Financial Technologies

1, We have audited the attached Balance Sheet of Financial Technologies
 (India) Ltd. as at 31sMarch 2009, 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 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 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.
 
 4, Without qualifying our opinion, we draw attention to Note 25 to
 Schedule 15-11 of the financial statements regarding investments in
 certain subsidiaries aggregating Rs 4,326,274,551/- which are yet to
 break even (share of cumulative losses Rs 1,210,751,139/-) against
 which provision for diminution of Rs 509,625,934/- is considered
 adequate based on their business plans.
 
 5, Further to our comments in the Annexure referred to above, we report
 that:
 
 i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii) 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;
 
 iii) 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;
 
 iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956;
 
 v) On the basis of written representations received from the directors,
 as on 31sMarch 2009 and taken on record by the board of directors, we
 report that none of the directors is disqualified as on 31sl March 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read with the
 significant accounting policies and other notes thereon, give the
 information reguired by the Companies Act, 1956, in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2009;
 
 b) in the case of the Profit And Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 RE: FINANCIAL TECHNOLOGIES (INDIA) LTD.
 
 Referred to in Paragraph 3 of our report of even date
 
 i) In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets of the Company are physically verified by the
 Management according to a phased programme designed to cover all items
 over a period of two years, which in our opinion, is reasonable having
 regard to the size of the Company and nature of its assets. Pursuant to
 the programme, a portion of the fixed assets of the Company has been
 physically verified by the management during the year and no material
 discrepancies were noticed on such verification as compared with the
 records of fixed assets maintained by the Company
 
 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
 
 ii) a) In our opinion, verification of inventories has been carried out
 at reasonable intervals by the management during the year.
 
 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) 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. There are no closing inventories.
 
 iii) The Company has not granted or taken any loans, secured or
 unsecured, to / from parties covered in the register maintained under
 section 301 of the Companies Act 1956 and accordingly, clause 4 (iii)
 of the Order is not applicable to the Company.
 
 iv) In our opinion and according to the information and explanations
 given to us, there is an internal control system commensurate with the
 size of the Company and nature of its business for purchase of
 inventory and fixed assets and sale of goods and services. During the
 course of our audit, we have not observed any continuing failure to
 correct major weaknesses in the internal control system.
 
 v) In respect of contracts and arrangements entered in the register
 maintained in pursuance of Section 301 of the Companies Act 1956:
 
 a) To the best of our knowledge and belief and according to the
 information and explanations given to us, particulars of contracts or
 arrangements that needed to be entered into the register .maintained
 under the said section have been so entered
 
 b) According to information and explanations given to us, where the
 transactions made in pursuance of such contracts or arrangements during
 the year are in excess of Rs 500,000/- they have been made at prices,
 which are, prima facie, 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 internal audit function carried out during the
 year by a firm of Chartered Accountants appointed by the management is
 commensurate with the size of the Company and the nature of its
 business.
 
 viii) According to the information and explanations given to us, the
 Central Government has not prescribed maintenance of cost records under
 clause (d) of sub-section (1) of Section 209 of the Act. Accordingly,
 clause 4(viii) of the Order is not applicable to the Company.
 
 ix) According to the information and explanations given to us in
 respect of statutory and other dues:
 
 a) The Company has generally been regular in depositing with the
 appropriate authorities, undisputed statutory dues including provident
 fund, investor education and protection fund, employees state
 insurance, income tax, sales tax, wealth tax, service tax, custom duty,
 excise duty, cess and any other statutory dues applicable to it.
 According to the information and explanations given to us, there are no
 undisputed amounts payable in respect of the aforesaid statutory dues
 as at 31s1 March 2009 outstanding for a period more than six months
 from the date they became payable.
 
 b) According to the information and explanations given to us, there are
 no dues of sales tax / income tax / wealth tax / service tax / customs
 duty / excise duty and cess, which have not been deposited on account
 of any dispute
 
 x) The Company has no accumulated losses as at the end of the financial
 year and it has not incurred cash losses during the financial year
 covered by our audit and in the immediately preceeding financial year,
 
 xi) 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,
 
 xii) 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 any other securities and
 accordingly, clause 4(xii) of the Order is not applicable to the
 Company,
 
 xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi / mutual benefit
 fund / society. Accordingly, clause 4(xiii) of the Order is not
 applicable to the Company
 
 xiv) In our opinion and according to the information and explanations
 given to us, the Company is not dealing or trading in shares,
 securities, debentures and other investments. Accordingly, clause
 4(xiv) of the Order is not applicable to the Company.
 
 xv) 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 its subsidiary companies from banks, are
 not prima facie prejudicial to the interests of the Company
 
 xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, the Company
 has not availed any term loans during the year and hence clause 4(xvi)
 of the Order is not applicable to the Company.
 
 xvii) According to 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 not, prima facie, been used for long term
 investment.
 
 xviii) According to the information and explanations given to us, the
 Company has not made any preferentiai allotment of shares to parties
 and companies covered in the register maintained under Section 301 of
 the Companies Act, 1956. Accordingly, clause 4(xviii) of the Order is
 not applicable to the Company.
 
 xix) In a previous year, the Company had issued unsecured Zero Coupon
 Convertible Bonds and Rs 4,610,975,000/- is outstanding as at 31s1
 March 2009. Being unsecured, the question of creation of security or
 charge in respect thereof does not arise.
 
 xx) We have verified the end use of monies raised by public issue of
 Global Deposit Receipts and Zero Coupon Convertible Bonds as disclosed
 in notes.7 and 16 (d) of Scheduie 1541 respectively.
 
 xxi) To the best of our knowledge and belief and according to the
 information and explanations given to us, no material fraud on or by
 the Company was noticed or reported during the year.
 
                                   For Deloitte Haskins & Sells,
                                          Chartered Accountants
                                                    R. D. Kamat
                                                        Partner 
 Mumbai,
 dated; 30th June, 2009.                   Membership No. 36822