We have audited the attached Balance Sheet of Shriram City Union
 Finance Limited as at 31st March, 2011 and the related Profit and Loss
 Account and Cash Flow Statement for the year ended on that date annexed
 thereto which we have signed under reference to this report. The
 financial statements relating to the Corporate Region have been audited
 by us and Other Regions audited by Branch Auditors whose reports were
 forwarded to and considered by us.  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 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
 providesareasonablebasisforouropinion.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Government Of India in terms of section 227(4A) of the Companies
 Act, 1956 and on the basis of such checks as we considered appropriate
 and according to the information and explanations given to us during
 the course of audit, a statement on matters specified in the said order
 has been given in the Annexure hereof.
 
 2. Further toour comments in the annexure referred to in paragraph 1
 above, we reportthat:
 
 a) 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.
 
 b) 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.
 
 c) The Balance Sheet, Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 accou nt.
 
 d) In our opinion and according to the information and explanations
 given to us, the Balance Sheet .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.
 
 e) On the basis of the written representations received from the
 directors and taken on record by the company, none of the directors are
 disqualified as on 31st, March 2011 from being appointed as a director
 in terms of clause (g) of subsection (1) of section 274 of the
 Companies Act, 1956.
 
 f) 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,
 
 (i) inthecaseof balance sheet, of the state of affairs of the company
 as at 31 st March 2011;
 
 (ii) inthecaseof profit and loss account, of the profit for the year
 ended on that date; and
 
 (iii) in the case of cash flow statement, of the cash flows
 fortheyearended on that date.
 
 Annexure to Auditors'' Report
 (Referred to in Paragraph 1 of the Auditors- Report of even date)
 
 Re: Shriram City Union 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 bythe 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. As informed, no material discrepancies
 were noticed on such verification.
 
 c. There was no substantial disposal of fixed assets during theyear.
 
 II.  The Company is primarily engaged in financing activities which
 does not involve maintenance of any inventory.
 
 III. As informed, the Company has not granted or taken any loans,
 secured or unsecured to companies, firms or other parties covered in
 the register maintainedundersection301oftheAct.
 
 IV.  In our opinion and according to the information and explanation
 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. During the course of our audit, no major
 weakness has been noticed in the internal control system in respect of
 these areas.  There is no sale of services.
 
 V.  According to the information and explanation provided by the
 management, we are of the opinion that there are no transactions with
 reference to contracts or arrangements referred to in section 301 of
 the Act that need to be entered into the register maintained under
 section 301.
 
 VI. In respect of deposits accepted, in our opinion and according to
 the information and explanations given to us, directives issued bythe
 Reserve Bankof India and the provisions of sections 58A, 58AA or any
 other relevant provisions of the Act and the rules framed there under,
 to the extent applicable, have been complied with. We are informed by
 the management that no order has been passed by the Company Law Board,
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any otherTribunal.
 
 VII.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 VIII.  As per the information and explanations given to us, the Central
 Government has not prescribed maintenance of cost records under section
 209(1) (d) of the Act.
 
 IX. A) On the basis of our examination of theCompany''s books and
 records and on the basis of information and explanations given to us
 the Company is generally regular in depositing undisputed statutory
 dues including provident fund, investor education and protection fund,
 employees'' state insurance, income tax, wealth tax, sales tax, customs
 duty, excise duty, cess and any other statutory dues with appropriate
 authorities.
 
 B.) On the basis of information and explanations given to us and the
 relevant documents produced before us, the following dues have not been
 deposited on account of dispute
 
                                Amount   Years to which
                                         the            Forum where
                                                        dispute
 Name of the 
 statute        Nature of dues  (Rs in 
                                 lacs)   amount relates  is pending
 
 Wealth Tax 
 Act, 1957      Wealth tax 
                demands          0.75    A.Y.2001-02     CIT(Appeals)
 
 Wealth Tax 
 Act, 1957      Wealth tax 
                demands          0.57    A.Y.2002-03     CIT(Appeals)
 
 Wealth Tax 
 Act, 1957      Wealth tax
                demands          0.43    A.Y.2003-04     CIT(Appeals)
 
 Finance Act, 
 1994           Service tax on 
                hire purchase  1553.08   2001-02 to
                                         2007-08         Before Madras
 (Service Tax)  and lease 
                transactions                             High Court
 
 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, it appears that Company has not
 defaulted in repayment of dues to a financial institution,
 bankordebenture 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 othersecurities.
 
 XIII.  In our opinion, the Company is not a chit fund or a nidhi/
 mutual benefit fund /society.
 
 XIV.  In our opinion, the Company is not dealing or trading in shares,
 securities, debentures and other investments.
 
 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.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 availed by the Company were, prima facie, applied by the Company during
 the year for the purposes for which the loans were obtained other than
 funds temporarily invested pending utilization of the funds forthe
 intended use.
 
 XVII. According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company and
 considering the nature of the business and activity being carried on,
 we report that no funds raised on short- term basis have been used for
 long-term investment.
 
 XVIM.The Company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Act.
 
 XIX.  According to the information and explanations given to us, the
 Company has created security or charge in respect of debentures issued.
 
 XX.  The Company has not raised any money by public issue during the
 year.
 
 XXI.  Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no material fraud on or by the Company has been noticed or
 reported during the course of our audit.
 
                                               For Pijush Gupta & Co.
 
                                       Firm Registration No: 309015E
 
                                               Chartered Accountants
 
                                                   Ramendra Nath Das
 
 Place: Chennai                                              Partner
 
 Date: 26,hMay, 2011                           Membership No. 014125