Infrastructure Development Finance Company

1.  We have audited the attached Balance Sheet of INFRASTRUCTURE
 DEVELOPMENT FINANCE COMPANY LIMITED as at March 31, 2009, the Profit
 and Loss Account and the Cash Flow Statement of the Company for the
 year ended on that date, both 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 the auditing standards
 generally accepted in India. These 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 the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the 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 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we give in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above:
 
 (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 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 Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) as required by Article 215(4)(f) of the Articles of Association of
 the Company, we report that in our opinion, the transactions of the
 Company which have come to our notice have been within the powers of
 the Company;
 
 (e) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (f) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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 March 31, 2009;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of the written representations from the directors,
 taken on record by the Board of Directors as on March 31, 2009, none of
 the directors is disqualified as on March 31, 2009 from being appointed
 as a director under Section 274(1)(g) of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS’ REPORT
 
 (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)
 
 i. The nature of the Company’s business/activities during the year is
 such that clauses (i)(c), (ii), (viii), (x), (xiii) and (xx) of CARO
 are not applicable.
 
 ii.  In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) Fixed assets were physically verified during the year by the
 Management in accordance with a programme of verification, which in our
 opinion provides for physical verification of all the fixed assets at
 reasonable intervals. According to the information and explanations
 given to us, no material discrepancies were noticed on such
 verification.
 
 iii. In respect of loans, secured or unsecured, given to companies,
 firms or other parties covered in the Register maintained under Section
 301 of the Companies Act, 1956, according to the information and
 explanations given to us:
 
 (a) The Company has granted loans to two parties. At the year-end, the
 outstanding balances of such loans granted aggregated Rs. Nil and the
 maximum amount involved during the year was Rs.3,000,000,000.
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interests of
 the Company.
 
 (c) The receipts of principal amounts and interest have during the year
 been regular/as per stipulations.
 
 iv. The Company has not taken any loan, secured or unsecured, from
 companies, firms or other parties covered in the Register maintained
 under Section 301 of the Companies Act, 1956.
 
 v.  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 for the
 purchase of fixed assets and for sale of goods and services. During the
 course of our audit, we have not observed any major weakness in such
 internal control system.
 
 vi.  In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered into the Register maintained under the
 said Section have been so entered.
 
 (b) Where each of such transactions (excluding loans reported under
 paragraph (iii) above) is in excess of Rs 5 lakhs in respect of any
 party, the transactions have been made at prices which are prima facie
 reasonable having regard to the prevailing market prices wherever
 applicable, at the relevant time.
 
 vii. The Company has not accepted any deposit from the public within
 the meaning of Section 58A and Section 58AA of the Companies Act, 1956.
 
 viii. In our opinion, the internal audit functions carried out during
 the year by a firm of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 ix.  According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has been regular in depositing undisputed dues
 including Provident Fund, Income Tax, Wealth Tax, Service Tax, Cess and
 any other material statutory dues with the appropriate authorities
 during the year.
 
 (b) There were no undisputed amounts payable on account of the above
 dues outstanding as at March 31, 2009 for a period of more than six
 months from the date they became payable.
 
 (c) There were no disputed Income Tax, Wealth Tax and Service Tax dues
 which were not deposited as on March 31, 2009.
 
 x.  According to the information and explanations given to us, the
 Company has not defaulted in the repayment of dues to financial
 institutions, banks and debentureholders.
 
 xi. In our opinion the Company has maintained adequate documents and
 records where it has granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 xii. Based on our examination of the records and evaluation of the
 related internal controls, the Company has maintained proper records of
 transactions and contracts in respect of its dealing in shares,
 securities, debentures and other investments and timely entries have
 been made therein. The aforesaid securities have been held by the
 Company in its own name, except to the extent of the exemption granted
 under Section 49 of the Companies Act, 1956.
 
 xiii. In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by others from banks and financial institutions
 are not prima facie prejudicial to the interests of the Company.
 
 xiv. To the best of our knowledge and belief and according to the
 information and explanations given to us, term loans availed by the
 Company were prima facie applied by the Company during the year for the
 purposes for which the loans were obtained, other than temporary
 deployment pending application.
 
 xv. According to the information and explanations given to us and on an
 overall examination of the Balance Sheet of the Company, funds raised
 on short-term basis have prima facie not been used for long term
 investment.
 
 xvi. According to the information and explanations given to us, the
 price at which the Company has made preferential allotment of shares
 under the Employees’ Stock Option Scheme to parties covered in the
 Register maintained under Section 301 of the Companies Act, 1956 is not
 prima facie prejudicial to the interests of the Company.
 
 xvii. According to the information and explanations given to us and the
 records examined by us, securities/charges have been created in respect
 of all debentures issued.
 
 xviii. To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 was noticed or reported during the year.
 
                                         For DELOITTE HASKINS & SELLS
 
                                                Chartered Accountants
                                                        NALIN M. SHAH
                                                              Partner
                                                (Membership No. 15860)
 Mumbai  28th April, 2009