1.  We have audited the attached Balance Sheet of Manappuram Finance
 Limited (''the Company'') as at March 31, 2012 and also the Statement of
 profit and loss and the cash flow statement for the year ended on that
 date 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.
 
 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 materia 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 financia statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) 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.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 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;
 
 i. In our opinion, proper books of account as required by aw have been
 kept by the Company so far as appears from our examination of those
 books;
 
 iii.  The balance sheet, statement of profit and loss and cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 v.  In our opinion, the balance sheet, statement of profit and oss 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;
 
 v.  On the basis of the written representations received from the
 directors, as on March 31, 2012, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2012 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 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 affairs of the
 Company as at March 31, 2012;
 
 b) in the case of the statement of profit and loss, of the profit for
 the year ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 Manappuram Finance Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) There was no disposal of a substantial part of fixed assets during
 the year.
 
 (ii) The Company is a non banking finance company engaged in the
 business of providing loans and does not maintain any inventory.
 Therefore, the provisions of clause 4(ii) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) are not applicable to the Company.
 
 (iii) (a) As informed, 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 (''the
 Act''). Therefore, the provisions of clause 4(iii) (a) of the Companies
 (Auditor''s Report) Order, 2003 (as amended) is not applicable to the
 Company.
 
 (b) The provisions of clause 4(iii) (b) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) is not applicable to the Company.
 
 (c) The provisions of clause 4(iii) (c) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) is not applicable to the Company.
 
 (d) The provisions of clause 4(iii) (d) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) is not applicable to the Company.
 
 (e) The Company had taken loan from a Company covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs. 1.64 million and the year-end
 balance of loan taken from such party was Rs. Nil.
 
 (f) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (g) In respect of loans taken, repayment of the principal amount was as
 stipulated and payment of interest was regular.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of fixed assets and sale of services. The activities of the
 Company during the year did not involve any purchase and sale of goods.
 During the course of our audit, we have not observed any major weakness
 or continuing failure to correct any major weakness in the internal
 control system of the Company in respect of these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In respect of transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs entered into during
 the financial year, because of the unique and specialized nature of the
 items involved and absence of any comparable prices, we are unable to
 comment whether the transactions were made at prevailing market prices
 at the relevant time.
 
 (vi) Based on information and explanations provided to us, we report
 that the Company has not accepted any deposits from the public.
 
 (vii) The Company has an internal audit system commensurate with the
 size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, 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 for
 the products of the Company.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 employees'' state insurance, customs duty, investor education and
 protection fund, income-tax, sales-tax, service tax, cess and other
 material statutory dues applicable to it. Dues in respect of wealth-tax
 and excise duty are not applicable to the Company.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees''
 state insurance, customs duty, investor education and protection fund,
 income- tax, service tax, sales-tax and other material undisputed
 statutory dues were outstanding, at the year end, for a period of more
 than six months from the date they became payable.
 
 (c) According to the records of the Company, there are no dues
 outstanding of income tax and sales-tax on account of any dispute.  The
 dues outstanding of service tax on account of a dispute are as follows:
 
                                                (Amount is millions)
 
 Name of the 
 Statute       Nature of dues  Period of
                                dispute    Amount      Forum where
                                                       it is pending
 
 Finance 
 Act, 1944     Service tax     2001-2008    5.00    
                                          (including 
                                           penalty
                                                      Commissioner of
                                                       Service tax
                                            of 2.5)    (Appeals)
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to banks, financia
 nstitutions or debenture holders.
 
 (xii) Based on our examination of documents and records, we are of the
 opinion that the Company has maintained adequate records where the
 Company has granted loans and advances on the basis of security by way
 of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
 are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) Based on the information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) 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
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (xix) According to the information and explanations given to us, during
 the period covered by our audit report, the Company has created
 security or charge in respect of debentures issued other than on
 debentures aggregating Rs 870 million which had been issued recently.
 Subsequent to year end, the Company has created security or charge in
 respect of these debentures.
 
 (xx) We have verified that the end use of money raised by public issue
 of non-convertible redeemable debentures is as disclosed in the notes
 to the financial statements.
 
 (xxi) As more fully discussed in Note 38 to the financia statements and
 as informed by the management, we report that, during the year there
 have been certain nstances of fraud on the Company by employees where
 gold loan related misappropriations / cash embezzlements have occurred
 for amounts aggregating Rs. 38.32 million. The Company has fully provided
 for these amounts in the financial statements and is in the process of
 recovering these amounts from the employees and taking legal actions.
 
                                     For S.R. BATLIBOI & ASSOCIATES
 
                                              Chartered Accountants 
                                  Firm registration number: 101049W
 
                                            per S. Balasubrahmanyam
 Place: Kochi                                               Partner
 
 Date: May 18, 2012                          Membership No.: 053315