Auditor Report of Indbank Merchant Banking Services Ltd.

Mar 31, 2025

1.1 We have audited the Standalone financial statements of Indbank Merchant Banking Services Limited (“the Company”),
which comprise the balance sheet as at 31st March 2025, and the statement of Profit and Loss, statement of changes in
equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information (“the financial statements”).

1.2 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial
statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and
give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the
Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, the Profit and total
comprehensive income, changes in equity and its cash flows for the year ended on that date.

2 Basis for Opinion

2.1 We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that
are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code
of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

3 Emphasis of Matter

We draw attention to Note 36 of the financial statements, which describes the pending litigation related to disputed
income tax demands amounting to Rs. 1842.78 Lakhs, regarding the company claiming an exemption under section
10(38) (Exemption on Long-Term Capital Gains from Sale of Equity Shares on which the Securities Transaction Tax
paid), however the income has been treated as Business income by the Assessing officer for the assessment years 2007¬
08 to 2009-10 for which a appeal has been filled with Hon’ble High Court of Madras. Provision has not been made in the
accounts as the management believes, based on legal advice, that liability may not arise. Our opinion is not modified in
respect of this matter.

4. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters	How our audit addressed the key audit matter
Contingent Liability The contingent liability as defined in Ind AS 37 - provisions, contingent liability and contingent assets requires assessment of probable outcomes and cash flows. The identification and quantification of contingent liabilities require estimation and judgment by management. (Refer Note 36)	We have carried out the validation of information provided by the management by performing the following procedures • Evaluating the reasonableness of the underlying assumptions • Understanding the current status of the litigations/tax assessments.

	• Examination of recent orders and /or communication received from various tax authorities/judicial forums and follow up action thereon. • Examining the relevant documents on record
	• Relying on the confirmation of status by the consultants wherever applicable
	• Obtaining management representation wherever necessary

5. Information Other than the Financial Statements and Auditor’s Report Thereon

5.1 The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises
the information included in Board’s Report, but does not include the financial statements and our auditor’s report there on. The
Board’s report is expected to be made available to us after the date of this auditor’s report.

5.2 Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

5.3 In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge
obtained in the audit or otherwise appears to be materially misstated.

5.4 When we read the Board’s report, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.

6. Responsibilities of Management and Those Charged with Governance for the Financial Statements

6.1 The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013
(“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. This
responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent;
and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

6.2 In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

6.3 Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

7. Auditor’s Responsibilities for the Audit of the Financial Statements

7.1 Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

7.2 As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We are also:

a. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible
for expressing our opinion on whether the company has adequate internal financial controls system in place
and the operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.

d. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

7.3 We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.

7.4 We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.

8. Report on Other Legal and Regulatory Requirements

8.1 As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A”, a statement on the matters specified
in paragraphs 3 and 4 of the Order, to the extent applicable.

8.2 As required by Comptroller and Auditor General of India through directions/sub-directions issued under Section 143(5)
of the Companies Act 2013, on the basis of written representation received from the management, we give our report
on the matter specified in the “Annexure-B” attached.

8.3 As required by Section 143 (3) of the Act, we report that:

a) We have sought and 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 it appears
from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under
section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) Disqualification of directors stated under Section 164(2) of the Act is not applicable to a Government Company as
per notification no. GSR 463(E) of the Ministry of Corporate Affairs dated June 05 2015;

f) Being a Government Company, the provisions of section 197 are not applicable to the Company as per the
notification of MCA in G.S.R. 463(E) dated 5th June 2015 and therefore the reporting requirement under section
197(16) does not arise;

g) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the
operating effectiveness of such controls, refer to our separate report in “Annexure C”; and

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to
the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31,2025 on its financial position in
its standalone financial statements - Refer note 36 to the standalone financial statements;

ii. The Company did not have any long-term contracts, including derivative contracts for which there were any
material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company;

iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the note

43 to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in any other person(s)
or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 43
to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including
foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise,
that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause
(i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. No dividend is declared or paid during the year by the Company.

vi. Based on our examination which included test checks, the company has used an accounting software for
maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has

operated throughout the year for all relevant transactions recorded in the software. Further, during the course
of our audit we did not come across any instance of audit trail feature being tampered with. The audit trail has
been preserved by the company as per the statutory requirements for record retention.

For BRAHMAYYA & CO.,

Chartered Accountants

Firm Registration No: 000511S

Place: Chennai K Jitendra Kumar

Date: April 24, 2025 Partner

Membership No: 201825
UDIN No:25201825BMIWOH6451

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Mar 31, 2024

To The Members of Indbank Merchant Banking Services Limited Report on the Standalone Financial Statements

1 Opinion

1.1 We have audited the Standalone financial statements of Indbank Merchant Banking Services Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2024, and the statement of Profit and Loss, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (“the financial statements”).

1.2 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, the Profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

2 Basis for Opinion

2.1 We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3 Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial

statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and

in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

How our audit addressed the key audit matter

Contingent Liability The contingent liability as defined in Ind AS 37 - provisions, contingent liability and contingent assets requires assessment of probable outcomes and cash flows. The identification and quantification of contingent liabilities require estimation and judgment by management. (Refer Note 36)

We have carried out the validation of information provided by the management by performing the following procedures • Evaluating reasonableness of the underlying assumptions • Understanding the current status of the litigations/tax assessments. • Examination of recent orders and /or communication received from various tax authorities/judicial forums and follow up action thereon. • Examining the relevant documents on record • Relying on the confirmation of status by the consultants wherever applicable • Obtaining management representation wherever necessary

4 Information Other than the Financial Statements and Auditor’s Report Thereon

4.1 The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Board’s Report, but does not include the financial statements and our auditor’s report there on. The Board’s report is expected to be made available to us after the date of this auditor’s report.

4.2 Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

4.3 In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

4.4 When we read the Board’s report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

5 Responsibilities of Management and Those Charged with Governance for the Financial Statements

5.1 The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

5.2 In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

5.3 Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

6 Auditor’s Responsibilities for the Audit of the Financial Statements

6.1 Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

6.2 As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

d. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6.3 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

6.4 We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

7 Report on Other Legal and Regulatory Requirements

7.1 As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

7.2 As required by Comptroller and Auditor General of India through directions/sub-directions issued under Section 143(5) of the Companies Act 2013, on the basis of written representation received from the management, we give our report on the matter specified in the “Annexure-B” attached.

7.3 As required by Section 143 (3) of the Act, we report that:

a) We have sought and 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 it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) Disqualification of directors stated under Section 164(2) of the Act is not applicable to a Government Company as per notification no. GSR 463(E) of the Ministry of Corporate Affairs dated 05/06/2015;

f) Being a Government Company, the provisions of section 197 are not applicable to the Company as per the notification of MCA in G.S.R. 463(E) dated 5th June 2015 and therefore the reporting requirement under section 197(16) does not arise;

g) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure C”;

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31,2024 on its financial position in its standalone financial statements - Refer note 36 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the note 43 to the

accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 43 to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities

(“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. No dividend is declared or paid during the year by the Company.

vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

For BRAHMAYYA & CO.,

Chartered Accountants Firm Registration No: 000511S

Place: Chennai K Jitendra Kumar

Date: April 22, 2024 Partner

Membership No: 201825 UDIN No: 24201825BKAJNQ8109

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Mar 31, 2018

INDEPENDENT AUDITOR''S REPORT To The Members of INDBANK MERCHANT BANKING SERVICES LIMITED Report on the Standalone IndAS Financial Statements

We have audited the accompanying standalone financial statements of INDBANK MERCHANT BANKING SERVICES LIMITED(“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and 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 it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

1. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in ''''Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

3. As required by section 143(5) we have included in Annexure C, a statement on the matters specified in the directions issued by the Comptroller and Auditor General of India, and in our opinion, no action is required to be taken thereon and there is no impact on the accounts and the financials statements of the company.

We have audited the internal financial controls over financial reporting of INDBANK MERCHANT BANKING SERVICES LIMITED("the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report to the Members of Ind bank Merchant Banking Services Limited of even date)

i. In respect of the Company''s fixed assets:

a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

ii. The Company is in the business of providing broking Depository Participant services and Merchant banking services. Accordingly, reporting under clause 3 (ii) of the order is not applicable to the Company. Also, the Company into the proprietary investment in the shares. These shares are part of the inventory and disclosed in the financials accordingly.

iii. According to the information and explanations given to us, the Company has not granted any secured or unsecured loans to any company, firms or any other party covered in the register maintained u/s 189 of the companies act.

iv. According to the information and explanations given to us, the Company has not directly or indirectly advanced loan to the persons covered under section 185 and 186 of the Act or given guarantees or securities in connection with the loan taken by such persons.

v. The Company has not accepted deposits during the year and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

vi. The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus reporting under clause 3(vi) of the order is not applicable to the Company.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Service Tax, Goods and Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Service Tax, Goods and Service Tax, Cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

c. Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax which have not been deposited as at March 31, 2018 on account of dispute are given below:

Name of the Statue	Nature of the dues	Amount(In Lakhs)	Period to which the amount relates	Forum where dispute is pending	Remarks
Income Tax act, 1961	Income tax and interest	115.02	1992-93	Income Tax Appellate Tribunal
	Income tax and interest	32.13	1998-99	Commissioner of income tax
	Income tax and interest	617.47	2007-08	High court - Madras	The company has paid Rs.18Lakhs as per CIT Order for stay in petition
	Income tax and interest	1129.05	2008-09	High court - Madras	The company has paid Rs. 132akhs as per CIT Order for stay in petition
	Income tax and interest	96.27	2009-10	Income Tax Appellate Tribunal
	Income tax and interest	24.81	2014-15	Assessing Officer
Sales tax and VAT Laws	Sales tax/ Additional Sales tax , Penalty and Interest	14.20	1998-99	Commercial Tax Officer-Tamilnadu
	Sales tax/ Additional Sales tax , Penalty and Interest	12.05	1995-96	Commercial Tax Officer-Tamilnadu
	Sales tax/ Additional Sales tax , Penalty and Interest	10.33	1994-95	Commercial Tax Officer-Tamilnadu
	Sales tax/ Additional Sales tax , Penalty and Interest	6.2	1993-94	Commercial Tax Officer-Tamilnadu

viii. The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures.

ix. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause 3 (ix) of the Order is not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year, except a fraud reported from Thirupur branch, where the legal course of action initiated against the concerned employee. The value involved in the said fraud is estimated for a sum of Rs.27.18Lakhs based on the claim raised by the customer of the respective branch. Full provision of the said amount has been provided in the financials during the year.

xi. In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as may be applicable by the respective accounting standards.

xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For B Thiagarajan& Co,

Chartered Accountants

F. Reg No. : 004371S

K Balamanikandan

Place : Chennai Partner

Date : 04-05-2018 M. No. : 213537

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Mar 31, 2016

TO THE MEMBERS OF

INDBANK MERCHANT BANKING SERVICES LIMITED

Chennai 600 035

Report on the Financial Statements

1. We have audited the accompanying financial statements of M/s. INDBANK MERCHANT BANKING SERVICES LIMITED, which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

4. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act 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, 2016;

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 the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of the section 143 of the Act, we give in the Annexe-1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(5), we have included in Annexe-2, a statement on the matters specified in the Directions issued by The Comptroller and Auditor General Of India, and in our opinion, no action is required to be taken thereon and there is no impact on the accounts and Financial Statements of the Company.

3. As required by section 143(3) of the Act, we report that:

a) We have sought and 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, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the Operating effectiveness of such controls, refer to our separate Report in Annexe-3. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters included in the Auditor''s Report and to our best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. The amounts required to be transferred to the Investor Education and Protection Fund by the Company during the current Financial Year has been transferred on 21/07/2015 amounting to Rs.23,83,374

ANNEXURE 1 REFERRED TO IN OUR REPORT OF EVEN DATE

With reference to the Annexure 1 referred to in paragraph 1 of the Auditors'' Report of even date to the Members of the M/s. Indbank Merchant Banking Services Ltd on the accounts for the year ended 31^st March 2016, we report that:

Sl. No.	Particulars	Auditor''s Remark
(i)	(a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;	The Company is maintaining proper records of books for fixed asset.
	(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;	It has been reported to us that the fixed assets have been physically verified by the management on a random basis during the year. No material discrepancies were noticed on verification.
	(c)Whether title deeds of immovable property are held in name of the company. If not, provide the details thereof.	Title deeds of immovable property of the company are held in name of the company.
(ii)	Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, whether they have properly dealt with in the books of accounts;	Not Applicable.
(iii)	Whether the company has granted any loans, secured or unsecured to companies, firms, limited liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act. If so,	No, the company has not given loans to any other company, firms or other parties covered in the register.
	(a) Whether the terms and conditions of grant of such loans are not prejudicial to the company''s interest;	Not Applicable.
	(b) whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular;	Not Applicable.
	(c) if the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest;	Not Applicable.
(iv)	In respect of loans, investments, guarantees, and security whether provisions of section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide the details thereof.	The company has not granted loans and guarantee to any director or any other personal Investments.
(v)	In case, the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the	No, the company has not accepted any deposits from the public

	provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, where applicable, have been complied with? If not, the nature of such contraventions be stated; If an 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, whether the same has been complied with or not?
(vi)	Whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been so made and maintained.	As informed to us, the Central Government has not prescribed maintenance of cost records by the Region under section 128 of the Companies Act, 2013 in respect of the business of the Region.
(vii)	(a) Whether the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated;	According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Services Tax and Cess to the extent applicable have been regularly deposited, ESI ,Excise Duty, Customs and Cess are not applicable to this company. According to the information and explanation given to us were no outstanding statutory dues as on March 2016 for a period of more than six months from the date they become payable.
	(b) Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute).	Assessment Year	Demand (in lakhs)
		1992-93 1998-99 2007-08 2008-09 2009-10	115.02 32.13 617.47 1129.05 72.23
(viii)	Whether the company has defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders? If yes, the period and the amount of default to be reported (in case of defaults to banks, financial institutions, and Government, lender wise details to be provided).	Based on our audit procedures and on the explanation and information given by the management the company has not availed any loans from any financial institution or bank or debentures.
(ix)	Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported;;	The company has not made any public offer or obtained term loan during the year under review.
(x)	Whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes, the nature and the amount	Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course

	involved is to be indicated;	of our audit.
(xi)	Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same;	The managerial remuneration paid are in accordance with the requisite with the provisions of section 197 read with Schedule V to the Companies Ac
(xii)	Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;.	Not Applicable
(xiii)	Whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;	We have not come across any instances of transactions with related parties
(xiv)	Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of the amount involved and nature of non-compliance;	The company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year under review.
(xv)	Whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act, 2013 have been complied with;	We have not come across any instances where the company has entered into any non-cash transactions with directors or persons connected with him.
(xvi)	Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained.	The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934

ANNEXURE 2 - REFERRED TO IN OUR REPORT OF EVEN DATE STATUTORY AUDITOR''S REPORT

FOR DIRECTIONS ISSUED BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (5) OF COMPANIES ACT, 2013.

RE: INDBANK MERCHANT BANKING SERVICES LIMITED, CHENNAI-35.

We are giving below replies to the following questions and information as required under Section 143 (5) of Companies Act, 2013. Our replies are based on the basis of our examination & explanations given to us during the course of Statutory Audit of M/s INDBANK MERCHANT BANKING SERVICES LIMITED for the financial year 2015-16.

1. Whether the Company has clear title / lease deeds for freehold and leasehold land respectively? If not, please state the area of freehold and leasehold land for which title/ lease deeds are not available.

Since the Company has neither freehold nor leasehold land, it is not applicable.

2. Please report whether there are any cases of waiver/write off of debts/loans/interest etc., if yes, the reasons therefore and the amount involved.

The Company has written off an amount of '' 9827666.24. Details are given in Annex 1.

3. Whether proper records are maintained for inventories lying with third parties and assets received as gift from government or other authorities.

Not Applicable

ANNEX 1

Waiver / Write off of Debts/loans and interest etc. during the year 2015-16

Continuing Operation

Sl. No.	Name of the party	Amount Written-off (Rs.)	Amount Due (Rs.)	Amount Received (Rs.)	Reasons for Write off (as given by the Management)
1	Suryanarayanamurthy	28558.15	28558.15	0.00	(a) Dues pertaining to these Client accounts are very old and prior to the year 2000 which has been fully provided for in the books of accounts. (b) Recovery from these clients were not forth coming in spite of several efforts. (c) No security available against the dues and the clients were not traceable (d) Suit filed against the clients are pending before the Courts which may take a longer time for disposal and the outcome for the same is uncertain. (e) Hence the dues of Rs.9821966.24 were written off as on 31.03.2016 against the provisions held.
2	GeetaMurali	3420.75	3420.75	0.00
3	Kamakhsi CV	6149.50	6149.50	0.00
4	Marlecha Securities	323831 1.59	323831 1.59	0.00
5	Ashok Kumar Jain	4279144.72	4279144.72	0.00
6	Shasa Share Links	419225.13	419225.13	0.00
7	Mr. R.Sivakumar	196277.62	196277.62	0.00
8	Mr.SyedZaheer Ahmed	776218.34	776218.34	0.00
9	Mr. P L George	334954.16	334954.16	0.00
10	Srikanth Pawar	246238.01	246238.01	0.00
11	Anantha Murthy N	62777.08	62777.08	0.00
12	Mr. V Sreekumar	165421.85	165421.85	0.00
13	Mr. J Chandrasekar	7822.10	7822.10	0.00
14	Mr. Badrinarayanan	57447.24	57447.24	0.00
15	Stamp Account	5700.00	5700.00	0.00	This amount pertains to applications for opening of Trading / Demat accounts which are affixed with special adhesive stamps for POA which cost Rs.100/- each which were given to prospective clients of some of the terminals and the same were not returned by the clients for opening of the account. Since these terminals were subsequently closed due to administrative reasons and the terminal in charge of the these terminals have resigned from the company, these clients could not be followed up for opening of the accounts/ recover the application costs, the same was written off from the books.
	Total	9827666.24	9827666.24

ANNEXE-3 TO THE INDEPENDENT AUDITORS'' REPORT Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s. INDBANK MERCHANT BANKING SERVICES LIMITED as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls Over Financial Reporting issued by the Institute of Chartered Accountants of India . These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on The internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For M/s.A V DEVEN & CO.,

Chartered Accountants,

FRN No.:000726S

Place:Chennai-83

Date :05-05-2016 (CA. R. Raghuraman)

Partner

(M.No.201760)

---

Mar 31, 2015

1) We have audited the accompanying financial statements of M/s. INDBANK MERCHANT BANKING SERVICES LIMITED, which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2) The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3) Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4) We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

6) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

7) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act 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 31,2015;

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 the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of the section 143 of the Act, we give in the Annexe-1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2) As required by section 143(5), we have included in Annexe-2, a statement on the matters specified in the Directions issued by The Comptroller and Auditor General Of India, and in our opinion, no action is required to be taken thereon and there is no impact on the accounts and Financial Statements of the Company.

3) As required by section 143(3) of the Act, we report that:

a) We have sought and 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, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) The Company has adequate internal financial controls system in place and the operating effectiveness of such controls is adequate.

g) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :-

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the current Financial Year.

ANNEXURE 1 REFERRED TO IN OUR REPORT OF EVEN DATE

With reference to the Annexure 1 referred to in paragraph 1 of the Auditors' Report of even date to the Members of the M/s. Indbank Merchant Banking Services Ltd on the accounts for the year ended 31st March 2015, we report that:

Sl. No. Particulars

(i) (a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets; (b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

Auditors Remark

Yes, the Company has maintained proper records.

It has been reported to us that the fixed assets have been physically verified by the management on a random basis during the year. No materials discrepancies were noticed on verification.

(ii) (a) Whether physical verification of inventory has been conducted at reasonable intervals by the management;

Not Applicable.

(b) Are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

Not Applicable.

(c) Whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

Not Applicable.

(iii) Whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

No, the company has not given loans to any other company, firms or other parties covered in the register.

(a)Whether receipt of the principal amount and interest are also regular; and

Not Applicable.

(b) If overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

Not Applicable.

(iv) Is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the region and nature of its business with regard to purchase of Fixed assets and payments for expenses and sale of goods. During the course of audit, no major weakness has been noticed in the internal controls.

(v) In case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with- If not, the nature of contraventions should be stated; If an 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, whether the same has been complied with or not-

No, the company has not accepted any deposits from the public

(vi) Where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained;

As informed to us, the Central Government has not prescribed maintenance of cost records by the Region under section 128 of the Companies Act, 2013 in respect of the business of the Region.

(vii) (a) Is the company regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax and Cess to the extent applicable have been regularly deposited, ESI, Excise Duty, Customs and Cess are not applicable to this company. According to the information and explanation given to us were no outstanding statutory dues as on March 2015 for a period of more than six months from the date they become payable.

(b) In case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

According to the information and explanation provided by the management following are the disputed dues in respect of income tax and sales tax that have not been deposited.

Assessment Year Amount (In lakhs)

INCOME TAX

1998-99 32.13

2007- 08 617.47

2008- 09 1129.05

2009- 10 72.23

Sales Tax 42.78

(c) Whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

The company did not declared dividend for the past seven years.

(viii) Whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

The Company had accumulated loss of Rs.268.49 lakhs as at 31.03.2014. During the current year, the company has earned a profit of Rs.191.29 lakhs, after adjusting the accumulated loss.

(ix) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders- If yes, the period and amount of default to be reported;

Based on our audit procedures and on the explanation and information given by the management the company has not availed any loans from any financial institution or bank or debentures.

(x) Whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

The company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) Whether term loans were applied for the purpose for which the loans were obtained;

No term loans have been availed during the financial year by the company.

(xii) Whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/s A V DEVEN & Co., Chartered Accountants, (Firm Reg. No.000726S)

Place: Chennai - 600 083 (CA. R. Raghuraman) Date : 12.05.2015 Partner (M. No.201760)

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Mar 31, 2014

1. We have audited the accompanying financial statements of M/s. INDBANK MERCHANT BANKING SERVICES LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Statement of Cash Flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

OPINION

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide basis for our audit opinion.

6. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, subject to Note No.27 regarding non-consideration of liability towards interest claim of Rs.897.48 lakhs under the right of recompense clause on settled borrowings availed earlier from Indian Bank, the Holding Company. Had the liability been recognized in the Books, the profit of Rs.30.02 lakhs would have become a loss of Rs.867.46 lakhs.

a) in the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of Profit and Loss Account, 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.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that

a) 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;

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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on March 31,2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014 from being appointed as a Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which, the cess is to be paid under Section 441A of the Companies Act, 1956, nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in paragraph 1 of the our Report of even date to the members of M/s.INDBANK MERCHANT BANKING SERVICES LIMITED on the accounts of the company for the year ended March 31, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

b) As explained to us fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

c) Fixed assets sold during the year do not constitute a substantial part of the total fixed assets of the Company.

2. Clause 2 of Paragraph 4 of Companies (Auditor''s Report) Order, 2003, relating to inventory, is not applicable to the Company.

3. 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 granted or taken any loans secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly the provisions of clauses iii (b) to iii (g) of the order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. Based on the audit procedures applied by us and according to the information and explanation provided by the management, there are no transactions that have been made in pursuance of contracts or arrangements referred to in section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public covered under Section 58A and 58AA of the Companies Act, 1956.

7. As per information and explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. The Central Government has not prescribed the maintenance of cost records under clause (d) of Sub-section (1) of Section 209 of the Companies Act, 1956.

9. a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, and Cess to the extent applicable have generally been regularly deposited with the appropriate authorities. The other statutory dues viz. ESI, Excise duty, Customs duty and Cess are not applicable to this Company. According to the information and explanations given to us there were no outstanding statutory dues as on March 31, 2014 for a period of more than six months from the date they become payable.

b) According to the information and explanations given to us, the following are the particulars of disputed dues in respect of income tax and sales that have not been deposited.

Income Tax:

Assessment Year Amount (Rs.Lakhs) Forum Where the Dispute is pending

2007- 08 617.47 High Court, Madars

2008- 09 1129.05 High Court, Madras

Sales Tax - Chennai:

Assessment Year Amount (Rs.Lakhs) Forum Where the Dispute is pending

1993-94 6.20

1994-95 10.33 Appeal filed by the department pending before the sales tax tribunal

1998-99 14.20

Sales Tax - Rajasthan:

Assessment Year Amount (Rs.Lakhs) Forum Where the Dispute is pending

1995-96 1.27

1996-97 9.73 Joint Commissioner of Commercial 1997-98 3.10 Taxes (Appeals)

1998-99 0.49

10. The Company has accumulated losses of Rs.298.51 lakhs as at 31.03.2013 which has been reduced to Rs.268.49 lakhs after adjusting the net profit of Rs.30.02 lakhs for the year and the Company has not incurred cash losses during this financial year 2013-14.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has defaulted in the payment of interest claim of Rs.897.48 lakhs under right of recompense on settled borrowings availed earlier from Indian Bank, the holding company. However, it is reported that company has requested its Parent Company - Indian Bank, for waiver of this amount.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanation given to us, proper records & timely entries have been maintained by the Company for the transactions and contracts relating to trading in Shares, Mutual funds, Debentures & other Investments. The Investments of the company are held in its own name.

15. According to information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at March 31,2014, we report that no funds raised on short term basis have been used for long term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the company has not made any preferential allotment of shares during the year.

19. The Company has not issued debentures during the period under audit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For M/s A V DEVEN & CO., Chartered Accountants FRN No.: 000726S

Place: Chennai-83 (CA R. Raghuraman) Date : 23.04.2014 Partner (M.No. 201760)

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Mar 31, 2011

We have audited the attached Balance Sheet of INDBANK MERCHANT BANKING SERVICES LIMITED as at 31st March 2011 and the Profit and Loss Account for the year ended 31st March 2011 and also the Cash Flow Statement for the year ended 31 st March 2011 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 conducted our audit in accordance with the 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 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.

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by 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.

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 appears from our examination of these books;

III. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

IV. In our opinion, the Balance Sheet and Profit and Loss Account 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 written representations received by the Directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2011 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, subject to Note No.10 regarding non-consideration of liability towards interest claim of Rs.897.48 lakhs under the right of recompense clause on certain settled borrowings by the Holding Company. Had the liability been recognized in the Books, the loss of Rs.992.65 lakhs would have become a loss of Rs.1890.13 lakhs.

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31stMarch 2011;

b) in the case of Profit and Loss Account, of the Loss for the year ended 31 st March 2011; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended 31 st March 2011.

ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph 1 of our Report of even date.

Re: Indbank Merchant Banking Services Ltd.

(i) a. The company has maintained records showing full particulars including situation and quantity of fixed assets.

b. Fixed assets of the Company have been physically verified by the Company during the year.

c. The fixed assets that have been sold during the year do not constitute a substantial part of the total fixed assets of the Company.

(ii) Clause (ii) of Paragraph 4 of Companies (Auditor's Report) Order, 2003, relating to inventory, is not applicable to the Company.

(iii) The Company has not granted or taken any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses (iii)b to (iii)g of Companies (Auditors Report) Order, 2003, are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and rendering of services. During the course of our audit, we have not observed any major weaknesses in internal controls.

(v) In our opinion and according to the information and explanation given to us, there are no transactions that have been made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

(vi) The Company has not accepted any deposits from public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)The Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956.

(ix) a. The Company is regular in depositing with appropriate authorities all applicable undisputed statutory dues viz. Provident Fund, Investor Education and Protection Fund, Income Tax Sales Tax, Service Tax, and Cess. The other statutory dues viz. ESI, Excise duty, Customs duty and Cess are not applicable to this organization. There are no arrears of outstanding undisputed statutory dues as at 31 st March 2011 for a period of more than six months from the date they become payable.

b. According to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues in respect of income tax and sales tax that have not been deposited.

Name of the Statute Assessment Amount Forum where the Year (Rs.Lak dispute is pending hs) Income Tax Act 2000-01 186.55 Assessing Officer

2001-02 441.11 Assessing Officer

2003-04 19.93 Assessing Officer

2004-05 392.87 Assessing Officer

2005-06 239.54 Assessing Officer

2006-07 315.89 Assessing Officer

2007-08 1027.53 Commissioner of Income Tax (Appeals)

2008-09 1154.81 Commissioner of Income Tax (Appeals)

Sales Tax 1993-94 5.05

1994-95 8.63 Joint Commissioner of Commercial Taxes 1995-96 12.05 (Appeals)

1998-99 10.64

(x) The Company has no accumulated losses. The Company has incurred cash losses during this financial year.

(xi) The Company has not defaulted in repayment of dues to its bankers. There are no borrowings from financial institutions. The Company has not issued any debentures.

(xii) Adequate documents and records are maintained by the Company for the loans and advances granted on the basis of security by way of pledge of shares and other securities.

(xii) The provisions of special statute applicable to chit funds / nidhi / mutual benefit funds / society do not apply to the Company.

(xiv) In our opinion and according to the information given to us, proper records have been maintained by the Company for the transactions and contracts relating to trading in shares, securities, debentures and other investments and timely entries have been made therein. The investments of the Company are held in its own name.

(xv) In our opinion and according to the explanations and information given to us the Company has not given guarantees for loans taken by others from banks and financial institutions.

(xvi) The Company has not availed any term loans.

(xvii) No short-term funds have been raised during the year.

(xviii) During the year, the 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.

(xix) No debentures have been issued by the Company during the year.

(xx) During the year, the Company has not raised any money by public issue.

(xxi) 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 & on behalf of Raman Associates Chartered Accountants

G Venkataraman Partner Membership No.10022

Place: Chennai Date: 18.04.2011

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Mar 31, 2010

We have audited the attached Balance Sheet of INDBANK MERCHANT BANKING SERVICES LIMITED as at 31st March 2010 and the Profit and Loss Account for the year ended 31st March 2010 and also the Cash Flow Statement for the year ended 31st March 2010 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 the 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 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.

1. As required by the Companies (Auditors Report) Order, 2003 as amended by 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, 1956, we enclose in the Annexurea statement on the matters 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 appears from our examination of these books;

III. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

In our opinion, the Balance Sheet and Profit and Loss Account 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 written representations received by the Directors, as on 31st March 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 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, subject to Note No. 10 regarding non-consideration of liability towards interest claim of Rs. 1147.48 lakhs under the right of recompense clause on certain settled borrowings by the Holding Company. Had the liability been recognized in the Books, the loss of Rs. 165.28 lakhs would have become a loss of Rs.1312.76 lakhs.

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

b) in the case of Profit and Loss Account, of the Loss for the year ended 31st March 2010; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended 31st March 2010.

ANNEXURE TO THE AUDITORSREPORT

Referred to in paragraph 1 of our Report of even date. Re: Indbank Merchant Banking Services Ltd.

a. The company has maintained records showing full particulars including situation and quantity of fixed assets (other than given on lease). In case of assets given on lease, the asset register contains partywise amounts which is backed by separate asset records.

b. The assets given on lease have been physically verified by the management, excluding assets relating to

liquidation / suit filed cases. In case of certain assets where inspection were not possible, amounts have been fully provided for, which in our opinion is reasonable. Fixed assets other than given on lease of the Company have been physically verified by the Company during the year.

c. The fixed assets that have been sold during the year do not constitute a substantial part of the total fixed assets of the Company.

(ii) Clause (ii) of Paragraph 4 of Companies (Auditors Report) Order,2003, relating to inventory, is not applicable to the Company

(iii) The Company has not granted or taken any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses (iii)b to (iii)g of Companies (Auditors Report) Order, 2003, are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and rendering of services. During the course of our audit, we have not observed any major weaknesses in internal controls.

(v) In our opinion and according to the information and explanation given to us, there are no transactions that have been made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companics Act, 1956.

(vi) The Company has not accepted any deposits from public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956.

(ix) a. The Company is regular in depositing with appropriate authorities all applicable undisputed statutory dues viz. Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, and Cess. The other statutory dues viz. ESI, Excise duty, Customs duty and Cess are not applicable to this organization. There are no arrears of outstanding undisputed statutory dues as at 31st March 2010 for a period of more than six months from the date they become payable.

b. According to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues in respect of sales tax, income tax, interest tax, service tax and cess that have not been deposited.

Name of the Statute Assessment Amount Forum where the dispute is pending Year (Rs.Lakhs) i Income Tax Act 2000-01 580.32 Assessing Officer 2001-02 441.12 Assessing Officer 2003-04 19.94 Assessing Officer 2004-05 394.09 Assessing Officer 2005-06 239.53 Commissioner of Income Tax (Appeals) 2006-07 315.88 Commissioner of Income Tax (Appeals) 2007-08 1027.53 Commissioner of income Tax (Appeals) Interest Tax Act 1996-97 35.66 Madras High Court 1997-98 16.25 Income Tax Appeiiaie Tribunal 2000-01 5.81 IncomeTax Appellate Tribunal Sales Tax 1993-94 5.05 1994-95 8.63 Joint Commissioner of Commercial Taxes 1995-96 12.05 (Appeals) 1998-99 10.64

(x) The Company has no accumulated losses. The Company has not incurred cash losses during this financial year and the immediately preceding financial year.

(xi)The Company has not defaulted in repayment of dues to its bankers. There are no borrowings from financial institutions. The Company has not issued any debentures.

(xii) Adequate documents and records are maintained by the Company for the loans and advances granted on the | basis of security by way of pledge of shares and other securities

(xiii) The provisions of special statute applicable to chit funds / nidhi / mutual benefit funds / society do not apply to the Company.

(xiv) In our opinion and according to the information given to us, proper records have been maintained by the Company for the transactions and contracts relating to trading in shares, securities, debentures and other investments and timely entries have been made therein. The investments of the Company are held in its own name.

(xv) in our opinion and according to the explanations and information given to us the Company has not given guarantees for loans taken by others from banks and financial institutions.

(xvi) 1 he Company has not availed any term loans.

(xvii) No short-term funds have been raised during the year



(xviii) During the year, the 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.

(xix) Mo debentures have been issued by the Company during the year.

(xx) During the year, the Company has not raised any money by public issue.

(xxI) According to the information and explanations given to us. no fraud on or oy the Company has been noticed or reported during the year.



For & on behalf of Raman Associate Chartered Accountants Place: Chennai Date: 16.04.2010 G Venkataraman Partner Membership No. 10022