CFL Capital Financial Services Ltd Auditor Reports

To the Members of CFL Capital Financial Services Limited Report on the Financial Statements

1.We have audited the accompanying standalone financial of CFL Capital Financial Services Limited (‘the Company’), (CIN: L67120WB1983PLC036805) which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and 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.Management 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 to 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 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 internal financial controls, that are 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.

Auditors’ Responsibility

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

4.We have taken into account the provisions of the Act and the Rules thereunder including the accounting standards and matters which are required to be included in the Audit Report,

5.We conducted our audit in accordance with the Standards on specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6.An audit involves performing procedures to obtain audit evidence 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 of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaulauting 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 Financial statements.

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

Basis for Qualified Opinion

8. Attention is drawn to :- a. Non-compliance of the provisions of the Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 16(11)) b. The company has not been able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007. (Refer Note 16(11)) The Company is not in a position to carry on business of Non Banking Financial Services

Qualified Opinion

9.In our opinion and to the best of our information and according to the explanations given to us, except to the possible effects of the matter described in the Basis for qualified Opinion paragraph 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.

(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 loss 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.

Emphasis of matter

10 i) Note 1.A, 1.B and 1.C in the Financial statements indicate that the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net cash loss during the current and previous years and, the Company’s current liabilities exceeded the current assets as at the Balance sheet date. These conditions, along with the other matters set forth in the above note, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. However financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note. ii) Loans from Banks and UTI and interest charged thereon have been provided as per the claims before / orders passed by the Debt Recovery Tribunals (see notes 6.4, 6.5 6.6 and 6.8) Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by ‘The Companies (Auditor’s Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as ‘Order’), and on the basis of such checks of the books and records of the Company as we consider appropriate and according to the information and explanations given to us, we give in the made Annexure a statement in the matters specified in paragraphs 3 and 4 of the Order 12. As required by Section 143(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. about c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement 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 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 31st March, 2015 taken on record by the Board of Directors, none of the Directors is disqualified from being appointed as director (in terms of Section 164(2) of the Act, f With respect to the 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 knowledge and belief and according to the information and explanations given to us : and

1.The Company has disclosed the impact of pending litigations as on 31st March, 2015 on its financial position in the financial statements

2.The Company has made provision as at 31st March 2015 as required under the applicable law or accounting standards for material foreseeable losses, if any, on long term contracts including derivative contracts,

3.There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015.

	For Tarmaster & Co.,
	Chartered Accountants
	( Firm Registration No 302016E)
	A K Chakrabarti
	Partner
	Membership No. 015374
Kolkata
Date : 27th May, 2015

Annexure to the Independent Auditors’ Report

(referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date) The annexure referred to in the Independent Auditors’ Report to the members of CFL Capital Financial Services Limited (the Company) for the year ended March 31, 2015. We report that:

1.The Company has maintained proper records showing full including quantitative details and situation of fixed assets The Company has a phased programme of physical verification of assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification..

2.The Stock of Shares and Securities of the Company has been verified by the Management during the year and no discrepancies were noticed between physical and book stock

3.The Company has neither granted nor taken any loans, unsecured to or from companies, firms or other parties covered in the register maintained under section 189 of the Act.

4.In our opinion, and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of securities, fixed assets and for sale of securities and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not come across any major weakness in the Internal Control system.

5.In our opinion, and according to the information and explanations given to us the Company has neither accepted or renewed any deposits from the public within the meaning of Section 73 and 74 of the Act and Rules framed thereunder to the extent notified during the year. However, in our opinion and according to the information and explanations given to us, the Company had accepted deposits in earlier years by complying the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules thereunder and also the directives of the Reserve Bank of India with regard to acceptance of deposits from the public. The Company had defaulted in repayment of deposits and has got an order from the Company Law Board as per the provisions of Section 58AA of the Companies Act 1956. The Company Law Board had permitted the Company to repay the depositors in installments by 31^st December, 2012.The Company has repaid in full to depositors who had claimed the same. (Refer note 6.7)

6.According to the information and explanations given to us, the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government are not applicable in respect of services carried out by the Company.

7. a. According to the information and the explanations given to us, and on the basis of our examination of the account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income- tax, sales tax, wealth tax, service tax value added tax, duty of customs, duty of excise and any other material statutory dues, as applicable, with the appropriate authorities . b. According to the information and explanations given to us and on the basis of the documents and records, the following disputed statutory dues on account of Income Tax and Sales tax have not been deposited with the appropriate authorities Annexure 1. c. The amount required to be transferred to the Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act 1956 and the rules made thereunder

8.The Company has accumulated losses of Rs. 85,183.83 lakhs at the financial year and has incurred cash losses in the financial year and in the immediately preceding financial year.

9.On the basis of the books and records examined by us and the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks as per details given below - Annexure II.

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. The Company was registered as Non Banking Finance Company with the Reserve bank of India but the same stands cancelled with effect from May 18, 2004. (Refer Note 1-C)

12. In respect of shares, shares securities debentures and other investments dealt or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are in the Company’s present or former name.

13. According to the information and explanations given to us, on an overall basis, the term loans taken in previous years have been applied for the purpose they were obtained 14. During the course of our examination of the books and records of the its fixed Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither across any instance of material fraud on or by the Company, noticed or reported during the year, not have been informed of any such case by the Management.

	For Tarmaster & Co.,
	Chartered Accountants
	( Firm Registration No 302016E)
	A K Chakrabarti
	Partner
	Membership No. 015374
Kolkata
Date : 27th May, 2015

Annexure to Auditors’ Report for year ended 31^st March 2015

Particulars of disputed statutory liability not paid to the authorities

Annex - I

Name of the Statute	Nature of dues	Amount in lakhs	Period to which Amount relates	Forum where the dispute is pending
Sales Tax	Jurisdiction of Assessing office and Lease Tax	121.14	1996-97 to 1998-99	Orissa Sales Tax Tribunal
	Lease Tax	0.15	1999-2000	Commissioner of Sales Tax, Bhubhaneshwar
	Sales Tax	1.31	1996-97	Commercial Tax Dept. Lucknow
Bombay Stamp Act, 1959	Stamp Duty	43.80		Superintendent of Stamps

Annex - II Annexure to Auditors’ Report for year ended 31-Mar-2015

(Rs. in Lakhs)

Name of Bank /Financial Institution/ Mutual Fund	Default Principal as per Lender	Interest as per appeal / Order	Total
ICICI Bank Ltd. (formerly Bank of Rajasthan Ltd.)	852.06	4,235.15	5,087.22
Catholic Syrian Bank Ltd.	646.23	650.87	1,297.10
Dena Bank	1,926.38	6,123.36	8,049.74
Federal Bank Ltd.	780.64	2,766.61	3,547.26
Indusind Bank Ltd.	1,349.75	3,722.18	5,071.93
Oriental Bank of Commerce	447.18	2,598.00	3,045.19
Kotak Bank Ltd. (formerly State Bank of Travancore)	793.85	1,479.43	2,273.28
Asset Reconstruction Co. (I) Ltd.	840.21	2,853.27	3,693.48
(formerly South Indian Bank Ltd.) of Vijaya Bank	1,215.26	1,997.93	3,213.19
Axis Bank Ltd.	700.72	659.66	1,360.38
	9,552.30	27,086.47	36,638.77
UTI Asset Management Co Ltd.	248.62	2,151.55	2,400.18
Administrator of the Specified Undertaking of UTI	432.60	3,743.05	4,175.65
	681.23	5,894.60	6,575.83

The principal amount Is as claimed by the lenders in their applications before the appellate authorities. Interest is calculated at the rates demanded by them or as per the orders passed by the Appellate Authorities.