We have audited the attached Balance Sheet of India infoline limited as
 at march 31, 2011, and Profit and loss account and also 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 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 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.
 
 in accordance with the provisions of Section 227 of the companies act,
 1956, we report that:
 
 1.  as required by the companies (auditors Report) Order, 2003, issued
 by the central Government of India under sub-section (4a) of section
 227 of the companies act, 1956, and on the basis of such checks of the
 books and records of the company as we considered appropriate and
 according to the information and explanation given to us, we enclose in
 the Annexure a statement on the matter specified in paragraphs 4 and 5
 of the said Order.
 
 2.  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 purpose of our
 audit;
 
 ii) in our opinion, proper books of account as required by law have
 been kept by the company so far as appear from our examination of the
 books;
 
 iii) the balance sheet, profit and loss account and also cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 iv) in our opinion, the balance sheet, profit and loss account and also
 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 by the company from
 its Director as on march 31, 2011 and taken on record by the Board of
 Director, we report that none of the Director is disqualified as on
 march 31, 2011 from being appointed as a Director in terms of the
 clause (g) of sub-section (1) of section 274 of the companies act,
 1956; 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 appearing 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 affair of the
 company as at march 31, 2011;
 
 b.  in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 c.  in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 
 Annexure
 
 referred to in paragraph 1 of our report dated may 7, 2011, to the
 member of India infoline limited.
 
 1.  (a) the company has maintained adequate records to show full
 Particular, including quantitative details and situation of the fixed
 assets.
 
 (b) The company has formulated a programme of physical verification of
 its fixed assets in a phased manner. in accordance with this program, a
 physical verification of certain fixed assets has been carried out by
 management during the year and there are no material discrepancies
 observed between assets physically verified and book balances. in our
 opinion, the periodicity of verification is reasonable having regard to
 the size of the company and the nature of its assets.
 
 (c) The company has not disposed off any substantial part of its fixed
 assets so as to affect its going concern status.
 
 2. The company is not carrying on any manufacturing or trading
 activity. therefore, the provisions of sub clause (a), (b), and (c), of
 clause (ii) of paragraph 4 of the Order are not applicable to the
 company.
 
 3.  (a) The company has granted loan to One company and loan to One
 Party covered in the register maintained under Section 301 of the
 companies act, 1956. the maximum amounts involved during the year were
 Rs 851,213,864/- and the year-end balance of loans granted to such
 company/Party was Rs 631,228,837/-.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loan given is not, prima facie, prejudicial to the interest of
 the company.
 
 (c) There are no stipulations as to repayment of principal and interest
 amounts.
 
 (d) There is no overdue amount in excess of Rs 100,000 in respect of
 loan granted to company listed in the register maintained under Section
 301 of the companies act, 1956 since repayment schedule is not
 stipulated.
 
 (e) The company has not taken any loans from the companies, firms or
 other parties covered in the register maintained under Section 301 of
 the companies act, 1956. accordingly, the provisions of sub-clause (e),
 (f) and (g) of clause (iii) of paragraph 4 of the Order are not
 applicable to the company.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and nature of its business, for the
 purchase of fixed assets and sale of services. Further, on the basis of
 our examination of the books and records of the company, and according
 to the information and explanations given to us, we have neither come
 across nor have we been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control systems.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the Particular of contracts or arrangements
 that need to be entered into a Register in pursuance of Section 301 of
 the companies act, 1956 and those brought to our notice, have been so
 entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions in pursuance of such contracts or
 arrangements entered in the register maintained under section 301 of
 the companies act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the year, have been made at prices which
 are not comparable since the prevailing market prices of such services,
 in view of the management, are not readily available.
 
 6.  The company has not accepted any deposits from the public of the
 nature, which attracts the provisions of Section 58a, 58aa or any other
 relevant provision of the companies act, 1956 and the rules made there
 under. therefore, the provision of clause (vi) of paragraph 4 of the
 Order is not applicable to the company.
 
 7.  In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  As per the information and explanations given to us, in respect of
 the class of industry the company falls under, the maintenance of cost
 records has not been prescribed by the central Government under section
 209 (1) (d) of the companies act, 1956. therefore, the provision of
 clause (viii) of paragraph 4 of the Order is not applicable to the
 company.
 
 9.  (a) According to the information and explanations given to us and
 the records of the company examined by us, in our opinion, the company
 is generally regular in depositing undisputed statutory dues including
 Provident Fund, investor education and Protection Fund, employees
 State insurance, income tax, Sales tax, Wealth tax, Service tax,
 customs duty, excise duty, cess and other material statutory dues as
 and wherever applicable to the company, with the appropriate
 authorities. Based on the information furnished to us, there are no
 undisputed statutory dues as on march 31, 2011, which are outstanding
 for a period exceeding six months from the date they became payable.
 
 (b) According to the information and explanations given to us and
 records of the company examined by us, the Particular of sales
 tax/excise duty/service tax/income tax/custom duty/ wealth tax/cess as
 at march 31, 2011 which have not been deposited on account of a dispute
 pending, and amount involved and the forum where dispute is pending as
 under;
 
 Name of the Statute      Nature of the disputed dues   Amount of tax
           
                                                           (Rs)
 MVAT act,2002         Delay in filing Vat Audit Report     563,342/-
 
                        for the period 2007- 2008
 
 Income tax act,1961   Penalty proceeding u/s 271 (1) (c)   106,680/-
 
 Income tax act, 1961  Disallowance of Depreciation,      7,025,888/-
 
                       Disallowance of expenses u/s 14a
 
                       and disallowance of expenses 
 
 Profession tax        Profession tax, Penalty and        1,553,529/-
 
                       interest
 
 
 
                       Period to which the      Forum where dispute 
 
                       amount relates             is pending
 
 MVAT Act,2002           F.Y. 2007-2008        Jt.comm. of Sales tax
 
 Income Tax Act,1961     A.Y. 2004-2005        CIT appeals of 
 
                                               Income tax 
 
 Income Tax              A.Y. 2007-2008        commissioner of
 
                                               Income tax appeal
 
 profession Tax          A.Y.2007-2008         Dy.comm. of Sales
 
                                               Tax- appeals
 
 10.  At the end of the financial year, the company has neither
 accumulated losses nor has incurred any cash loss during the financial
 year and in the immediately preceding financial year.
 
 11.  Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the company has
 not defaulted in repayment of its dues to its financial institution,
 bank and debenture holder.
 
 12.  According to the information and explanations given to us, since
 the company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities,
 in our opinion, the company need not maintain relevant documents and
 record.
 
 13.  The company is not a chit fund or a nidhi / mutual benefit fun /
 society. therefore, the provisions of sub clause (a), (b), (c) and (d)
 of clause (xiii) of paragraph 4 of the Order are not applicable to the
 company.
 
 14.  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 dealing or trading in shares,
 securities, debentures and other investments, as applicable, and timely
 entries have been made therein. the aforesaid shares, securities,
 debentures and other investments have been held by the company in its
 own name, except to the extent of the exemption granted under Section
 49 of the companies act, 1956.
 
 15.  The company has granted corporate Guarantees to Banks/ Financial
 institutions in respect of loans availed by its subsidiary companies.
 Based on the information and explanations given to us, we are of the
 opinion that the terms and conditions on which the guarantees are given
 are prima facie, not prejudicial to the interest of the company.
 
 16.  In our opinion, and according to the information and explanation
 given to us, the term loans have been applied for the purpose for which
 they were raised.
 
 17.  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
 investments.
 
 18.  According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the Register maintained under section 301 of the
 companies act, 1956.
 
 19.  The company has issued unsecured debentures during the year.
 Since, these debentures are unsecured the company is not required to
 and has not created a charge in respect of these debentures.
 
 20.  The company has not raised any money through a public issue during
 the year. therefore, the provision of clause (xx) of paragraph 4 of the
 Order is not applicable to the company.
 
 21.  During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanation given to us, we have neither come across any instance of
 material fraud on or by the company, noticed or reported during the
 year nor have we been informed of such case by management.
      
                                           Sharp & Tannan Associates
 
                                               Chartered Accountants
 
                                        ICAI Registration no.109983W
 
 
                                                       By the hand of
 
                                                       Tirtharaj Khot 
 
 Place: Mumbai                                                Partner
 
 Date: may 7, 2011 
 
 Membership no.: 37457