCI, State level ffinancial institutions, publicsector bank .


2/45

The present venture capital players can be broadly classified into the following four

categoris:-

1. Companies promoted by all india finanicial institutions.

2. Companies promoted by state financial institution.

3. Companies promotd by banks.

4. Companies in private sector

1. Companies promoted by all india FIs:-

Venture capital division od IDBI.

Risk capital and technology finance coporation Ltd.(RCTC)(subsidiary of IFCI).

Technologydevelopment and information company of india Ltd.(TDICI), (promoted by

ICICI &UTI).

2. Companies promoted by state FI:-

Gujarat venture finance Ltd.(promoted by GUC).

Andhra pradesh industrial development corporation venture capital Ltd. (promoted by

APIDC).

3.

Companies promoted by banks:-

Can bank venture fund (promoted by canfina and canara bank ).

SBI venture capital fund (promoted by SBI caps).

Indian investment fund (promoted by Grindlays Bank).

Infrastucture Leasing (promoted by Centrel Bank if India).

4. Companies in private sector:-

Indus venture capital fund (promoted by mafatlals and hindustan lever).

Credit capital venture fund (india)ltd.

20th

century venture capital corporation ltd.

Venture capital fund promoted by V.B Desai & co.


3/45

1. Low cost information.

2. Quick investment decision .

3. Independent investment decision .4. Investors protection.

Low cost of information:-

Credit rating is a source of low cost information to investors. The collection, processing

and analysis of relevant information is done by a specialised agency which a group of

investor can trust.

Quick investment decision:-

In the present day complex world rating enable investors to take quickest possible

decisions based on associated rating.

Independent investment decision :-

For rated instruments, investors need not depend upon the advice of financial

intermediaries. As the rating symbol suggests the credit worthinesss of the instrument and

indicates the degree of risk involved in it, the investors can make direct investment

decisions.

Investors protection:-

Hiring of credit agency implies that the management of the company is ready7 to show

its operations for independent scruting. So , the investors who are not provided with

confidential information can have overall assessment based on ratingd. The creditible and


4/45

abjective rating agency can provide increased disclosure, better accounting standard and

improved investor protection.

MOST IMPORTANT TOPIC

From the above diagram it is clear that Mutual Fund is melt for the small investors.

It is based on response of Mutual Funds. The sponsor or the trustee is the top most authority. The

AMC (Asset Management Company) is the portfolio manager who undertakes the entire research

and developmental activity of equity markets. Most of the time it is felt that the AMC is the care


5/45

taker and portfolio manager of the funds of the small investor. AMC charges specific % on total

fund managed.(maximum 2.5% up to 1.25% minimum).

Some basic function of Indian mutual funds:-

AMFI association of mutual fund of Indian is the guiding authority for India slowlyguiding become the controlling authority in future.

Indian mutual fund industry has invested around 9lacs Crore in the capital market.

Reliance and the group allowance in controlling over 1, 10,000 cr. of mutual fund

industry.

ICICI, HDFC, TEMPLETANT etc. or some of the leading mutual fund who have net

worth to the turns of 90,000 cr.

Indian mutual fund industry had been growing year after year but computation had been

also growing.

Specialize in mutual fund have been encourage and then there are so many mutual who

are specialized them self. In the area of infrastructure, software, FMCG, Consumer

durable etc.

Mutual funds have combination of share and bonds.

Normally 60% invested on shares and bonds


6/45

INFOSYS LIMITED

(FORMERLY INFOSYS TECHNOLOGIES LIMITED)

ANNUAL REPORT 2011-2012

AUDITORS` REPORT

To

The Members of

Infosys Limited

(formerly Infosys Technologies Limited)

Report on the Financial Statements:

We have audited the accompanying financial statements of Infosys Limited

(`the Company`) which comprise the Balance Sheet as at 31 March 2012, 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 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:


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(i) In the case of the Balance Sheet, of the state of affairs of the

Company as at 31 March 2012;

(ii) In the case of the Statement of Profit and Loss, of the profit for the

year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the

year ended on that date.

Report on Other Legal and Regulatory Requirements:

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 31 March 2012, and taken on record by the Board of Directors, none of

the directors is disqualified as on 31 March 2012, from being appointed as

a director in terms of clause (g) of sub-section (1) of section 274 of the

Companies Act, 1956.

For B S R & Co.

Chartered Accountants

Firm`s registration number: 101248W

Natrajh Ramakrishna

Partner

Membership number: 32815

Place: Bangalore

Date : 13th April, 2012.

ANNEXURE TO THE AUDITORS` REPORT

The Annexure referred to in our report to the members of Infosys Limited

(`the Company`) (formerly Infosys Technologies Limited) for the year ended

31 March 2012. We report that:

(i)(a) The Company has maintained proper records showing full particulars,

including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its

fixed assets by which fixed assets are verified in a phased manner over a

period of three years. In accordance with this programme, certain fixed

assets were verified during the year and no material discrepancies were

noticed on such verification. In our opinion, this periodicity of physical

verification is reasonable having regard to the size of the Company and the


8/45

nature of its assets.

(c) Fixed assets disposed off during the year were not substantial, and

therefore, do not affect the going concern assumption.

(ii) The Company is a service company, primarily rendering information

technology services. Accordingly, it does not hold any physical

inventories. Thus, paragraph 4(ii) of the Order is not applicable.

(iii)(a) The Company has granted a loan to a body corporate covered in the

register maintained under section 301 of the Companies Act, 1956 (`the

Act`). The maximum amount outstanding during the year was Rs. 269,565,993

and the year-end balance of such loan amounted to Rs. 1,239,007. Other than

the above, the Company has not granted any loans, secured or unsecured, to

companies, firms or parties covered in the register maintained under

section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on

which the loan has been granted to the body corporate listed in the

register maintained under Section 301 of the Act are not, prima facie,

prejudicial to the interest of the Company.

(c) In the case of the loan granted to the body corporate listed in the

register maintained under section 301 of the Act, the borrower has been

regular in the payment of the interest as stipulated. The terms of

arrangement do not stipulate any repayment schedule and the loan is

repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not

applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of

the loan granted to a body corporate listed in the register maintained

under section 301 of the Act.

(e) The Company has not taken any loans, secured or unsecured from

companies, firms or parties covered in the register maintained under

section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of

the Order are not applicable.

(iv) In our opinion and according to the information and explanations given

to us, there is an adequate internal control system commensurate with the

size of the Company and the nature of its business with regard to purchase

of fixed assets and sale of services. The activities of the Company do not

involve purchase of inventory and the sale of goods. We have not observed

any major weakness in the internal control system during the course of the

audit.

(v)(a) In our opinion and according to the information and explanations

given to us, the particulars of contracts or arrangements referred to in

section 301 of the Act have been entered in the register required to be

maintained under that section.

(b) In our opinion, and according to the information and explanations given

to us, the transactions made in pursuance of contracts and arrangementsreferred to in (v)(a) above and exceeding the value of Rs 5 lakh with any

party during the year have been made at prices which are reasonable having

regard to the prevailing market prices at the relevant time.

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

(vii) In our opinion, the Company has an internal audit system commensurate

with the size and the nature of its business.

(viii) The Central Government of India has not prescribed the maintenance


9/45

of cost records under Section 209(1)(d) of the Act for any of the services

rendered by the Company.

(ix)(a) According to the information and explanations given to us and on

the basis of our examination of the records of the Company, amounts

deducted/ accrued in the books of account in respect of undisputed

statutory dues including Provident Fund, Investor Education and Protection

Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material

statutory dues have been regularly deposited during the year by the Company

with the appropriate authorities. As explained to us, the Company did not

have any dues on account of Employees` State Insurance, Customs duty and

Excise duty.

According to the information and explanations given to us, no undisputed

amounts payable in respect of Provident Fund, Investor Education and

Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other

material statutory dues were in arrears as at 31 March 2012 for a period of

more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no

material dues of Wealth tax and Cess which have not been deposited with the

appropriate authorities on account of any dispute. However, according to

information and explanations given to us, the following dues of Income tax,

Sales tax, and Service tax, have not been deposited by the Company on

account of disputes:

Name of Nature of dues Amount Period to Forum where

the statute (in Rs.) which the dispute is

amount pending

relates

Income Tax Interest on 5,084,704 Assessment year CIT (Appeals),

Act, 1961 Income tax 2006-2007 Bangalore

demanded

Income Tax Demand under 73,025,295# Assessment year CIT (Appeals),

Act, 1961 section 156 2009-2010 Bangalore

Service tax Service tax 57,563,973# July 2004 to CESTAT,

demanded October 2005 Bangalore

Service tax Service tax 25,784,864# January 2005 to CESTAT-

demanded March 2009 Bangalore

Service tax Service tax 231,520,178 February 2007 CESTAT-

and penalty to March 2009 Bangalore

demanded

Service tax Service tax 41,972,658 April 2009 to Commissioner,

demanded March 2010 Bangalore

APVAT Inter-state 417,650 April 2006 to Sales taxAct, 2005 sales March 2007 appellate

demanded Tribunal,

Andhra Pradesh

APVAT Sales tax 3,112,450# April 2007 to High Court of

Act, 2005 demanded March 2008 Andhra Pradesh

KVAT Act, Sales tax, 245,343,982*# April 2005 to High Court of

2003 interest March 2009 Karnataka

and demanded


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penalty

MVAT Act, Excess 1,320,455# January 2006 to Deputy

2002 refund December 2007 commissioner

along sales tax,

with Pune

interest

demanded.

CENVAT Irregular 111,413,495# October 2004 to CESTAT, Credit

Rules, 2004 availment March 2009 Bangalore

of CENVAT

credit

* Net of amounts paid under protest.

# a stay order has been received against the amount disputed and not

deposited.

(x) The Company does not have any accumulated losses at the end of the

financial year and has not incurred cash losses in the financial year and

in the immediately preceding financial year.

(xi) The Company did not have any outstanding dues to any financial

institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of

security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations

given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/

society.

(xiv) According to the information and explanations given to us, the

Company is not dealing or trading in shares, securities, debentures and

other investments.

(xv) According to the information and explanations given to us, the Company

has not given any guarantee for loans taken by others from banks orfinancial institutions.

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

(xvii) The Company has not raised any funds on short-term basis.

(xviii) The Company has not made any preferential allotment of shares to

parties and companies covered in the register maintained under section 301

of the Act.

(xix) The Company did not have any outstanding debentures during the year.

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

(xxi) According to the information and explanations given to us, nomaterial fraud on or by the Company has been noticed or reported during the

course of our audit.

For B S R & Co.


Firm`s registration number: 101248W

Natrajh Ramakrishna

Partner

Membership number: 32815


11/45

Place: Bangalore

Date : 13th April, 2012.

Auditor's Report (Indian Hotels Company) Year E

1. We have audited the attached Balance Sheet of THE INDIAN HOTELS

COMPANY LIMITED (the Company) as at March 31, 2010, the Profit and

Loss Account and the Cash Flow Statement of the Company for the year

ended on that date, both annexed thereto. These financial statements

are the responsibility of the Companys Management. Our responsibility

is to express an opinion on these financial statements based on our

audit.

2. We conducted our audit in accordance with the auditing standards

generally accepted in India. Those Standards require that we plan and

perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatements. An audit

includes examining, on a test basis, evidence supporting the amounts

and the disclosures in the financial statements. An audit also includes

assessing the accounting principles used and the significant estimates

made by the Management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a reasonable

basis for our opinion.

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

issued by the Central Government in terms of Section 227(4A) of theCompanies Act, 1956, we enclose in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3

above, we report as follows:

(a) we have obtained all the information and explanations which to the

best of our knowledge and belief were necessary for the purposes of our

audit;

(b) in our opinion, proper books of account as required by law have

been kept by the Company so far as it appears from our examination of

those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow

Statement dealt with by this report are in agreement with the books of

account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and

the Cash Flow Statement dealt with by this report are in compliance

with the Accounting Standards referred to in Section 211(3C) of the

Companies Act, 1956;


12/45

(e) in our opinion and to the best of our information and according to

the explanations given to us, the said accounts give the information

required by the Companies Act, 1956 in the manner so required and give

a true and fair view in conformity with the accounting principles

generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the

Company as at March 31, 2010;

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

Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the

Company for the year ended on that date.

5. On the basis of the written representations received from the

Directors as on 31st March, 2010, taken on record by the Board of

Directors, none of the Directors is disqualified as on 31st March, 2010

from being appointed as a director in terms of Section 274(1)(g) of the

Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our

report of even date)

(i) Having regard to the nature of the Companys

business/activities/result/transactions, etc. clauses (viii), (x),

(xiii) and (xiv) of paragraph 4 of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars,

including quantitative details and situation of the fixed assets. The

fixed asset records of the Taj Mahal Palace & Tower, Mumbai have not

been updated, as pursuant to the terrorist attack in November 2008, the

Unit is in the process of restoration of its property, which is covered

by a reinstatement policy. The records, we are informed, will be

updated only after the insurance claim for reinstatement has been

settled.

(b) Physical verification of fixed assets has been carried out by the

Management at most of the Units in accordance with a programme of

verification which, in our opinion, provides for physical verification

of all the fixed assets at reasonable intervals. We have been informed

that the reconciliation of assets verified with the fixed assets

register is still in progress at some of the Units. Discrepancies, if

any, arising out of verification and reconciliation are yet to be

determined.

(c) The fixed assets disposed off during the year, in our opinion, do

not constitute a substantial part of the fixed assets of the Company

and such disposal has, in our opinion, not affected the going concern

status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during


13/45

the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations

given to us, the procedures of physical verification of inventories

followed by the Management were reasonable and adequate in relation to

the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations

given to us, the Company has maintained proper records of its

inventories and no material discrepancies were noticed on physical

verification.

(iv) According to the information and explanations given to us, the

Company has neither granted nor taken any loans, secured or unsecured,

to/from companies, firms or other parties listed in the Register under

Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations

given to us, there is an adequate internal control system commensurate

with the size of the Company and the nature of its business with regard

to purchase of inventory and fixed assets and for the sale of goods andservices. During the course of our audit, we have not observed any

major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register

maintained in pursuance of Section 301 of the Companies Act, 1956, to

the best of our knowledge and belief and according to the information

and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section

301 that needed to be entered in the Register maintained under the said

Section have been so entered.

(b) There were no transactions in excess of Rs. 5 lakhs each in respect

of any party during the year.

(vii) In our opinion and according to the information and explanations

given to us, the Company has complied with the provisions of Sections

58A and 58AA, or any other relevant provisions of the Companies Act,

1956 and the Companies (Acceptance of Deposits) Rules, 1975, with

regard to the deposits accepted from the public. According to

information and explanations given to us, no order has been passed by

the Company Law Board or the National Company Law Tribunal or the

Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an adequate internal audit

system commensurate with the size of the Company and the nature of its

business.

(ix) According to the information and explanations given to us, in

respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed

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 any other material statutory

dues with the appropriate authorities.


14/45

(b) There were no undisputed amounts payable in respect of Income Tax,

Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory

dues in arrears as at 31st March, 2010 for a period of more than six

months from the date they became payable.

(c) Details of dues of Sales Tax and Service Tax which have not been

deposited as on 31st March, 2010 on account of disputes are given

below:

Name of Statute Nature of Amount Period to which the

Dues (Rs.in amount relates

crores)

Central Sales Sales Tax 0.25 1997-98

Tax Act, 1956

and Sales Tax Act

7.72 2000-03

of various states

0.07 2000-2001/ 2002-2003

0.03 2004-05

0.10 1992-95

0.27 1995-96

0.23 1996-98

0.75 2001-2002/ 2005-2007

0.05 2004-05

Name of Statue Forum where dispute is

pending

Central Sales Maharashtra Sales Tax

Tax Act, 1956 Tibunal

ans Sales Tax Act Joint Commissioner of

of various states Sales Tax

Additional Commissioner

of Sales Tax (Appeals)

Deputy Commissioner of

Sales Tax (Appeals)

Tribunal

Appellate Board

Appellate & Revision

Board


15/45

Deputy Commissioner of

Commercial Taxes

Assistant Commissioner of

Sales Tax (Appeals)

Name of Statute Nature of Amount Period to which the

Dues (Rs.in amount relates

crores)

Finance Act, 1994 Service Tax 0.05 2000-05

0.33 2003-06

0.59 2002-04

1.10 2002-07

Total 11.54

Name of the Statue Forum where dispute is

pending

Finance Act 1944 Assistant Commissioner of

Service Tax (Appeals)

Joint Commissioner of

Service Tax (Appeals)

Central Excise Service Tax

Appellate Tribunal

Service Tax Department,

New Delhi

(x) In our opinion and according to the information and explanations

given to us, the Company has not defaulted in the repayment of dues to

banks, financial institutions and debenture holders.

(xi) In our opinion and according to the information and explanations

given to us, the Company has not granted any loans and advances on the

basis of security by way of pledge of shares, debentures and other

securities.

(xii) In our opinion and according to the information and explanations

given to us, the terms and conditions of the guarantees given by the

Company for loans taken by others from banks and financial institutionsare not, prima facie, prejudicial to the interests of the Company.

(xiii) In our opinion and according to the information and explanations

given to us, the term loans have been applied for the purposes for

which they were obtained, other than temporary deployment pending

application.

(xiv) In our opinion and according to the information and explanations

given to us and on an overall examination of the Balance Sheet, we


16/45

report that funds raised on short-term basis have not been used during

the year for long- term investment.

(xv) According to the information and explanations given to us, the

Company has not made any preferential allotment of shares to parties

and companies/firms covered in the Register maintained under Section

301 of the Companies Act, 1956.

(xvi) According to the information and explanations given to us, during

the period covered by our audit report, the Company had issued 3,000 2%

Secured Non-Convertible debentures of Rs. 10 lakhs each. The Company is

in the process of creating security for these debentures within the

prescribed time frame.

(xvii) We have verified the end use of money raised by the Rights Issue

of simultaneous but unlinked issue of Equity Shares and Non Convertible

Debentures as disclosed in Note 3 of Schedule 14 Notes to the Balance

Sheet and the Profit and Loss Account.

(xviii) To the best of our knowledge and according to the information

and explanations given to us, no fraud by the Company and no materialfraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS For N. M. RAIJI & CO.

Chartered Accountants Chartered Accountants

(Registration No. 117366W) (Registration No. 108296W)

Nalin M. Shah Vinay D. Balse

Partner Partner

(Membership No.15860) (Membership No. 39434)

MUMBAI, 26th May, 2010


17/45

AUDITOR'S REPORT :

The Shareholders of Abirami Financial Services (India) Limited.

We have examined the attached Balance Sheet of ABIRAMI FINANCIAL SERVICES (INDIA) LIMITED as

at 31st March 2012 and the annexed Profit and Loss Account for the year ended on that date. These

financial statements are the responsibility of the Company's management. Our responsibility is to

express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 misstatements. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes

assessing the accounting principles used and significant estimates made by the management, as well

as evaluating the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

As required by the Companies Auditor's Report Order, 2003 issued by the Company Law Board in

terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the

matters specified in the said order.

Further to the comments in the annexure referred to paragraph 3 above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge

and belief were necessary for the purposes of our audit.

2. In our opinion, the Company has kept proper books of account as required by law so far as it

appears from our examination of such books.

3. The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement

with the books of account.

4. As per the information and explanations given to us and on the basis of the written

representation received from Directors, we report that none of the directors of the company


18/45

are prima facie disqualified from being appointed as directors of the Company as at 31st

March 2011, in terms of clause (g) of sub section (1) of section 274 of the Companies Act,

1956.

5. The said profit and loss account and the balance sheet comply with the Accounting Standards

referred to in Section 211(3C) of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations furnished

to us, the accounts read with the notes thereon give the information required by the

Companies Act, 1956 in the manner so required, give a true and fair view in conformity with

the accounting principles generally accepted in India.

In the case of Balance Sheet of the state of affairs of the Company as at31 March, 2012

In the case of the Profit and Loss Account, Profit for the year ended on that date.

ANNEXURE TO PARA 3 OF THE COMPANIES AUDITOR'S REPORT ORDER, 2003

1. (a) The Company has maintained proper records of fixed assets showing full particulars

including quantitative details and location.

(b) The Company has a regular programme of physical verification of its fixed assets which, in

our opinion, is reasonable having regard to the size of the company and the nature of its

assets. In accordance with this programme, fixed assets have been physically verified by the

management during the year and no material discrepancies have been identified on such

verification.

(c) The Company has not during the year disposed off a substantial part of its Fixed Assets.

2. (a) The Company, being Non-Banking Financial Company, does not have any inventory.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or

other parties listed in the register maintained under section 301 of the Act.


19/45

4. In our opinion, the company has an internal control system commensurate with the size of the

company and the nature of its business for purchase of inventory and fixed assets and for the

sale of goods and services.

5. a) The particulars of contracts or arrangements referred to in section 301 of the Act have been

entered in the register required and these transactions have been entered in the prevailing

market rates.

6. The company has not accepted any deposits from the public during the year of audit to which

provisions of section 58A and 58 AA of The Companies Act, 1956 are applicable.

7. The company has an internal audit system commensurate with its size and the nature of its

business.

8. According to the information and explanation given to us maintenance of cost records are not

applicable to the company.

9. (a) According to the information and explanation given to us the company is regular in

depositing undisputed statutory dues including income tax, Sales tax, etc to the appropriate

authorities.

10.As the Company has not incurred any cash loss this clause is not applicable to the company.

11.According to the information and explanations given to us and to the extent of our

examination of the records of the company it has not defaulted on repayment of dues to the

financial institution or bank.

12.The company has granted loans on the basis of any security and proper records of the same

are maintained.

13.The company is not a Chit Fund, and hence this clause is not applicable to the company.

14.As the company is dealing in shares, securities and proper records have been maintained of

the transactions and contracts and timely entries have been made therein. The investments

have been held by the company, in its own name.

15.As the company has not given any guarantee and hence this clause is not applicable to the

company.

16.The company has not availed any term loan except corporate borrowings.


20/45

17.In so far as our examination of the books of accounts the company has not applied Short Term

Funds for Long Term purposes.

18.The company has not made any preferential allotment of shares.

19.Debentures have not been issued by the company.

20.No public money has been raised during the year of audit.

21.There is no fraud on or by the company has been noticed or reported during the year.

22.We further report that the company is engaged in the business of Non Banking Financial

Institution and it has obtained a Certificate of Registration.

23.Company has fulfilled the norms in terms of Assets/Income pattern as on 31st March 2011.

24.Based on the criteria set forth by RBI, the company is not an AFC.

25.The Board of Directors have passed a resolution for Non-acceptance of any public deposits and

the company has not accepted the same during the financial year ended 31st March 2012.

26.The company has complied with the prudential norms relating to income recognition,

accounting standards, asset classification and provisioning for bad and doubtful debts as

applicable to it in terms of Non-Banking Financial (Non- Deposit Accepting or Holding)

Companies Prudential Norms (Reserve Bank) Directions, 2007.

Chennai - 17For R.Bhaskar & Co., Chartered Accountants

F.No.008860S R.Bhaskar, Properietor M.No.02658403/05/2012


21/45

. We have audited the attached Balance Sheet of TATA MOTORS LIMITED

(the Company) as at March 31, 2012, the Profit and Loss Statement and

the Cash Flow Statement of the Company for the year ended on that date,

both 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.

2. We conducted our audit in accordance with the auditing standards

generally accepted in India. Those Standards require that we plan and


financial statements are free of material misstatements. An audit


and the disclosures in the financial statements. An audit also includes

assessing the accounting principles used and the significant estimates

made by the Management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a reasonable

basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO)

issued by the Central Government in terms of Section 227(4A) of the

Companies Act, 1956, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.


above, we report as follows:

(a) we have obtained all the information and explanations which to the


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 Profit and Loss Statement and the Cash Flow


account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Statement

and the Cash Flow Statement dealt with by this report are in compliance

with the Accounting Standards referred to in Section 211(3C) of the

Companies Act, 1956;

(e) in our opinion and to the best of our information and according to

the explanations given to us, the said accounts give the information

required by the Companies Act, 1956 in the manner so required and give





(ii) in the case of the Profit and Loss Statement, of the profit of the

Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the

Company for the year ended on that date.


22/45

5. On the basis of the written representations received from the

Directors as on March 31, 2012 taken on record by the Board of

Directors, none of the Directors is disqualified as on March 31, 2012

from being appointed as a director in terms of Section 274(1) (g) of

the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 3 of our

report of even date)

(i) The nature of the Company''s business activities during the year are

such that clauses (xiii), and (xiv) of paragraph 4 of the Companies

(Auditors'' Report) Order, 2003 are not applicable to the Company.


(a) The Company has maintained proper records showing full particulars

including quantitative details and situation of fixed assets;

(b) The fixed assets were physically verified during the year by the

Management in accordance with a regular programme of verificationwhich, in our opinion, provides for physical verification of all the

fixed assets at reasonable intervals. According to the information and

explanation given to us, no material discrepancies were noticed on such

verification;

(c) The fixed assets disposed off during the year, in our opinion, do

not constitute a substantial part of the fixed assets of the Company

and such disposal, in our opinion, has not affected the going concern

status of the Company.


(a) As explained to us, the stock of finished goods (other than a

significant part of the spare parts held for sale) and work-in-progress

in the Company''s custody have been physically verified by the

Management as at the end of the financial year, before the year- end or

after the year-end, and in respect of stocks of stores and spares, the

aforesaid spare parts held for sale, and raw materials in the Company''s

custody, there is a perpetual inventory system and a substantial

portion of the stocks have been verified during the year. In our

opinion, the frequency of verification is reasonable. In case of

materials and spare parts held for sale lying with the third parties,

certificates confirming stocks have been received in respect of a

substantial portion of the stocks held during the year or at the

year-end;

(b) In our opinion and according to the information and explanationgiven to us, the procedures of physical verification of inventories

followed by the Management were reasonable and adequate in relation to

the size of the Company and the nature of its business;

(c) In our opinion and according to the information and explanations

given to us, the Company is maintaining proper records of inventory.

The discrepancies noticed on verification between the physical stocks

and the book records were not material having regard to the size of the

operations of the Company and have been properly dealt with in the


23/45

books of account.

(iv) In respect of loans, secured or unsecured, granted by the Company

to companies, firms or other parties covered in the Register under

Section 301 of the Companies Act, 1956, according to the information


(a) the Company has granted unsecured loans aggregating Rs.521.33 Crores

to four parties covered in the register maintained under Section 301 of

the Companies Act, 1956 (including Rs.86.92 Crores granted during the

year to two parties). At the year- end, the outstanding balances of

such loans aggregated Rs.579.36 Crores and maximum amount outstanding

during the year was Rs. 579.36 Crores.

(b) the rate of interest and other terms and conditions of such loans

are, in our opinion, prima facie not prejudicial to the interest of the

Company having regard to the market yields and the business

relationship with the Company to whom loans have been granted.

(c) The receipts of principal amount have been as per stipulations.

However, there have been delays in receipts of interest.

(d) There are no overdue amounts in respect of principal amount

outstanding. In respect of overdue interest amounts of more than rupees

one lakh remaining outstanding as at the year-end, except in respect of

interest outstanding from a subsidiary company for which the provision

has been made, the Management has taken reasonable steps for the

recovery of the overdue interest amounts.

In respect of loans, secured or unsecured, taken by the Company from

companies, firms or other parties covered in the Register maintained

under Section 301 of the Companies Act, 1956, according to the

information and explanations given to us:

(e) the Company has taken loans aggregating Rs.11.52 Crores from six

parties covered in the Register maintained under Section 301 of the

Companies Act, 1956. At the year-end, the outstanding balance of such

loans taken aggregated Rs. 0.20 Crores and the maximum amount outstanding

during the year was Rs.11.92 Crores.

(f ) the rate of interest and other terms and conditions of such loans

taken are, in our opinion, prima facie not prejudicial to the interests

of the Company.

(g) The principal amount is not due for repayment and the Company has

been regular in payment of interest.

(v) In our opinion and according to the information and explanationsgiven to us, having regard to the explanations that some of the items

purchased are of special nature and suitable alternative sources do not

exist for obtaining comparable quotations, there exists an adequate

internal control system commensurate with the size of the Company and

the nature of its business with regard to purchases of inventory and

fixed assets and with regard to the sale of goods and services. During

the course of our audit, we have not observed any major weakness in

such internal control system.


24/45

(vi) In respect of contracts or arrangements entered in the register

maintained in pursuance of Section 301 of the Companies Act, 1956, to

the best of our knowledge and belief and according to the information


(a) The particulars of contracts or arrangements referred to Section

301 that needed to be entered in the register maintained under the said

section have been so entered.

(b) Where each of such transaction is in excess of rupees five lakhs in

respect of any party, and having regard to our comments in para (v)

above, the transactions have been made at prices which are prima facie

reasonable having regard to the prevailing market prices at the

relevant time.

(vii) In our opinion and according to the information and explanations

given to us, the Company has complied with the provisions of Sections

58A and 58AA or any other relevant provisions of the Companies Act,

1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard

to the deposits accepted from the public. According to the information

and explanations given to us, no order has been passed by the CompanyLaw Board or the National Company Law Tribunal or the Reserve Bank of

India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an adequate internal audit

system commensurate with the size and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the

Company pursuant to the Companies (Cost Accounting Records) Rules, 2011

prescribed by the Central Government under Section 209 (1)(d) of the

Companies Act, 1956 and are of the opinion that prima facie, the

prescribed cost records have been maintained. We have, however, not

made a detailed examination of the cost records with a view to

determine whether they are accurate or complete.

(x) According to the information and explanations given to us in

respect of statutory dues:

(a) The Company has generally been regular in depositing with the

appropriate authorities undisputed 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 applicable to it. With

regard to the contribution under the Employees'' Deposit Linked

Insurance Scheme, 1976 (the Scheme), we are informed that the Company

has its own Life Cover Scheme, and consequently, an application has

been made seeking an extension of exemption from contribution to the

Scheme, which is awaited.

(b) There were no undisputed amounts payable in respect of provident

fund, investor education and protection fund, employees'' state

insurance, income-tax, wealth tax, service tax, customs duty, excise

duty, cess and other material statutory dues applicable to the Company

that were in arrears as at March 31, 2012 for a period of more than six

months from the date they became payable.

(c) Details of dues of income-tax, sales tax, wealth tax, service tax,


25/45

customs duty, excise duty and cess which have not been deposited as on

March 31, 2012 on account of any disputes are given below:

Nature of the Statute Nature of the Dues Amount

(Rs.in crores)

Income Tax Laws Income Tax 7.48

Income Tax 45.24

Central Excise Laws Excise Duty & Service Tax 6.53

Excise Duty & Service Tax 564.55




Sales Tax Laws Sales Tax 13.01

Sales Tax 77.52

Sales Tax 21.46

Sales Tax 0.20

Sales Tax 215.79

Sales Tax 24.34

Sales Tax 1.26

Sales Tax 0.07

Sales Tax 0.44

Name of the Period to which the amount Forum where Pending

Statue relates to

Income Tax Laws 1998-99, 1999-00, 2005-06 Appellate Tribunal

2003-04 to 2010-11 Commissioner

Central Excise Laws 2008-09 to 2011-12 High Court

2004-05 to 2011-12 Appellate Tribunal

1984-85, 1995-96,2003-04,

2006-07 to 2011-12 Commissioner (Appeals)

2011-12 Additional Commissioner


26/45

2011-12 Deputy Commissioner

Sales Tax Laws 1995-96 Supreme Court

1984-85 to 1990-91, 1993-94,

1994-95, 1997-98, 2000-01,

2002-03, 2005-06 to 2007-08 High Court

1988-89, 1989-90, 1992-93,

1994-95, 1995-96, 1998-99 to

2000-01, 2002-03 to 2007-08,

2010-11 Tribunal

1996-97, 1998-99, 2001-02 Commissioner (Appeals)

1997-98, 1999-00, 2001-02

to 2008-09 Joint Commissioner

1988-89, 1989-90, 1995-96,

1997-98, 2005-06 to 2007-08,

2009-10, 2010-11 Additional Commissioner

1979-80,1994-95 to 1997-98,

2000-01, 2003-04, 2006-07,

2010-11 Deputy Commissioner

1986-87, 1995-96, 1997-98,

1988-89, 1990-91, 1999-2000 Assistant Commissioner

1995-96, 2000-01, 2001-02,

2004-05, 2006-07, 2007-08,

2009-10 Trade Tax Officer

(xi) The Company does not have any accumulated losses at the end of the

financial year and has not incurred cash losses during the financial

year covered by our audit and the immediately preceding financial year.

(xii) In our opinion and according to the information and explanations

given to us, the Company has not defaulted in the repayment of dues to

banks, financial institutions and debenture holders.

(xiii) Based on our examination of the records and the information and

explanations given to us, the Company has not granted any loans and

advances on the basis of security by way of pledge of shares,

debentures and other securities.


27/45

(xiv) In our opinion and according to the information and explanations

given to us, the Company has not given any guarantee for loans taken by

others from banks or financial institutions. Accordingly, the

provisions of clause (xv) of Paragraph 4 of the Companies (Auditor''s

Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and according to the information and explanations

given to us, the term loans have been applied for the purposes for

which they were obtained.

(xvi) In our opinion and according to the information and explanations

given to us and on an overall examination of the Balance Sheet of the

Company, as at March 31, 2012, we report that funds raised on short

term basis of Rs.3,595.61 Crores have been used during the year for

long-term investment. Further the Company has explained that steps are

being taken to augment long term funds.

(xvii) According to the information and explanations given to us, the

Company has not made any preferential allotment of shares to parties

and companies covered in the register maintained under Section 301 of

the Companies Act, 1956.

(xviii) According to the information and explanations given to us,

during the period covered by our audit report, the Company has not

issued any secured debentures. .

(xix) According to the information and explanations given to us, during

the year covered by our audit report, the Company has not raised any

money by public issue.

(xx) 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 has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS


(Registration No. 117366W)

N. VENKATRAM

Partner

MUMBAI, May 29, 2012. (Membership No.71387)


28/45

TO THE MEMBERS OF TATA MOTORS LIMITED

1. We have audited the attached Balance Sheet ofTATA MOTORS LIMITED ("theCompany") as at March 31, 2011, the

Profit and Loss Account and the Cash FlowStatement of the Company for the year ended on that date, both annexed

thereto. Thesefinancial statements are the responsibility of the Company's Management. Ourresponsibility is to express an

opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of

material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in

the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made

by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a

reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by theCentral Government in terms of

Section 227(4A) of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in

paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we reportas follows:

(a) we have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as it appears from our

examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement

with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report are

in compliance with the Accounting Standardsreferred to in Section 211 (3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts give the

information required by the Companies Act, 1956 inthe manner so required and give a true and fair view in conformity with

the accountingprinciples generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2011;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

5. On the basis of the written representations received from the Directors as on March31, 2011 taken on record by the Board

of Directors, none of the Directors is disqualifiedas on March 31, 2011 from being appointed as a director in terms of Section

274(1) (g) ofthe Companies Act, 1 956.

For DELOITTE HASKINS & SELLS


(Registration No. 117366W)

N. VENKATRAM

Partner

MUMBAI, May 26, 2011 (Membership No.71387)

(Referred to in paragraph 3 of our report of even date)

(i) The nature of the Company's business activities during the year are such thatclauses (xiii), and (xiv) of paragraph 4 of the

Companies (Auditors' Report) Order, 2003are not applicable to the Company.


(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed

assets;

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of

verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to

theinformation and explanation given to us, no material discrepancies were noticed on suchverification;

(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the

Company and such disposal, in our opinion, hasnot affected the going concern status of the Company.



29/45

(a) As explained to us, the stock of finished goods (other than a significant part ofthe spare parts held for sale) and work-in-

progress in the Company's custody have beenphysically verified by the Management as at the end of the financial year,

before theyear-end or after the year-end, and in respect of stocks of stores and spares, theaforesaid spare parts held for

sale, and raw materials in the Company's custody, there isa perpetual inventory system and a substantial portion of the

stocks have been verifiedduring the year. In our opinion, the frequency of verification is reasonable. In case ofmaterials and

spare parts held for sale lying with the third parties, certificatesconfirming stocks have been received in respect of a

substantial portion of the stocksheld during the year or at the year-end;(b) In our opinion and according to the information and explanation given to us, theprocedures of physical verification of

inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the

nature of itsbusiness;

(c) In our opinion and according to the information and explanations given to us, theCompany is maintaining proper records

of inventory. The discrepancies noticed onverification between the physical stocks and the book records were not material

havingregard to the size of the operations of the Company and have been properly dealt with inthe books of account.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies,firms or other parties covered in the

Register under Section 301 of the Companies Act,1956, according to the information and explanations given to us:

(a) the Company has granted unsecured loans aggregating T415.24 Crores to four partiescovered in the register maintained

under Section 301 of the Companies Act, 1956 (including?174.24 Crores granted during the year to four parties). At the

year-end, the outstandingbalances of such loans aggregated T434.41 Crores and maximum amount outstanding during

theyear was ? 434.41 Crores.

(b) the rate of interest and other terms and conditions of such loans are, in ouropinion, prima facie not prejudicial to the

interest of the Company having regard to themarket yields and the business relationship with the Company to whom loans

have beengranted.

(c) The receipts of principal amounts have been as per stipulations however there havebeen delays in receipts of interests.

(d) There are no overdue amounts in respect of principal outstanding. In respect ofoverdue interest amounts of more than

rupees one lakh remaining outstanding as at theyear-end, the Management has taken reasonable steps for the recovery of

the overdueinterest amounts.

In respect of loans, secured or unsecured, taken by the Company from companies, firmsor other parties covered in the

Register maintained under Section 301 of the CompaniesAct, 1956, according to the information and explanations given to

us:

(e) the Company has taken loans aggregating T11.52 Crores from six parties covered inthe Register maintained under

Section 301 of the Companies Act, 1956 (including ?1 Crorefrom one party during the year). At the year-end, the

outstanding balance of such loanstaken aggregated T11.52 Crores and the maximum amount outstanding during the year

wasT18.04 Crores.

(f) the rate of interest and other terms and conditions of such loans taken are, in ouropinion, prima facienot prejudicial to the

interests of the Company.

(g) The principal amount is not due for repayment and the Company has been regular inpayment of interest.

(v) In our opinion and according to the information and explanations given to us,having regard to the explanations that some

of the items purchased are of special natureand suitable alternative sources do not exist for obtaining comparable

quotations, thereexists an adequate internal control system commensurate with the size of the Company andthe nature of its

business with regard to purchases of inventory and fixed assets and withregard to the sale of goods and services. During

the course of our audit, we have notobserved any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the register maintained inpursuance of Section 301 of the Companies

Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed tobe entered in the register maintained

under the said section have been so entered.(b) Where each of such transaction is in excess of rupees five lakhs in respect of anyparty, and having regard to our

comments in para (v) above, the transactions have beenmade at prices which are prima facie reasonable having regard to

the prevailing marketprices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, theCompany has complied with the

provisions of Sections 58A and 58AA or any other relevantprovisions of the Companies Act, 1956 and the Companies

(Acceptance of Deposits) Rules,1975 with regard to the deposits accepted from the public. According to the informationand

explanations given to us, no order has been passed by the Company Law Board or theNational Company Law Tribunal or

the Reserve Bank of India or any Court or any otherTribunal.


30/45

(viii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of its

business.

(ix) We have broadly reviewed the books of account relating to the manufacture of motorvehicles pursuant to the Rules

made by the Central Government for the maintenance of costrecords under Section 209 (1 )(d) of the Companies Act, 1956

and are of the opinion thatprima facie, the prescribed accounts and records have been made and maintained. We

have,however, not made a detailed examination of the records with a view to determining whetherthey are accurate or

complete. To the best of our knowledge and according to theinformation and explanations given to us, the CentralGovernment has not prescribedmaintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing with the appropriateauthorities undisputed dues, including

provident fund, investor education and protectionfund, employees' state insurance, income-tax, sales tax, wealth tax, service

tax, customsduty, excise duty, cess and other material statutory dues applicable to it. With regard tothe contribution under

the Employees' Deposit Linked Insurance Scheme, 1976 (the Scheme),we are informed that the Company has its own Life

Cover Scheme, and consequently, anapplication has been made seeking an extension of exemption from contribution to

theScheme, which is awaited. Further, since the Central Government has till date notprescribed the amount of cess payable

under Section 441 A of the Companies Act, 1 956, weare not in a position to comment upon the regularity or otherwise of

the Company indepositing the same.

(b) There were no undisputed amounts payable in respect of provident fund, investoreducation and protection fund,

employees' state insurance, income-tax, wealth tax, servicetax, customs duty, excise duty, cess and other material statutory

dues applicable to theCompany that were in arrears as at March 31, 2011 for a period of more than six monthsfrom the date

they became payable.

(c) Details of dues of income-tax, sales tax, wealth tax, service tax, customs duty,excise duty and cess which have not been

deposited as on March 31, 2011 on account of anydisputes are given below:

Name of the

Statute

Nature of the

Dues

Amount (? in

crores)Period to which the amount relates

Forum where

pending

Income Tax

LawsIncome Tax 27.94 1 997-98, 2002-03 and 2005-06 Appellate Tribunal

Income Tax 38.921 984-85, 1 985-86, 1 986-87, 2004-05, 2005-06,

2006-07, 2007-08 and 2008-09Commissioner

Central

Excise Laws

Excise Duty &

Service Tax0.49 201 0-11 High Court

Excise Duty &

Service Tax481.22

1993-94 to 1994-95,1999-00, 2002-03 2004-05 to

201 0-11Appellate Tribunal

Excise Duty &

Service Tax7.96

1 984-85, 1 994-95 to 1 995-96, 2003-04, 2006-07

to 2007-08 and 2009-10 to 2010-11

Commissioner

(Appeals)

Excise Duty &

Service Tax0.1 8 2007-08, 2008-09

Additional

Commissioner

Sales Tax

LawsSales Tax 1 3.01 1995-96 Supreme Court

Sales Tax 574.86 1984-85 to 1990-91,1993-94 to 2007-08 High Court

Sales Tax 21 .611988-89 to 1989-90, 1992-93, 1995-1996 to1996-

97, 1999-2000 to 2000-01, 2004-05 to 2006-07Appellate Tribunal

Sales Tax 0.20 1 996-97, 1 998-99, 2001 -02Commissioner

(Appeals)

Sales Tax 21 6.79 1 997-98 to 2008-09Joint

Commissioner

Sales Tax 1 6.311979-80, 1986-87, 1992-93, 1994-95, 1996-97

1998-99 to 2000-01, 2003-04 to 2008-09

Deputy

Commissioner

Sales Tax 1 28.57 1 988-89 to 1 989-90, 1 995-96, 1 997-98, 2005-06 Additional


31/45

to 2010-11 Commissioner

Sales Tax 0.071 986-87, 1 988-89, 1 990-91 , 1 995-96, 1 997-98,

1 999-2000

Assistant

Commissioner

Sales Tax 1 .841986-87, 1990-91 to 1991-92, 1993-94, 1996-97,

1999-2000 to 2001-02Trade Tax Officer

(xi) The Company does not have any accumulated losses at the end of the financial yearand has not incurred cash lossesduring the financial year covere by our audit and theimmediately preceding financial year.

(xii) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the

repayment of dues to bank financial institutions anddebenture holders.

(xiii) Based on our examination of the records and the information and explanationsgiven to us, the Company has not

granted any loans and advances o the basis of security byway of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanations given to us, theCompany has not given any guarantee

for loans taken by othei from banks or financialinstitutions. Accordingly, the provisions of clause (xv) of Paragraph 4 of the

Companies(Auditor's Report) Order, 2003 are nc applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, theterm loans have been applied for the

purposes for which they wer obtained.

(xvi) In our opinion and according to the information and explanations given to us andon an overall examination of the

Balance Sheet of the Company as at March 31, 2011, wereport that funds raised on short term basis of ? 4,797.78 Crores

have been used duringthe year for long-term investmen Further the Company has explained that steps are beingtaken toaugment long term funds.

(xvii) According to the information and explanations given to us, the Company has notmade any preferential allotment of

shares to parties and companie covered in the registermaintained under Section 301 of the Companies Act, 1956.

(xviii) According to the information and explanations given to us, during the periodcovered by our audit report, the Company

has issued 5,000 debenture of Rs 10 lakhs each.The Company has created security in respect of 5,000 debentures issued

in the current yearand in respect of 2,000 debenture issued in month of March 2010.

(xix) According to the information and explanations given to us, during the yearcovered by our audit report, the Company

has not raised any money b public issue.

(xx) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company

and no material fraud on th Company has been noticedor reported during the year.

ForDELOITTE HASKINS & SELLS

Chartered Accountants(Registration No. 117366W)

N. VENKATRAM

Partner

MUMBAI, May 26, 2011 (Membership No.71 387)


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Auditor's Report (Reliance Industries) Year E

1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES

LIMITED as at March 31, 2012, the Statement of Profit and Loss and the

Cash Flow Statement for the year ended on that date annexed thereto.

These financial statements are the responsibility of the Company''s

management. Our responsibility is to express an opinion on these

financial statements based on our audit.

2. We conducted our audit in accordance with the Auditing Standards

generally accepted in India. Those standards require that we plan and


financial statements are free of material misstatement. An audit


and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made

by management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for

our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003 issued

by the Central Government of India in terms of sub-section (4A) ofSection 227 of the Companies Act, 1956, we enclose in the Annexure a

statement on the matters specified in paragraphs 4 and 5 of the said

Order.


above, we report that:

a) We have obtained all the information and explanations which to the


audit;

b) In our opinion, proper books of account, as required by law, have

been kept by the Company, so far as appears from our examination ofthose books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow


account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and

Cash Flow Statement dealt with by this report are in compliance with

the Accounting Standards referred to in sub-section (3C) of Section 211

of the Companies Act, 1956.

e) On the basis of written representations received from the Directors

as on March 31, 2012 and taken on record by the Board of Directors, we

report that none of the Directors is disqualified as on March 31, 2012from being appointed as a director in terms of clause (g) of sub -

section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to

the explanations given to us, the said accounts read together with the

Significant Accounting Policies and notes thereon give the information

required by the Companies Act, 1956, in the manner so required and give



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(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.

Annexure to Auditors-Report

Referred to in Paragraph 3 of our report of even date

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars

including quantitative details and situation of fixed assets on the

basis of available information.

b) As explained to us, all the fixed assets have been physically

verified by the management in a phased periodical manner, which in our

opinion is reasonable, having regard to the size of the Company and

nature of its assets. No material discrepancies were noticed on such

physical verification.

c) In our opinion, the Company has not disposed off a substantial part

of its fixed assets during the year and the going concern status of the

Company is not affected.

2. In respect of its inventories:

a) The inventories have been physically verified during the year by the

management. In our opinion, the frequency of verification is

reasonable.

b) In our opinion and according to the information and explanations

given to us, the procedures of physical verification of inventories

followed by the management are reasonable and adequate in relation to

the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventories. As

explained to us, there were no material discrepancies noticed on

physical verification of inventories as compared to the book records.

3. In respect of the loans, secured or unsecured, granted or taken by

the Company to / from companies, firms or other parties covered in theregister maintained under Section 301 of the Companies Act, 1956:

a) The Company has given loans to two subsidiaries. In respect of the

said loans, the maximum amount outstanding at any time during the year

was Rs 10,254 crore and the year-end balance is Rs 10,239 crore

(including interest free loan of Rs 6,615 crore).

b) In our opinion and according to the information and explanations

given to us, the rate of interest and other terms and conditions of the


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loans given by the Company, are not prima facie prejudicial to the

interest of the Company.

c) The principal amounts are repayable over a period of three to five

years, while the interest is payable annually at the discretion of the

Company.

d) In respect of the said loans and interest thereon, there are no

overdue amounts.

e) The Company has not taken any loan during the year from companies,

firms or other parties covered in the Register maintained under Section

301 of the Companies Act, 1956. Consequently, the requirements of

Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not

applicable.

4. In our opinion and according to the information and explanations

given to us, there is an adequate internal control system commensurate

with the size of the Company and the nature of its business for the

purchases of inventory and fixed assets and for the sale of goods and

services. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in internal control

system.

5. In respect of the contracts or arrangements referred to in Section

301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations

given to us, the transactions made in pursuance of contracts or

arrangements that need to be entered in the register maintained under

Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations

given to us, the transactions made in pursuance of contracts /

arrangements entered in the Register maintained under section 301 of

the Companies Act, 1956 and exceeding the value of Rs 5,00,000 in

respect of each party during the year have been made at prices which

appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the

Company has not accepted any deposit from the public. Therefore, the

provisions of Clause (vi) of paragraph 4 of the Order are not

applicable to the Company.

7. In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Accounting Records) Rules, 2011

prescribed by the Central Government under Section 209(1)(d) of the

Companies Act, 1956 and are of the opinion that prima facie the

prescribed cost records have been maintained. We have, however, not

made a detailed examination of the cost records with a view to

determine whether they are accurate or complete.

9. In respect of statutory dues:


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a) According to the records of the Company, 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 statutory dues have

been generally regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no

undisputed amounts payable in respect of the aforesaid dues were

outstanding as at March 31, 2012 for a period of more than six months

from the date of becoming payable. Amounts due and outstanding for a

period exceeding 6 months as at March 31, 2012 to be credited to

Investor Education and Protection Fund of Rs 9 crore, which are held in

abeyance due to pending legal cases, have not been considered.

b) The disputed statutory dues aggregating Rs 828 crore that have not

been deposited on account of disputed matters pending before

appropriate authorities are as under:

Sr. Name of Nature of Amount Period to Forum where

No the Statute the Dues (Rs. in which the dispute is

crore) amount pending

relates

1. Central

Excise Excise Duty 19 Various

years Commissioner of

Act, 1944 and Service from

1995-96 Central Excise

Tax to 2010-11 (Appeals)

104 Various

years Central Excise

from

1991-92 & Service Tax

to 2010-11 Appellate

Tribunal

2. Central

Sales Tax Sales Tax/ 40 Various

years Joint/Deputy

Act,

1956 and VAT and from

1991-92 Commissioner/

Sales

Tax Acts Entry Tax to 2009-10 Commissioner

of various

states (Appeals)

26 Variousyears Sales Tax

from

1993-94 Appellate

to 2009-10 Tribunal

398 Various

years High Court

from

1997-98


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to 2009-10

1 2007-08 Supreme Court

3. Customs

Act, Custom Duty 240 2005-06 Central Excise

1962 and 2007-08 & Service Tax

Appellate

Tribunal

TOTAL 828

10. The Company does not have accumulated losses at the end of the

financial year. The Company has not incurred cash losses during the

financial year covered by the 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 dues to financial institutions, banks and

debenture holders.

12. In our opinion and according to the explanations given to us and

based on the information available, no loans and advances have been

granted by the Company on the basis of security by way of pledge of

shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi / mutual

benefit fund / society. Therefore, the provisions of clause (xiii) of

paragraph 4 of the Order are not applicable to the Company.

14. The Company has maintained proper records of the transactions and

contracts in respect of dealing or trading in shares, securities,

debentures and other investments and timely entries have been made

therein. All shares, securities, debentures and other investments have

been held by the Company in its own name.

15. The Company has given guarantees for loans taken by Others from

banks and financial institutions. According to the information and

explanations given to us, we are of the opinion that the terms and

conditions thereof are not prima facie prejudicial to the interest of

the Company.

16. The Company has raised new term loans during the year. The term

loans outstanding at the beginning of the year and those raised during

the year have been applied for the purposes 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 are ofthe opinion that there are no funds raised on short-term basis that

have been used for long- term investment.

18. The Company has not made any 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 created securities / charges in respect of secured

debentures issued.


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