We have audited the attached Balance Sheet of IFCI Limited (Company)
 as at March 31, 2011, the Profit and Loss Account and the Cash Flow
 Statement 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.
 
 We have 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 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 and the
 Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the
 Central Government of India 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 above, we report as
 under:
 
 (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, 1956;
 
 (v) As per information and explanation given to us, the Central
 Government has, till date, not prescribed any cess payable under
 Section 441A of the Companies Act, 1956;
 
 (vi) On the basis of written representations received from the
 Directors, as on March 31, 2011 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, 2011 from being appointed as Director
 under Section 274(1) (g) of the Companies Act, 1956;
 
 (vii) 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 state of affairs of the
 Company as at March 31, 2011;
 
 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 REFERRED TO IN PARA 1 OF OUR REPORT OF
 EVEN DATE
 
 (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. According
 to the information and explanation given to us, no material
 discrepancies were 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 land and
 buildings during the year. This has not affected the going concern.
 
 (ii) The nature of the Company''s business/activities/transactions 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, 1956,
 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 the sale of goods
 and services. Further, during the course of our audit, we have neither
 come across nor have we been informed of any continuing failure to
 correct any major weakness in such 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, not accepted any public deposits and
 hence, 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 are not
 applicable. 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 internal audit function carried out during
 the year by a firm of Chartered Accountants appointed by the Management
 have been commensurate with its size of the Company 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 accounts, the Company
 has been generally 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.  There are no arrears of outstanding statutory dues as at
 March 31, 2011 for a period of more than 6 months from the date they
 became payable.
 
 (b) As at March 31, 2011, 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          Nature of      Amount    Period to which    Forum where
 of the        the Dues                 Amount             dispute
 Statute                                relates            pending
 
 M P           Sales       Rs. 60,000/-         –            Board of
 Commercial    Tax on                                      Revenue
 Tax Act,      Lease                                       (Commercial
 1994          Transactions                                transactions
                                                           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, in our opinion,
 the Company has not defaulted in repayment of dues to any financial
 institution or banks or debenture holders.
 
 (xii) According to the information and explanations given to us and on
 the basis of our examination of the books of account, the Company has
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities. In our opinion, 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, the Company
 has maintained proper records 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 by the Company, in its own name except to the extent of the
 exemption, if any, granted under Section 49 of the Companies Act, 1956.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for loans taken by others from banks or financial
 institutions are not prima-facie prejudicial to the interests of the
 Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, term loans availed by the Company were prima-facie applied
 by the Company during the year for the purpose for which they were
 obtained.
 
 (xvii) According to the information and explanations given to us and
 based on the 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.
 
 (xviii) T h e C o m pany 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)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
 has been noticed or reported during the year.
 
                                                 For CHOKSHI & CHOKSHI
                                                 Chartered Accountants
 
                                          Firm Registration No.101872W
 
                                                        Kanu S Chokshi
 Camp: New Delhi                                               Partner
 
 Date   : April 18, 2011                           Membership No.17085