Religare Enterprises Ltd

Auditors' Report to the Members of Religare Enterprises Limited

1. We have audited the attached Balance Sheet of Religare Enterprises Limited(the "Company") as at March 31, 2011, and the related Profit and Loss Accountand Cash Flow Statement for the year ended on that date annexed thereto, which we havesigned under reference to this report. These financial statements are the responsibilityof the Company's Management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by Management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by theCompanies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"),issued by the Central Government of India in terms of sub-section (4A) of Section 227 of'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us, we give in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we reportthat:

(a) We have obtained all the information and explanations which, to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report comply with the accounting standards referred to in sub-section(3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March31, 2011 and taken on record by the Board of Directors, none of the directors isdisqualified as on March 31, 2011 from being appointed as a director in terms of clause(g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said financial statements together with the notes thereon and attachedthereto give, in the prescribed manner, the information required by the Act, and give atrue and fair view in conformity with the accounting principles generally accepted inIndia:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2011;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended onthat date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the members ofReligare Enterprises Limited on the financial statements for the year ended March 31,2011.

1. (a) The Company is maintaining proper records showing full particulars, includingquantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Managementduring the year and no material discrepancies between the book records and the physicalinventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, asubstantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The Company does not hold any inventories and therefore Clause 4(ii) of theOrder is not applicable to the Company.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firmsor other parties covered

in the register maintained under Section 301 of the Act. Accordingly, clauses (iii) (b)to (iii) (d) of paragraph 4 of the Order are not applicable to the Company for the currentyear.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms orother parties covered in the register maintained under Section 301 of the Act. According,Clauses (iii) (b) to (iii) d of paragraph 4 of the Order are not applicable to the Companyfor the current year.

4. In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of fixed assets and for the sale of services.Further, on the basis of our examination of the books and records of the Company, andaccording to the information and explanations given to us, we have neither come across norhave been informed of any continuing failure to correct major weaknesses in the aforesaidinternal control system.

5. According to the information and explanations given to us, there have been nocontracts or arrangements referred to in Section 301 of the Act during the year to beentered in the register required to be maintained under that Section. Accordingly, thequestion of commenting on transactions made in pursuance of such contracts or arrangementsdoes not arise.

6. The Company has not accepted any deposits from the public within the meaning ofSections 58A and 58AA of the Act and the rules framed thereunder.

7. In our opinion, the Company has an internal audit system commensurate with its sizeand nature of its business.

8. The Central Government of India has not prescribed the maintenance of cost recordsunder clause (d) of sub-section (1) of Section 209 of the Act for any of the products ofthe Company.

9. (a) According to the information and explanations given to us and the records of theCompany examined by us, in our opinion, the Company is generally regular indepositing the undisputed statutory dues including provident fund, investor education andprotection fund, employees' state insurance, income-tax, sales-tax, wealth tax, servicetax, customs duty, excise duty, cess and other material statutory dues as applicable withthe appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us, there are no dues of sales-tax, wealth-tax, service-tax, customsduty, excise duty and cess which have not been deposited on account of any dispute. TheParticulars of Income Tax dues are as follows:-

10. The Company has no accumulated losses as at March 31, 2011 and it has not incurredany cash losses in the financial year ended on that date.

11. According to the records of the Company examined by us and the information andexplanations given to us, the Company has not defaulted in repayment of dues to anyfinancial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutualbenefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities,debentures and other investments.

15. In our opinion and according to the information and explanations given to us, theterms and conditions of the guarantees given by the Company, for loans taken by othersfrom banks or financial institutions during the year, are not prejudicial to the interestof the Company.

16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in ouropinion and according to the information and explanations given to us, there are no fundsraised on a short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties andcompanies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued debentures during the year. Accordingly, the question ofcreation of security or charge does not arise.

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

21. During the course of our examination of the books and records of the Company,carried out in accordance with the generally accepted auditing practices in India, andaccording to the information and explanations given to us, we have neither come across anyinstance of fraud on or by the Company, noticed or reported during the year, nor have webeen informed of such case by the Management.