Ind Bank Housing Ltd

TO THE MEMBERS OF

IND BANK HOUSING LIMITED

We have audited the attached Balance Sheet of IND BANK HOUSING LIMITED, asat 31st March 2012 and also the Profit and Loss Account for the year ended on that dateannexed thereto. These financial statements are the responsibility of the Companysmanagement. Our responsibility is to express an opinion on these financial statementsbased on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. 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 basis for our opinion.

1. As required by Companies (Auditors Report) Order, 2003 issued by the CentralGovernment 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 5of the said order

3. Disputed income tax of Rs.432.12 Lacs for the Assessment Year 1999 - 2000 has notbeen provided in the accounts by the Company as the same is pending before Honble MadrasHigh Court, Chennai. Further Income Tax Department has raised a demand of Rs.19.02 Lakhsfor the Assessment Year 2005-06 has not been provided in the accounts by the Company asthe same is pending before The Commissioner of Income Tax Appeals - III, Chennai. (referNotes 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 ourknowledge 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 theCompany so far as appears from our examination of those books and proper returns adequatefor 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 inagreement 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 thisreport comply with the accounting standards referred to in sub-section (3C) of section 211of the Companies Act, 1956;

e. In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts together with the notes thereon give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fairview 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 31stMarch, 2012

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

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

5. On the basis of written representations received from the directors, as on 31stMarch, 2012 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified on 31st March, 2012 from being appointed as a director in termsof 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 includingquantitative 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), (iti), (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/fromCompanies, firms or other parties covered in the register maintained under Section 301 ofthe Companies Act 1956.

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

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

(i) NHB has allowed time upto 30.09.2001 to bring the Public Deposits within the limitsprescribed by the NHB. The Company has repaid all the deposit accepted from public exceptto the extent of Rs.6.92 Lacs, which represents the deposits matured but not claimed, forwhich 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 theNHB 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 theCompany we are of the opinion that the present system of Internal audit is adequate fromthe point of view of coverage/requirement.

7. (a) The company is regular in depositing undisputed statutory dues includingprovident fund dues and income tax with the concerned authorities. We are informed thatthe 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 disputedtaxes (including interest) have not deposited by the Company

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

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

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

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

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

13. According to the information and explanations given to us the company has notraised funds on short term basis during the year.

14. According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the year.

AUDITORS CERTIFICATE

The Board of Directors,

Ind Bank Housing Ltd,

No.480, Anna Salai,

Nandanam, Chennai - 600 035.

Dear Sir,

Sub: Statutory Audit of your Company Accounts for the FY 2011.12. With reference to theabove we report as under:

1. That Ind Bak Housing Ltd (IBH Ltd) is a registered Housing Finance Company undersection 29 A of the National Housing Bank Act, (NHB Act) 1987.

2. That IBH Ltd has complied with the liquidity requirements as specified u/s 29 B ofthe NHB Act.

3. As IBH Ltd has not earned any profit during the year, the question of compliance ofsection 29 C of NHB Act on the Reserve Fund does not arise.

4. That IBH Ltd has complied with the provision of NHB directions except as reportedhereunder:

a. The Company has not accepted any deposits from the public since January 1998. NHBhas allowed time upto 30.09.2001 to the Company to bring the Public Deposits within thelimits prescribed by the NHB. The Company has repaid all the deposits accepted from thepublic except Rs.6.92 Lacs, which represents the deposits matured but not claimed, forwhich the Company has deposited a sum of Rs.7.28 Lacs in Escrow a/c with Indian Bank.

b. The total borrowings of the Company is in excess of the limits prescribed by the NHBin relation to the net worth of the Company

5. That the capital adequacy ratio as disclosed in the return submitted to NHB has beencorrectly worked out and such ratio is not in compliance with NHB directions as net worthis negative.

6. That IBH Ltd has not defaulted in paying to its depositors the interest and / orprincipal amounts of deposits after such interest and / or principal became due.

7. IBH Ltd has complied with prudential norms guidelines issued by National HousingBank.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THECOMPANIES ACT 1956 ON THE ACCOUNTS OF IND BANK HOUSING LIMITED, CHENNAI FOR THE YEAR ENDED31 MARCH 2012

The preparation of financial statements of Ind Bank Housing Limited, Chennai for theyear ended 31 March 2012 in accordance with the financial reporting framework prescribedunder the Companies Act, 1956 is the responsibility of the management of the company Thestatutory auditor appointed by the Comptroller and Auditor General of India under Section619 (2) of the companies Act, 1956 is responsible for expressing opinion on thesefinancial statements under Section 227 of the Companies Act, 1956 based on independentaudit in accordance with the auditing and assurance standards prescribed by theirprofessional body the Institute of Chartered Accountants of India. This is stated to havebeen done by them vide their Audit Report dated 19 April 2012.

I, on behalf of the Comptroller and Auditor General of India, have conducted asupplementary audit under Section 619(3)(b) of the Companies Act 1956 of the financialstatements of Indbank Housing Limited for the year ended 31 March 2012. This supplementaryaudit has been carried out independently without access to the working papers of thestatutory auditor and is limited primarily to inquiries of the statutory auditor andcompany personnel and a selective examination of some of the accounting records. On thebasis of my audit, nothing significant has come to my knowledge which would give rise toany comment upon or supplement to Statutory Auditor's report under Section 619(4) of theCompanies Act, 1956.