1.  We have audited the attached Balance Sheet of Advanta India Limited
 as at December 31, 2010 and also the Profit and Loss Account and the
 Cash Flow Statement of the Company for the year ended on that date,
 annexed thereto. These financial statements are the responsibility of
 the 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 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 signifcant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the
 Order), we enclose in the Annexure, a statement on the matters
 specifed in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The balance sheet, the Profit and loss account and the cash fow
 statement dealt with by this report are in agreement with the books of
 account;
 
 (d) In our opinion, the balance sheet, the Profit and loss account and
 the cash fow statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956;
 
 (e) On the basis of written representations received from the
 Directors, as on December 31, 2010 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualifed as on
 December 31, 2010 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with the
 notes 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 December 31, 2010;
 
 b) In the case of the Profit and loss account, of the loss of the
 Company for the year ended on that date; and
 
 c) In the case of cash fow statement, of the cash fows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 Advanta India Limited (the Company)
 
 (i) (a) The Company has maintained proper records to show full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, some of the fixed assets have been physically
 verifed by the management under the phased programme of physical
 verifcation which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. The frequency of
 verifcation is reasonable and no material discrepancies have been
 noticed on such physical verifcation.
 
 (c) There was no substantial disposal of the fixed assets during the
 year.
 
 (ii) (a) The management has conducted physical verifcation of inventory
 at reasonable intervals.
 
 (b) The procedures of physical verifcation 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 is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verifcation.
 
 (iii) (a) The Company has granted loan to a Company covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 2,822.76 lacs and the
 year-end balance of the loan granted to such company was Rs. 1,496.48
 lacs.
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and the other terms and conditions
 for said loan are not prima facie prejudicial to the interest of the
 Company.
 
 (c) The loans granted are repayable on demand. As informed, the
 repayment of principal amount and payment towards interest are made as
 and when demanded by the Company.
 
 (d) There is no overdue amount of loan granted to a company covered in
 the register maintained under section 301 of the Companies Act, 1956.
 
 (e) The Company has taken loan from a company covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs. 37,500 lacs and the year-end
 balance of the loan taken from such company was Rs. 37,500 lacs.
 
 (f) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (g) In respect of loans taken, repayment of the principal amount is as
 stipulated and payment of interest has been regular.
 
 (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 for the
 purchases of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, no major weakness has been
 noticed in the internal control system in respect of these areas.
 During the course of our audit, we have not observed any continuing
 failure to correct major weakness in internal control system of the
 company.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Companies Act, 1956 that
 need to be entered into the register maintained under section 301 have
 been so entered.
 
 (b) In respect of transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs entered into during
 the financial year, because of the unique and specialized nature of the
 items involved and absence of any comparable prices, we are unable to
 comment whether the transactions were made at 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 its size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for
 the products of the Company.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and
 other material statutory dues applicable to it. Excise duty is not
 applicable to the Company.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise of
 the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, cess and other
 undisputed statutory dues were outstanding, at the year end, for a
 period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax on account of any dispute are as follows:
 
 Name of        Nature          Amount          Period to
 the            of Dues         (Rs.in lacs)    which the
 Statute                        Amount relates
 
 Income Tax 
 Act,           Income Tax       0.07            Assessment year
 1961                                            2002-03
 
                                 4.84            Assessment year
                                                 2004 -05
 
                               199.86            Assessment year
                                                 2005-06
 
                               434.93            Assessment year
                                                 2006-07
 
 Income Tax Act, 1961          Fourm where dispute is pending
 
                               Commissioner of Income Tax (Appeals)
 
                               Commissioner of Income Tax (Appeals)
 
                               Commissioner of Income Tax (Appeals)
 
                               Commissioner of Income Tax (Appeals)
 
 According to the information and explanation given to us, there are no
 dues of sales tax, wealth-tax, service tax, customs duty and cess which
 have not been deposited on account of any dispute. Excise duty is not
 applicable to the Company.
 
 (x) The Companys accumulated losses at the end of the financial year
 are less than ffty per cent of its net worth and it has incurred cash
 losses in the current and immediately preceeding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to bank. The Company has
 no outstanding dues in respect of a financial institution or
 debentures.
 
 (xii) According to the information and explanations given to us and
 based on the document and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual Benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Order are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of the Order are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from bank or
 financial institutions, the terms and conditions whereof in our opinion
 are not prima-facie prejudicial to the interest of the Company.
 
 (xvi) Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) 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
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (xix) The Company did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money through public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
                                     For S.R. Batliboi & Associates
                                     Firm Registration No. 101049W 
                                     Chartered Accountants
 
                                     per Sudhir Soni
                                     Partner 
                                     Membership No.: 41870  
 
 Place : Hyderabad 
 Date : February 28, 2011