Housing Development and Infrastructure

1 We have audited the attached Balance Sheet of HOUSING DEVELOPMENT AND
 INFRASTRUCTURE LIMITED, as at 31st March, 2009 together with Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto. These financial statements are the responsibility
 of the Company’s management. Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 2 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 misstatements.  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.
 
 3 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 Companies Act, 1956 and on the
 basis of such checks as we considered appropriate and according to the
 information and explanations given to us, we set out in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order.
 
 4 Further to our comments in Annexure referred to in paragraph 3 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 purpose of our
 audit;
 
 (b) in our opinion, the Company has kept proper books of account as
 required by law, so far as appears from our examination of those books;
 
 (c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with Accounting
 Standards referred to in sub-section 3(C) of Section 211 of the
 Companies Act, 1956, to the extent applicable;
 
 (e) on the basis of written representations received from the
 Directors, as on 31st March, 2009 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March, 2009 from being appointed as a director in terms of Clause
 (g) of sub-Section (1) of Section 274 of the Companies Act, 1956; and
 
 (f) 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 in the prescribed manner the information required by the
 Act 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 on 31st March, 2009,
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date,
 
 and
 
 (iii) in the case of Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 annexure to the auditors’ report
 
 Referred to in paragraph 3 of our report of even date on the accounts
 for the year ended 31st March, 2009 of Housing Development and
 Infrastructure Limited.
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 
 assets.
 
 (b) As explained to us, all the fixed assets have been physically
 verified by the management in accordance with the programme of
 verification, which in our opinion is reasonable, having regard to the
 size of the Company and nature of its assets. No material discrepancies
 were noticed on such verification as compared to the book records.
 
 (c) Fixed assets disposed off during the year were not substantial and
 therefore do not affect the going concern assumption.
 
 2.  (a) As explained to us, the physical verification of the inventory
 has been conducted by the management at reasonable
 
 intervals during the year.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed during physical verification of inventories as
 compared to book records were not material having regard to the size of
 the operations of the Company and have been dealt with in the books of
 account.
 
 3.  In respect of the loans, secured or unsecured, granted or taken by
 the Company to/from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956:- (a)
 The Company has given loan to eight companies. In respect of the said
 loan, the maximum amount outstanding at any
 
 time during the year is Rs.55,915.95 lacs and the year end balance is
 Rs. 55,915.95 lacs.
 
 (b) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the aforesaid loan are not
 prima facie prejudicial to the interest of the Company.
 
 (c) In respect of the loan given by the Company, the same is repayable
 on demand and therefore the question of overdue amount does not arise.
 
 (d) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 4.  In our opinion and according to the information and explanations
 given to us, there exists adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventories and fixed assets and for the development of
 real estate and with regard to the sale of units in real estate. During
 the course of our audit, we have not observed any continuing failure to
 correct major weaknesses in the internal controls.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, transactions made in pursuance of contracts
 
 or arrangements that need to be entered in to the register maintained
 under Section 301 of the Companies Act, 1956, for the year have been so
 entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in the pursuance of contracts or
 arrangements, that need to be entered into the register maintained
 under Section 301 of the Companies Act, 1956 and exceeding the value of
 Rupees Five Lacs in respect of any party during the year have been made
 at prices which are reasonable having regard to prevailing market
 prices.
 
 6.  As the Company has not accepted or renewed any deposit from the
 public, the directives issued by the Reserve Bank of India and the
 provisions of Section 58A and 58AA of the Companies Act, 1956 and the
 rules framed thereunder are not applicable.
 
 7.  According to the information and explanations given to us by the
 management, the Company has an adequate internal audit system
 commensurate with the size and nature of the business of the Company.
 
 8.  To the best of our knowledge and as explained, the Central
 Government has not prescribed the maintenance of cost records under
 Clause (d) of sub-section (1) of Section 209 of the Companies Act,
 1956.
 
 9.  (a) According to the information and explanations given to us by
 the management and on the basis of our examination of
 
 books of account of the Company, the Company is generally regular in
 depositing with appropriate authorities, undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income tax, Sales tax, Wealth tax, Service
 tax, Customs duty, Excise duty, Cess and any other statutory dues
 applicable to it with appropriate authorities. There were no dues on
 account of cess under Section 441A of the Companies Act, 1956, since
 the Central Government has not notified the date of the commencement of
 the section.
 
 (b) According to the information and explanations given to us by the
 management there are no undisputed amounts payable in respect of Income
 tax, Wealth tax, Sales tax, Service tax, Customs duty and Excise duty
 and other material statutory dues which were outstanding as at 31st
 March, 2009 for the period of six months from the date they became
 payable.
 
 (c ) According to the information and explanations given to us by the
 management there are no dues of Income tax, Wealth tax, Sales tax,
 Service tax, Customs duty and Excise duty, which have not been
 deposited on account of any dispute.
 
 10.  The Company does not have accumulated losses at the end of the
 financial year. The Company has not incurred cash losses during the
 financial year covered by our audit and in the immediately preceding
 financial year.
 
 11.  As per the information and explanations given to us by the
 management, the Company has not defaulted in repayment of dues to banks
 or financial institutions or debenture holders as at the balance sheet
 date.
 
 12.  In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 13.  The Company is not a chit fund or a nidhi/ mutual benefit fund/
 society. Therefore, the provisions of Clause 4(xiii) of the Order are
 not applicable to the Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities.  It
 has only invested in shares of subsidiaries, other body corporates and
 units of mutual funds for which proper records have been maintained and
 timely entries have been made therein. The said investment are held in
 company’s own name except as permissible under section 49 of the
 Companies Act, 1956.
 
 15.  As per the information and explanations given to us, the Company
 has not given any guarantee for loans taken from financial institutions
 and/or banks by others.
 
 16.  In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were raised other than amounts temporarily invested pending
 utilisation of the funds for the intended use.
 
 17.  In our opinion and according to the information and explanations
 given to us, and on overall examination of the Balance Sheet and the
 Cash Flow of the Company, we report that no funds raised on short-term
 basis have been used for long-term investment.
 
 18.  According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in the register maintained under Section 301 of
 the Companies Act, 1956.
 
 19.  According to the information and explanations given to us and the
 records examined by us, the Company has created/or in the process of
 creation of security or charges in respect of the debentures issued.
 
 20.  The Company has not raised any monies by way of public issues
 during the year.
 
 21.  On the basis of our examination and according to the information
 and explanations given to us, no fraud on or by the Company, has been
 noticed or reported during the course of our audit.
 
                                                     For THAR & CO.  
                                               Chartered Accountants
 
                                                   Jayesh R. Thar 
                                                    (Proprietor) 
                                              Membership No. 032917
 
 Place: Mumbai 
 Date: 23rd May, 2009