DSP Merrill Lynch

1.  We have audited the attached Balance Sheet of DSP Merrill Lynch
 Limited, as at 31 March, 2009 and also the Profit and Loss Account and
 the Cash Flow Statement for the year ended on that date. 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 significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, issued
 by the Central Government in terms of sub-section (4A) of section 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.
 
 Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit.
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books.
 
 c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the above books of
 account.
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 e) Mr. Damian Chunilal who is one of the directors of the company has
 not produced any written representation as to whether he suffers from
 any disqualification in terms of section 274(1)(g) as at 31 March,
 2009. In the absence of the above representation, we are unable to
 comment whether Mr. Damian Chunilal is disqualified from being a
 director in terms of section 274(1)(g). As far as other directors are
 concerned, on the basis of written representations received from the
 directors as at 31 March, 2009 and taken on record by the Board of
 Directors, we report that none of the remaining directors are
 disqualified as at 31 March, 2009 from being appointed as directors 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:
 
 (i) in the case of Balance Sheet, of the state of affairs of the
 Company, as at 31 March, 2009;
 
 (ii) in the case of Profit and Loss Account, of the profit for the year
 ended on that date; and
 
 (iii) in the case of Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 Annexure to the Auditors Report
 
 (Referred to in Paragraph 3 of our report of even date)
 
 1.  The nature of the Companys activities during the period is such
 that the requirements of clauses (i)(c), (ii), (iii), (vi), (viii),
 (x), (xii), (xiii), (xv), (xviii), (xix) and (xx) of the Order are not
 applicable to the Company.
 
 2.  In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets have been physically verified by the management
 during the year. According to the information and explanations given to
 us, no material discrepancies were noticed on such verification.
 
 3.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business for the purchase of fixed assets and sale of services. The
 nature of the Companys activities is such that there are no purchases
 of inventory. We have not observed any continuing failure to correct
 major weaknesses in such internal controls.
 
 k. 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 the contracts or arrangements referred to in
 section 301 that needed to be entered into the register, maintained
 under the said section have been so entered.
 
 b) In respect of services obtained/rendered by the Company from/to
 parties entered in the said register and where the total value of
 services exceeds Rs. 5 lacs during the year, have been made at prices
 which are prima facie reasonable having regard to the prevailing market
 prices at the relevant time except that in respect of services for
 sub-underwriting aggregating to Rs. 25,238 (000) where we were
 informed that there are no alternate acceptable sources of information
 since similar transaction with other parties has not been made and
 hence no pricing comparison was possible.
 
 5. The global internal audit department (IAD) of Merrill Lynch & Co.,
 Inc. performs the internal audit function of all the Merrill Lynch
 entities worldwide (including for the Company) in accordance with their
 global programme. In our opinion, the internal audit so conducted is
 commensurate with the size of the company and the nature of the
 business.
 
 6.  In respect of statutory dues according to the information and
 explanations given to us:
 
 a) The Company has been generally regular in depositing undisputed
 statutory dues, including Provident Fund, Income-tax, Service Tax, Cess
 and any other material statutory dues with the appropriate authorities
 during the year.
 
 b) According to the information and explanations given to us, there are
 no disputed Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
 Duty and Cess which have not been deposited with the relevant
 authority.
 
 7.  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.
 
 8.  Based on our examination of the records and evaluation of the
 related internal controls, the Company has maintained proper records of
 transactions and contracts in respect of its dealings in shares,
 securities, debentures and other investments and timely entries have
 been made therein. The aforesaid investments have been held by the
 Company in its own name.
 
 9.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 availed by the company were prima facie applied by the company during
 the year for the purposes for which loans were obtained.
 
 10.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, funds
 raised on short-term basis have, prima facie, not been used for long
 term investment.
 
 11.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 was noticed or reported during the period.
 
                                    For Deloitte Haskins & Sells
                                           Chartered Accountants
                                                P. B. Pardiwalla
                                                         Partner
                                             Membership No. 40005
 
 Place: Mumbai
 Dated: 29th June, 2009