Auditor Report of Ind Bank Housing Ltd.

Mar 31, 2018

INDEPENDENT AUDITOR''S REPORT

To

The Members of Ind Bank Housing Limited

We have audited the accompanying financial statements of Ind Bank Housing Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss and 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

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 and presentation 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 (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2016.

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 applicable 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.

Auditor''s Responsibility

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.

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.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 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 preparation of the financial statements.

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

Opinion

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

Other Matters

We have issued an Audit Report dated 04.05.2018 (the original report) on the Standalone financial statement as adopted by Board of Directors on that date. Pursuant to the observation of Comptroller and Audit General of India under section 143(6)(a) of the Companies Act 2013 as regards the reference of Para Number given in the Audit Report are not matching with Para Numbers in the Notes to Accounts, a revised audit report suitably revising the reference Para Number in the Audit Report is issued now. This Audit Report supersedes the original report and except for the changes in the Reference Para Numbers, there is neither any change in the Audit Report nor any impact on the reported amount in the standalone financial statement of the Company.

Our opinion on the financial statements and our Report on other Legal and Regulatory Requirements below is not modified in respect of the above matters.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure-A, a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by Section 143(5), we have included in the Annexure-B, a statement on the matters specified in the ''Directions'' 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 it appears from our examination of those books;

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 the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 C"; and

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, 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 on its financial position in its financial statements vide Note No. 24(l) to the financial statements; ii. the Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 24(a) to the financial statements; iii. There are no amounts that are required to be transferred to the Investor Education and Protection Fund by the Company subject to Note

No.24 (k) to the financial statements.

	For Anand & Ponnappan
	Chartered Accountants
	FRN000111S
	CA R. Ananda Kumar
Chennai	Partner
26.06.2018	M.No. 021919

Annexure-A to the Auditor''s Report

The Annexure referred to in Independent Auditor''s Report to the members of the Company on the financial statements for the year ended 31 March 2018.

We report that:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. There is no immovable property held in the name of the Company, ii. The Company is a service company, primarily rendering financial services. Thus, paragraph 3(ii) of the Order on ''inventory'' is not applicable to the Company iii. The Company has not 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, 2013.

iv. There is no loans, investments, guarantees, and security attracting provisions of Section 185 and 186 of the Company''s Act, 2013. v. The Company has now stopped attracting deposits from the Public. It has repaid all the deposits accepted in the earlier years in compliance with the provisions of the Company''s Act, 1956 and the rules framed and directions issued by the National Housing Bank (NHB) except Rs.

6.33 lacs. This amount represent the deposit matured but withheld as Central Bureau of Investigation and Anti-Corruption Branch, Shastri Bhavan, Chennai has given direction not to release till the deposit of the pending cases, vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company. vii. (a)According to the information and explanations given to us and on the basis of our examination of the records of the Company, there were no dues towards 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 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 financial year concerned for a period of more than 6 months from the date they become payable except Rs. 19.02 lacs as reflected in the books of accounts towards Income Tax for the AY 2005-06. (b) According to the information and explanations given to us, there are no material dues of duty and customs which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax have not been deposited by the Company on account of dispute.

> Income tax of Rs. 432 lakhs for the assessment year 1999-00 which is pending before Madras High Court, viii. The Term Loans from Indian Bank including interest accumulated thereon outstanding as on 31.03.2017 is converted into Fund Interest Term Loan (FITL) with NIL interest from 01.04.2017 and then to convert FITL into Compulsory Convertible Preference Shares (CCPS) vide FILT agreement executed on 2001.2018.

ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable, x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit, xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid managerial remuneration and therefore compliance in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act does not arise, xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph

3(xii) of the Order is not applicable, xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards, xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable, xvi. The Company is engaged in housing finance under National Housing Bank and falling under the exempted category of RBI Act. Therefore the company is not required to be reqistered under Section 45-l-A of the Reserve Bank of India Act 1934.

	For Anand & Ponnappan
	Chartered Accountants
	Firm''s Registration Number 000111S
	CA R. Ananda Kumar
Chennai	Partner
26.06.2018	M.No. 021919

Annexure-B to the Auditor''s Report On the statement of the matters specified in the directions of Comptroller and Auditor General of India

1. According to the information and explanations given to us, there are no free hold and leasehold land in the books of account of the company and reporting requirement does not arise.

2. According to the information and explanations given to us, during the year under audit, there are no cases of waiver I write off of debts I loans I interest.

3. As the Company is falling under financial service the requirement of maintenance of records for inventory does not arise. According to the information and explanations given to us no assets have been received as gift I grant from Government or other authorities.

	For Anand & Ponnappan
	Chartered Accountants
	Firm''s Registration Number 000111S
	CA R. Ananda Kumar
Chennai	Partner
26.06.2018	M.No. 021919

ANNEXURE-C

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 Ind Bank housing Limited ("the Company") as of 31 March 2018 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 fICAI''l. 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 control 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 control 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 the transactions are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with the authorisations 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 Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of the 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

According to the information and explanation given to us, the Company has not established its internal financial control over financial reporting on criteria based on or 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.

More over it is informed that the Company''s incurring expenses only for its day to day operations after obtaining approval from the Managing Director such as Salary and other Statutory Expenses as it is engaged only in recovery of existing housing loans. Control over its financial transaction are commensurate with its level of operations.

In our opinion, the fundamental requirement of effective internal control is a process effected by people that support the organisation in several ways, enabling it to provide reasonable assurance regarding risk and to assist in the achievement of objectives. The Company, being smaller, less complex and have less formal documentation regarding the operation of its controls. However we applied testing controls through inquiry combined with other procedures such as observation of activities, inspection of less formal documentation, or performance of central controls to provide sufficient evidence about whether the control is effective.

We believe that that 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.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company, and the disclaimer does not affect our opinion on the standalone financial statements of the Company,

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018,

	For Anand & Ponnappan
	Chartered Accountants
	Firm''s Registration Number 000111S
	CA R. Ananda Kumar
Chennai	Partner
26.06.2018	M.No. 021919

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF IND BANK HOUSING LIMITED, CHENNAI FOR THE YEAR ENDED 31 MARCH 2018.

The preparation of financial statements of Ind Bank Housing Limited for the year ended 31 March 2018 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditor appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit-Report dated 04.05.2018.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statement of Ind Bank Housing Limited for the year ended 31 March 2018. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquire of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit, nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditor''s report.

	FOR AND ON BEHALF OF THE
	COMPTROLLER AND AUDITOR GENERAL OF INDIA
	(R. AMBALAVANAN)
PLACE: CHENNAI	PRINCIPAL DIRECTOR OF COMMERCIAL AUDIT &
DATE: 09.07.2018	EX-OFFICIO MEMBER AUDIT BOARD, CHENNAI

---

Mar 31, 2015

We have audited the accompanying financial statements of Ind Bank Housing Limited ('the Company"), 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

The Board of Directors of the Company is responsible for the matters stated in 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 implementation and maintenance of internal financial control as designed by the Board of Directors, 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

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.

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.

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 preparation of the financial statements of the company that give 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 evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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 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 Profit and Loss Account, 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

Without qualifying our opinion attention is drawn to

1) Note No 19(b) of the financial statements on the applicability of the 'Going concern concept' as opined by the company.

2) Note No 19 (g) on the excess recovery over and above the dues, as a result of sale of property under SARFASI, which are retained under other current liability for want of borrower's whereabouts.

3) Note No 19(h) on Advance payment of IT net of provision appearing under "Long Term Loans & Advances" pending reconciliation, which requires adjustments for recognition of interest income/ expenses and provisioning.

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 section 143 of the Act, we give in the Annexure -1, a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2) As required by section 143(5), we have included in the Annexure -2, a statement on the matters specified in the Directions 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 31.03.2015 taken on records by the Board of Directors, none of the directors is disqualified as on 31.03.2015 from being appointed as a director in terms of Section 164 (2) of the Act,

f. 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 on its financial position in its financial statements - Refer Note 19(h)to the financial statements

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

iii. There are no amounts that are required to be transferred to Investor Education and Protection Fund by the Company. Refer Note No 19(k) to the financial statements.

Annexure 1 to the Auditors' Report

The Annexure referred to in our report to the Members of Ind Bank Housing Limited for the year ended 31 March 2015.

We report that:

1) The Company has maintained records showing full particulars, including quantitative details and situation of fixed assets. These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

2) The Company is a service company, primarily rendering financial services. Thus, paragraph 3(ii) of the Order is not applicable.

3) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to services. We have not observed any major weakness in the internal control system during the course of the audit.

4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A of the company act, 1956 and the rules framed and directions issued by National Housing Bank (NHB) wherever applicable to deposits accepted from public. However the company now stopped accepting deposits from the public. The Company has repaid all the deposit accepted from public except to the extent of Rs.6.33 Lacs, which represents the deposits matured but withheld as Central Bureau of Investigation Anti-Corruption Branch, Shastri Bhavan, Chennai has given direction not to release till the disposal of the pending cases.

5) The Government of India has not prescribed the maintenance of cost records under Section 148(1) of the Act for any of the services rendered by the company.

6) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Value Added Tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees' State Insurance, Customs duty and Excise duty. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales-tax, Value Added Tax, Wealth tax, Service tax and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable except Rs.19.02 lakhs towards income tax for the AY 2005-06.

7) According to the information and explanations given to us, there are no material dues of Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues tax have not been deposited by the company on account of disputes:

Name of the Nature of Amount Rs. Period to Forum where Statute Dues which the disputeis the amount pending relates

Income Tax Tax demand 432 lakhs AY 1999-2000 Madras High court

8) There are no amounts that are required to be transferred to Investor Education and Protection Fund by the Company.

9) The accumulated loss at the end of the financial year is Rs.110.93 cr and has incurred a cash loss of Rs.12.18Cr during the financial year covered by our audit and a loss of Rs.9.40 crores during the immediately preceding financial year

10) The Company has defaulted in repayment of dues to bank, parent company. The entire amount outstanding as reflected in the financial statement as on 31.03.2015 is overdue.

11) 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.

12) The term loans amounting to Rs.105.13cr as reflected in the books of account are outstanding during the year.

13) According to the information and explanations given to us, during the year, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Anand & Ponnappan Chartered Accountants Firm's Registration Number 000111S

(R.Anandakumar) (Partner) Place: Chennai Membership Number 021919 Date: 11.05.2015

---

Mar 31, 2014

We have audited the accompanying financial statements of IND BANK HOUSING LIMITED, which comprise the Balance Sheet as at March 31, 2014, and 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

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.

Auditors'' Responsibility

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.

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 statements 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 management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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:

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

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

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. Attention of the members is invited to Notes an Accounts under (b) regarding preparation of accounts on a going concern basis. This is subject to the Company getting the continued financial support from Indian Bank as stated in the said notes.

3. 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 subsection (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.

(Referred to in paragraph 1 of our Report of even date)

1. (a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets. (b) The fixed assets have been physically verified by the management during the year. No discrepancies were noticed on such physical verification.

2. According to the information and explanations given to us the provisions of clauses (ii), (iii), (v), (viii), (xiii), (xviii), (xix), (xx) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

3. The Company has not granted or taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and the rules framed and directions issued by National Housing Bank (NHB) wherever applicable to deposits accepted from public except as stated hereunder:

(i) NHB has allowed time upto 30.09.2001 to bring the Public Deposits within the limits prescribed by the NHB. The Company has repaid all the deposit accepted from public except to the extent of Rs.6.35 Lacs, which represents the deposits matured but not claimed, for which the company has deposited a sum of Rs. 6.33 Lacs in Escrow A/c with Indian Bonk.

(ii) The total borrowing of the Company is in excess of the limits prescribed by the NHB in relation to the net worth of the Company and has been reported to NHB.

6. Taking into account the volume and nature of operations presently carried on by the Company, we are of the opinion that the present system of internal audit is adequate from the point of view of coverage/requirement.

7. (a) The company is regular in depositing undisputed statutory dues including provident fund dues and income tax with the concerned authorities. We are informed that the provisions of Employees State Insurance Act, 1948, Wealth Tax Act, Sales Tax Act, Customs and Excise laws are not applicable to this Company.

(b) According to the information and explanations given to us the following disputed taxes (including interest) as disclosed in Contingent Liabilities have not been deposited by the Company.

Nature Amount Rs. In Lacs Forum

Income Tax disputed 432.00 Hon''ble Madras High Court, in appeal A.Y. Chennai 1999-2000

A.Y.2005-2006 19.02 The Commissioner of Income Tax (Appeals) - III, Chennai.

8. The accumulated loses of the Company at the end of the financial year exceeds fifty per cent of its net worth. The Company has incurred cash losses in the current financial year and in the immediately preceding financial years.

9. The Company has defaulted in repayment of dues to financial institutions and banks as per the details given below:

Institutions Amount of default In default since Nature of loan Rs in lacs

1 Indian Bank 4406.70 July 1999 Term loan - TL III

2 Indian Bank 5049.62 Loan availed Term loan - TL IV in July 2004

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

11. The Company does not deal or trade in shares, securities, debentures and other investments in the ordinary course of its business.

In respect of shares and securities held as investments by the Company proper records have been maintained for transactions and contracts and timely entries have been made therein.

12. 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.

13. According to the information and explanations given to us the company has not raised funds on short term basis during the year.

14. 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 Venkat and Rangaa Chartered Accountants FRN: 4597 S

Place : Chennai S. Mohan Raajan Date : 23.04..2014 Partner M.No.206393

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Mar 31, 2013

We have audited the accompanying financial statements of IND BANK HOUSING LIMITED, which comprise the Balance Sheet as at March 31, 2013, and 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 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.

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.

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 statements 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 management, as well as evaluating the overall presentation of the financial statements.

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

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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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. Attention of the members is invited to Notes on Accounts under (b) regarding preparation of accounts on a going concern basis. This is subject to the Company getting the continued financial support from Indian Bank as stated in the said notes.

3. 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 subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, 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 IND BANK HOUSING LIMITED. on the accounts of the company for the year ended 31st March, 2013.

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

(b) The fixed assets have been physically verified by the management during the year. No discrepancies were noticed on such physical verification.

2. According to the information and explanations given to us the provisions of clauses (ii),(iii), (v), (viii), (xiii), (xviii), (xix), (xx) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the company.

3. The company has not granted or taken any loans, secured or unsecured to /from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of fixed assets.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and the rules framed and direction''s issued by National Housing Bank (NHB) Wherever applicable to deposits accepted from public except as stated hereunder;

i. NHB allowed time upto 30.09.2001 to bring the Public Deposits within the limits prescribed by the NHB. The company has repaid all the deposit accepted from public except to the extent of Rs.6.50 lacs, which represents the deposits matured but not claimed, for which the company has deposited a sum of Rs.6.85 lacs in Escrow a/c with Indian Bank.

ii. The total borrowing of the company is in excess of the limits prescribed by the NHB in relation to the net worth of the company and has been reported to NHB.

6. Taking into account the volume and nature of operations presently carried on by the company, we are of the opinion that the present system of internal audit is adequate from the point of view of coverage/requirement.

7. a) The company is regular in depositing undisputed statutory dues including provident fund dues and income tax with the concerned authorities. We are informed that the provisions of Employees State Insurance Act, 1948, Wealth Tax Act, Sales Tax Act, Customs and Excise laws are not been applicable to this company.

b) According to the information and explanations given to us the following disputed taxes (including interest) as disclosed in Contingent Liabilities have not been deposited by the Company

Nature Amount Rs. in Lacs Forum

Income Tax disputed in 432.00 Humble Madras High Court, Chennai appeal - A.Y.1999-2000

A.Y. 2005-2006 19.02 The Commissioner of Income Tax (Appeals) - III, Chennai

8. The accumulated loses of the company at the end of the financial year exceeds fifty percent of its net worth. The Company has incurred cash losses in the current financial year and in the immediately preceding financial years.

9. The Company has defaulted in repayment of dues to financial institutions and banks as per the details given below :

Sl Institutions Amount of In default since Nature of loan No default Rs in lacs

1 Indian Bank - TL III 3957.39 July 1999 Term loan

2 Indian Bank - TL IV 4541.84 Loan avail in July 2004 Term loan

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

11. The Company does not deal or trade in shares, securities, debentures and other investments in the ordinary course of its business. In respect of shares and securities held as investments by the Company proper records have been maintained for transactions and contracts and timely entries have been made therein.

12. According to the information and explanations given to us the Company has not given any guarantee for loans taken by other from banks of financial institutions.

13. According to the information and explanations given to us the company has not raised funds on short term basis during the year.

14. 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 Venkat and Rangaa.

Chartered Accountants

FRN:4597 S

S.Mohan Raajan

Place: Chennai Partner

Date: 03.05.2013 M.No.206393

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Mar 31, 2012

We have audited the attached Balance Sheet of IND BANK HOUSING LIMITED, as at 31st March 2012 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion. '

1. As required by Companies (Auditors Report) Order, 2003 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. Attention of the members is invited to Notes on Accounts under (b) regarding preparation of accounts on a going concern basis. This is subject to the Company getting the continued financial support from Indian Bank as stated in the said notes.

3. Disputed income tax of Rs.432.12 Lacs for the Assessment Year 1999 - 2000 has not been provided in the accounts by the Company as the same is pending before Honble Madras High Court, Chennai. Further Income Tax Department has raised a demand of Rs.19.02 Lakhs for the Assessment Year 2005-06 has not been provided in the accounts by the Company as the same is pending before The Commissioner of Income Tax Appeals - III, Chennai, (refer Notes on Accounts under SI.No. h).

4. Further to our comments in the Annexure referred to above, 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 purposes of our audit;

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with, the books of account and with the returns from the branches;

d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. In our opinion and to the best of our information and according to the explanations given, to us, they said accounts together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the ca6e of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

ii. In the case of the Profit and Loss Account, of the Loss for the year ended on that date and

iii. In the case of Cash Flow Statement, of the cash flow for the year ended on that date.

5. On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified is on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. ,

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 1 of our Report of even date)

1. (a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management during the year. No discrepancies were noticed on such physical verification.

2. According to the information and explanations given to us the provisions of clauses (ii), (iii), (v), (viii), (xiii), (xviii), (xix), (xx) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

3. The Company has not granted or taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and the rules framed and directions issued by National Housing Bank (NHB) wherever applicable to deposits accepted from public except as stated hereunder;

(i) NHB has allowed time up to 30.09.2001 to bring the Public Deposits within the limits prescribed by the NHB. The Company has repaid all the deposit accepted from public except to the extent of Rs.6.92 Lacs, which represents the deposits matured but not claimed, for which the company has deposited a sum of Rs.7.28 Lacs in Escrow A/c with Indian Bank.

(ii) The total borrowing of the Company is in excess of the limits prescribed by the NHB in relation to the net worth of the Company and ha s been reported to NHB.

6. Taking into account the volume and nature of operations presently carried on by the Company, we are of the opinion that the present system of internal audit is adequate from the point of view of coverage/requirement.

7. (a) The company is regular in depositing undisputed statutory dues including provident fund dues and income tax with the concerned authorities. We are informed that the provisions of Employees State Insurance Act, 1948, Wealth Tax Act, Sales Tax Act, Customs and Excise laws are not been applicable to this Company.

(b) According to the information and explanations given to us the following disputed taxes (including interest) have not deposited by the Company.

Nature Amount Forum Rs. In Lacs

Income Tax disputed in appeal- 432.00 Hon ble Madras High Court, Chennai

- A. Y1999-2000

- A.Y2005-2006 19.02 The Commissioner of Income Tax (Appeals) - III, Chennai.

8. The accumulated loses of the Company at the end of the financial year exceeds fifty percent of its net worth. The Company has incurred cash losses in the current financial year and in the immediately preceding financial years.

9. The Company has defaulted in repayment of dues to financial institutions and banks as per the details given below:__

SI No Institutions Amount of default In default since Nature of loan Rs in lacs

1 Indian Bank-TL III 3571.68 July 1999 Term loan

2 Indian Bank-TL IV 4091.71 Loan availed in June 2004 Term loan

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

11. The Company does not deal or trade in shares, securities, debentures and other investments in the ordinary course of its business. In respect of shares and securities held as investments by the Company proper records have been maintained for transactions and contracts and timely entries have been made therein.

12. According to the information and explanations given to us the Company has not given any guarantee for loans taken by other from banks of financial institutions.

13. According to the information and explanations given to us the company has not raised funds on short term basis during the year.

14. 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 VENKAT & RANGAA

Chartered Accountants

Place : Chennai S.Mohan Raajan

Date : 19.4.2012 Partner

M.No:206393

---

Mar 31, 2010

We have audited the attached Balance Sheet of IND BANK HOUSING LIMITED, as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

1. As required by Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Attention of the members is invited to Notes on Accounts under (b) regarding preparation of accounts on a going concern basis. This is subject to the Company getting the continued financial support from Indian Bank as stated in the said notes.

3. Disputed income tax of Rs.432.12 Lacs for the Assessment Year 1999 - 2000 has not been provided in the accounts by the Company as the same is pending before Honble Madras High Court, Chennai. Further Income Tax Department has raised a demand of Rs.19.02 Lakhs for the Assessment Year 2005-06 has not been provided in the accounts by the Company as the same is pending before The Commissioner of Income Tax Appeals - III, Chennai. (refer Notes on Accounts under SI.No. h).

4. Further to our comments in the Annexure referred to above, 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 purposes of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

c) The Balance Sheet and Profit and Loss Account dealt with by this report are irr agreement with the books of account and with the returns from the branches;

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 (ii) In the case of the Profit and Loss Account, of the Loss for the year ended on that date and (iii) In the case of Cash Flow Statement, of the cash flow for the year ended on that date.

5. On the basis of written representations received from the directors, as on 31s1 March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31s1 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.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our Report of even date)

1. (a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets. (b) The fixed assets have been physically verified by the management during the year. No discrepancies were noticed on such physical verification.

2. According to the information and explanations given to us the provisions of clauses (ii), (iii), (v), (viii), (xiii), (xviii), (xix), (xx) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

3. The Company has not granted or taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and the rules framed and directions issued by National Housing Bank (NHB) wherever applicable to deposits accepted from public except as stated hereunder;

(i) NHB has allowed time upto 30.09.2001 to bring the Public Deposits within the limits prescribed by the NHB. The Company has repaid all the deposit accepted from public except to the extent of Rs. 15.76 Lacs, which represents the deposits matured but not claimed, for which the company has deposited a sum of Rs. 16.00 Lacs in Escrow A/c with Indian Bank.

(ii) The total borrowing of the Company is in excess of the limits prescribed by the NHB in relation to the net worth of the Company and ha s been reported to NHB.

6. Taking into account the volume and nature of operations presently carried on by the Company, we are of the opinion that the present system of internal audit is adequate from the point of view of coverage/requirement.

7. (a) The company is regular in depositing undisputed statutory dues including provident fund dues and

income tax with the concerned authorities. We are informed that the provisions of Empjoyees State Insurance Act, 1948, Wealth Tax Act, Sales Tax Act, Customs and Excise laws are not been applicable to this Company. (b) According to the information and explanations given to us the following disputed taxes (including interest) have not deposited by the Company.

Nature Amount Forum Rs. In Lacs

Income Tax disputed in appeal- 432.00 Honble Madras High Court, Chennai

- A.Y.1999-2000

-A.Y.2005-2006 19.02 The Commissioner of Income Tax (Appeals) - III, Chennai.

8. The accumulated loses of the Company at the end of the financial year exceeds fifty percent of its net worth. The Company has incurred cash losses in the current financial year and in the immediately preceding financial years.

9. The Company has defaulted in repayment of dues to financial institutions and banks as per the details

given below:

SI. No. Institutions Amount ofdefault In default Nature (Rs. in Lacs) since of loan

1. Indian Bank-TLIII 3,595.15 July 99 Term Loan

2. Indian Bank-TL IV 3,346.84 Loan availed in June 04 Term Loan

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

2. The Company does not deal or trade in shares, securities, debentures and other investments in the ordinary course of its business. In respect of shares and securities held as investments by the Company proper records have been maintained for transactions and contracts and timely entries have been made therein.

3. According to the information and explanations given to us the Company has not given any guarantee for loans taken by other from banks of financial institutions.

4. According to the information and explanations given to us the company has not raised funds on short term basis during the year.

5. 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 Basha & Narasimhan, Chartered Accountants

Place : Chennai (K. Narasimha Sah)

Date : 16-04-2010 Partner (M.No.201777)