IFCI

We have audited the attached Balance Sheet of IFCI Ltd as at March 31,
 2009 and also the Profit and Loss Account and the Cash Flow Statement
 for the year ended on that date annexed thereto. These financial
 statements are the responsibility of the Companys management. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 We 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.
 
 As required by the Companies (Auditors Report) Order, 2003 and the
 Companies (Auditors Report) (Amendment) Order, 2004 issued by the
 Central Government of India in terms of Sub-Section (4A) of Section 227
 of the Companies Act, 3956, 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 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 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, 1950.
 
 (v) On the basis of written representations recieved from the
 Directors, as on March 31, 2009 and taken on record by the Board of
 Directors, we report that none of the Directors of the Company is
 disqualified as on March 31, 2009 from being appointed as Director
 under Section 274(1) (g) 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 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 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 stale of affairs of the
 Company as at March 31,2009;
 
 ii) in the case of the Profit and Loss Account, 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 THE AUDITORS REPORT TO THE MEMBERS OF IFCI LTD
 
 (i) (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situations of fixed
 assets.
 
 (b) The fixed assets are being physically verified by the management at
 all its offices in a phased manner at reasonable intervals. Material
 discrepancies were not noticed on such verification.
 
 (c) The Company did not dispose off a substantial part of fixed assets
 during the year. However, the Company did dispose off certain and and
 buildings during the year. This has not affected the going concern.
 
 (ii) The nature of the Company does not require it to hold inventories
 and as such Clause
 
 4(ii) of the Companies (Auditors Report) Order, 2003 (Order) is not
 applicable.  (iii) (a) The Company has not granted any loans, secured
 or unsecured to companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956. As
 the Company has not granted any loans, secured or unsecured, to parties
 listed in the registers maintained under Section 301 of the Companies
 Act. 1950, paragraphs (iii) (a), (b), (c) & (d) of the Order are not
 applicable.  (b) The Company has not taken any loans, secured or
 unsecured from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956. As
 the Company has not taken any loans, secured or unsecured, from parties
 listed in the registers maintained under Section 301 of the Companies
 Act, 1956, paragraphs (iii) (e), (f) and (g) of the Order are not
 applicable.  (iv) 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 for sale of
 services. Further, during the course of our audit we have neither come
 across nor have we been informed of any continuing failure to correct
 major weakness in the internal controls.  (v) (a) In our opinion, and
 according to the information and explanations given to us, there are no
 transactions that need to be entered into a register maintained under
 Section 301 of the Companies Act, 1956.  (b) In our opinion, and
 according to the information and explanations given to us, as there are
 no transactions that need to be entered into a register maintained
 under Section 301 of the Companies Act, 1956 paragraph (v) (b) of the
 Order is not applicable.  (vi) In our opinion, and according to the
 information and explanations given to us, the Company has, in respect
 of public deposits, complied with the directives issued by the Reserve
 Bank of India and the provisions of Sections 58A and 58AA or any other
 relevant provisions of the Companies Act, 1956 and the rules framed
 there under. As per the information and explanations given to us no
 order has been passed by Company Law Board or National Company Law
 Tribunal or Reserve Bank of India or any Court or any other Tribunal in
 this respect.  (vii) In our opinion, the Company does have an internal
 audit system commensurate with its size and 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 Companies Act,
 1956.  (ix) (a) According to the information and explanations given to
 us and on the basis of our examination of the books of account, the
 Company has been regular in depositing undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and
 other material statutory dues as applicable with the appropriate
 authorities.  (b) As at March 31, 2009 according to the records of the
 Company and the information and explanations given to us, the following
 are the particulars of dues on account of Income tax/Sales tax/Wealth
 tax/Service tax/Custom duty/Excise duty/Cess that have not been
 deposited on account of disputes:
 
 Name of the       Nature of the             Amount
 Statute                    Dues         (Rs. in crore)
 
 Income Tax Act,    Income Tax                206.17
 1961
 
 M P Commercial     Sales Tax on                0.006
 Tax Act                   lease
                    transactions
 
 Period to which        Forum where
 the Amount                 dispute
 relates                    pending
 
 AY 1995-90. 1990-97     Appeliate
 &1998-99                Authority -
                         Tribunal Level
 
                         Board of Revenue
                        {Commercial
                         Tax tribunal)
                         M.P. Gwalior
 
 However, according to the information and explanations given to us, the
 demand against Income Tax is fully covered by way of Advance Tax.
 deposited with Income Tax Authorities.
 
 (x) The Company did not have any accumulated losses as at the end of
 the financial year and in the immediately preceding financial year.
 
 (xi) According to the information and explanations given to us and on
 the basis of our examination of the books of account, the Company has
 not defaulted in repayment of dues to any financial institution or bank
 or debenture holders. except the differential interest in respect of
 certain bonds which are in the process of restructuring.
 
 (xii) According to the information and explanations given to us and on
 the basis of our examination of the books of accounts, the Company has
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.  The Company has maintained
 adequate documents and records in this respect.
 
 (xiii) The Company is not a chit fund, nidhi, mutual benefit or a
 society. Accordingly, Clause 4
 
 (xiii) of the Order is not applicable.
 
 (xiv) (a) According to the information and explanations given to us and
 on the basis of our examination of the books of account, proper records
 have been maintained of the transactions and contracts and timely
 entries have been made therein in respect of the shares, securities,
 debentures and other investments dealt with or traded by the Company.
 
 (b) The shares, securities, debentures and other securities have been
 held bv the Company, in its own name except to the extent of the
 exemption, if any. granted under Section 49 of the Act.
 
 (xv) In our opinion and according to information and explanations given
 to us. the terms and conditions on which the Company has given
 guarantees for loans taken by others from bank or financial
 institutions are not prejudicial to the interests of the Company.
 
 (xvi) In our opinion and according to information and explanations
 given to us, term loans have been applied for the purpose for which,
 they were obtained.
 
 (xvii) According to information and explanations given and based on the
 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)Tbe 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, during the year.
 
 (xix) As all debentures and bonds issued are unsecured, creation of
 security or charge does not arise.
 
 (xx) The Company has not raised any money by public issues during the
 year,
 
 (xxi) According to information and explanations given to us and band
 has been noticed or reported during the year.
 
                                                    For Ray & Ray
                                           Chartered  Accountants
 
                                                     Anil P Verma
 Place: New Delhi                                         Partner
 Date-June 27, 2009                          Membership No. 90408