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Auditor Report of Housing Development & Infrastructure Ltd.

Mar 31, 2015

We have audited the accompanying Financial Statements of Housing Development and Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, 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 Standalone 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 of these standalone 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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 standalone 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, but not for purpose of expressing an opinion on whether the Company has in place of adequate internal financial control system over financial reporting and operating effectiveness of such controls. 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 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31st March, 2015 and its profit and its 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, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 as referred to in Note 31 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 long-term contracts including derivative contracts;

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date on the financial statements for the year ended on 31st March, 2015 of Housing Development and Infrastructure Limited:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets. (b) All the Fixed Assets have been physically verified by the management in a phased manner, over a period of one year, which in our opinion, is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) Other than opening outstanding balances of loan to subsidiaries, the Company has not granted any further loans to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(b) No repayment schedule has been specified and repayment has been made on demand, therefore the question of regularity in repayment of principal amount, wherever applicable, does not arise.

(c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets, sale of units in real estate and services. During the course of audit, we have not observed any continuing failure to correct the major weaknesses in the internal control system.

(v) The Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Act and rules framed there under to the extent notified.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148 (1) of the Act and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed amount payable in respect of provident fund, employee's state insurance, income-tax, sales tax, wealth-tax, service-tax and other material statutory dues as applicable with the appropriate authorities except the following dues which were outstanding as at 31st March, 2015 for a period more than 6 months from the date they became payable-

Nature of dues Rs. in Lacs

Tax Deducted at Source (Including Interest) 758.99

Service Tax (Interest Only) 0.62

Value Added Tax (Interest Only) 345.69

(b) According to the information and explanations given to us, there are no material dues of service tax, value added tax, wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute, except following Income-tax demand:

Financial Year Income tax Demand (Rs. in Lacs)

2010- 11 25,772.37

2011- 12 1,419.40

The Company has filed appeal before the Commissioner of Income Tax, Appeals (41), Mumbai and the Commissioner of Income Tax, Appeals (53) respectively for both the above mentioned Income tax demand. The Company has also filed stay application under section 220(6) of the Act before the assessing officer and disposal of the same is pending.

(c) The amounts required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made there under.

(viii) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by the audit and also in the immediately preceding financial year.

(ix) As per the information and explanations furnished to us and our verification of records of the Company, the Company has delayed in repayment of dues to Debenture Holders, Financial Institutions and Banks. An amount of Rs. 43,528.16 lacs towards principal and Rs. 6,075.61 lacs towards interest to Non-Cumulative Debenture Holders, Rs. 3,171.86 lacs towards interest on Term Loans from Financial Institutions and Rs. 7,964.31 lacs towards principal and Rs. 4,602.21 lacs towards interest on Term Loan from Scheduled Banks are due as at the year end.

(x) The Company has given guarantees for loans taken by wholly owned subsidiary Companies, from banks and financial institutions. According to the information and explanations given to us, the terms and conditions of the aforesaid guarantees are not, prima facie, prejudicial to the interest of the Company.

(xi) In our opinion and according to the information and explanations given to us and on the basis of books and records as produced before and examined by us, the term loans have been applied for the purposes for which they were raised.

(xii) Based on the audit procedure performed and the representations obtained from the management, no case of fraud on or by the Company has been noticed or reported during the course of our audit.

For Thar & Co., Chartered Accountants Firm Registration No: 110958W

Jayesh R. Thar Partner Membership No. 032917

Place : Mumbai Date : May 15, 2015






Mar 31, 2014

We have audited the accompanying Financial Statements of Housing Development and Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, 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 Company''s 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 Section 211(3C) of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 aforesaid 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 31st March, 2014;

b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows of the Company 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 Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. 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, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e) On the basis of the written representations received from the directors as on 31st March, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date on the financial statements for the year ended on 31st March, 2014 of Housing Development and Infrastructure Limited:

(i) 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) All the Fixed Assets have been physically verified by the management in a phased manner, over a period of one year, which in our opinion, is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its Inventories :

a) The inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) 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 Act:

a) The Company has given loans to its subsidiary Companies. In respect of the said loans the maximum amount outstanding during the year are Rs. 89,897.15 lacs and the year-end balances of such loans are Rs. 88,632.24 in lacs.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

c) No repayment schedule has been specified and repayment has been made on demand, therefore the question of regularity in repayment of principal amount, wherever applicable, does not arise.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

e) The Company has not taken any loans during the year from Companies, firms or other parties covered in the register maintained under Section 301 of the Act. Consequently the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets, sale of units in real estate and services. During the course of audit, we have not observed any continuing failure to correct the major weaknesses in the internal controls.

(v) a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

b) In our opinion and having regard to our comments in paragraph (v)(a) above and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the registered maintained under Section 301 of the Act and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

(vi) The Company has not accepted deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

(vii) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income-tax, Sales Tax, Wealth-tax, Service-tax and other applicable statutory dues with the appropriate authorities except the following dues which were outstanding as at 31st March, 2014 for more than 6 months from the date they became payable –

Nature of dues Rs. in Lacs (Including Interest)

Service Tax 40.79

Value Added Tax (VAT) 320.81

TDS on Works Contract (VAT) 494.90

Income Tax Deducted at Source (TDS) 289.65

b) In our opinion and according to the information and explanations given to us by the management, there are no disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities, except for Income-tax demand of Rs. 25,772.37 lacs pertaining to the financial year 2010-11, for which the Company is in appeal before the Commissioner of Income Tax (CIT) Appeal, Mumbai. Against the said demand, the Company has filed the stay application which has been granted.

(x) 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 the audit and in the immediately preceding financial year.

(xi) As per the information and explanations furnished to us and our verification of records of the Company, the Company has delayed repayment of dues to Debenture Holders, Financial Institutions and Banks. An amount of Rs. 25,204.00 lacs towards principal and Rs. 4,636.20 lacs towards interest to Non-Cumulative Debenture Holders, Rs. 1,028.67 lacs towards interest on Term Loans from Financial Institutions and Rs. 2,875.40 lacs towards principal and Rs. 2,427.49 lacs towards interest on Term Loans from Banks are due as at the year end.

(xii) Based on our examination of records 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 or other securities.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) 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 the shares of subsidiaries and other body corporates for which proper records have been maintained and timely entries have been made therein. The said investments are held in Company''s own name.

(xv) The Company has given guarantees for loans taken by subsidiary Companies, from banks and financial institutions. According to the information and explanations given to us, the terms and conditions of the aforesaid guarantees are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of books and records as produced before and examined by us, the term loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us, and on overall examination of the Balance Sheet of the Company, we are of opinion that there are no funds raised on short-term basis that have been used for long-term Investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the register maintained u/s. 301 of the Act. Therefore, the provisions of paragraph 4(xviii) of the Order, are not applicable to the Company.

(xix) In our opinion and according to the information and explanations given to us, the Company has created securities or charges in respect of the debentures issued.

(xx) The Company has not raised money by way of public issue during the year. Hence, the clause 4(xx) of the Order is not applicable to the Company.

(xxi) Based on the audit procedure performed and the representations obtained from the management, no case of fraud on or by the Company has been noticed or reported during the course of our audit.

For Thar & Co.,

Chartered Accountants

Firm Registration No: 110958W

Jayesh R. Thar

Partner

Membership No. 032917

Place : Mumbai Date : May 23, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of Housing Development and Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, 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

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 principles generally accepted in India including Accounting Standards referred to in Section 211(3C) 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 misstatements.

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 aforesaid 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 31 st March, 2013;

b) In the case of the Statement of Profit and Loss, of the profit 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

We draw attention to:

Reference is drawn to Note No. 22 of the Notes on Financial Statements regarding writing off of exceptional item of Rs. 44,198.45 lacs from the statement of Profit and Loss. The Company has received a notice of termination of its agreement with Mumbai International Airport Limited (MIAL) for its Slum Rehabilitation project citing unsubstantiated charges. As a conservative accounting practices, an amount of Rs. 44,198.45 lacs being unrealized cost pertaining to the project has been written off during the year. The Company has challenged the said termination and as advised by their legal counsels have initiated legal remedies available to it. Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. 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, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act;

e) On the basis of the written representations received from the directors as on 31st March, 2013, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Act.

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date on the financial statements for the year ended on 31st March, 2013 of Housing Development and Infrastructure Limited:

1. 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 have been physically verified by the management during the year in accordance with a phased program of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) The Fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. In respect of its Inventories:

a) The inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

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 Act.

a) The Company has given loans to its ten subsidiary companies. In respect of the said loans, the maximum amount outstanding during the year is Rs. 89,704.30 lacs and the year-end balances of such loans are Rs. 79,624.99 lacs.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

c) No repayment schedule has been specified and repayment has been made on demand, therefore the question of regularity in repayment of principal amount, wherever applicable, does not arise.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

e) The Company has not taken any loans from such parties.

4. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regards to purchase of inventories, fixed assets, sale of units and services. During the course of audit, we have not observed any continuing failure to correct the major weaknesses in the internal controls.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

b) In our opinion and having regard to our comments in paragraph 5(a) above and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the registered maintained under Section 301 of the Act and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. The Company has not accepted deposits from the public within the meaning of Sections 58A and 58AA and the rules framed there under. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. a) According to the information and explanations given to us the Company is regular in depositing undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income-tax, Sales Tax, Wealth-tax, Service-tax and other applicable statutory dues with the appropriate authorities except the following dues were outstanding for more than 6 months from the date they became payable -

Nature of Dues Rs.in Lacs

Service Tax 71.21

Value Added Tax (VAT) 582.11

TDS on Works Contract Tax (WCT) 239.43

Income Tax Deducted at Source (TDS) 198.73

Wealth Tax (WT) 6.21

b) In our opinion and according to the information and explanations given to us by the management, there are no disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities, except for Income-tax demand of Rs. 30,287.42 lacs pertaining to the financial years 2005-06 to 2009-10, for which the Company is in appeal before the Income-tax Appellate Tribunal (ITAT), Mumbai. Against the said demand, the Company has paid a sum ofRs. 6,253.16 lacs under protest.

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash loss during the financial year or in the immediately preceding financial year.

11. In our opinion and according to the information, explanations and representation given to us by the management, during the year, the Company has repaid dues of Rs. 71,783.14 lacs including principal and interest, to Banks, Financial Institutions and Debenture-holders beyond the stipulated date and as at 31st March, 2013, the following amounts are overdue -

Particulars Rs.in Lacs (including Interest)

Term Loans due to Banks 28,183.84

Term loans due to Financial Institutions 8,279.38

Non-convertible Debentures 26,722.34

12. Based on our examination of records 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 or other securities.

13. In our opinion, the Company is not a Chit Fund or a Nidhi/ Mutual Benefit Fund/ Society. Accordingly, 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 the shares of subsidiaries, other body corporate and units of mutual funds for which proper records have been maintained and timely entries have been made therein. The said investments are held in Company''s own name.

15. The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, the terms and conditions of the aforesaid guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us and on the basis of books and records as produced before and examined by us, the term loans have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us, and on overall examination of the Balance Sheet of the Company, we are of opinion that there are no funds raised on short-term basis that have been used for long-term Investments.

18. The Company has not made any preferential allotment of shares to parties covered in the registered maintained u/s. 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanations given to us, the Company has created securities or charges in respect of the debentures issued.

20. The Company has not raised money by way of Public issue during the year. Hence, the Clause 4(xx) of the Order is not applicable to the Company.

21. Based on the audit procedure performed and the representation obtained from the management, no case of fraud on or by the Company has been noticed or reported during the course of our audit.

For THAR & CO.

Chartered Accountants

Firm Registration No. 110958W

Jayesh R. Thar

(Partner)

ICAI Membership No. 032917

Place: Mumbai

Date: 29th May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED as at 31st March, 2012 together with Statement of Profit and Loss 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 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.

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, we enclose 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, proper books of account as required by law have been kept by the Company, so far as appears from our examination of the 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 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 directors of the Company as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as 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 and

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and 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, 2012,

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2012 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 periodically 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.

(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.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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 the physical verification of inventories as compared to the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of account.

3. In respect of the loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has granted loans to it's ten subsidiary companies. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs 1,02,960.44 lacs and the year end balance is Rs 75,618.68 lacs.

(b) In our opinion, the rate of interest and the terms and conditions of the aforesaid loans are, prima facie, non-prejudicial to the interest of the Company.

(c) In respect of the loans granted by the Company, the same are 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 Companies Act, 1956, hence paragraphs 4 (iii) (f) and (g) of the Order are not applicable.

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 inventory and fixed assets and for the sale of units in real estate and for sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, 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 such contracts or arrangements, 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 at the relevant time.

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 Sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

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, Customs duty Excise duty and other material statutory dues which were outstanding as at 31st March, 2012 for the period of six months from the date they became payable, other than Tax Deducted at Source on Works Contract Under Section 31 (1) (b) (i) of the Maharashtra Value Added Tax Act, 2002 of Rs 83.88 lacs, Service Tax of Rs 1,162.10 lacs and Maharashtra Value Added Tax Under Section 4 of the Maharashtra Value Added Tax Act, 2002 of Rs 647.80 lacs.

(c) According to the information and explanations given to us by the management there are no dues of Wealth tax, Sales tax, Service tax, Customs duty and Excise duty, which have not been deposited on account of any dispute, except Income tax demand of Rs 34,114/- lacs for the Assessment Year 2005-06 to 2010-11 for which the Company is in appeal before Commissioner of Income Tax (Appeal) - 41, Mumbai.

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. Accordingly paragraph 4 (x) of the Order is not applicable.

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 According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, 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.

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 investments are held in company's own name except as permissible under Section 49 of the Companies Act, 1956.

15. According to the information and explanations given by the management, the Company has not given guarantee for loans taken by others from banks and financial institutions.

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.

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, except, 2,60,00,000 Share Warrants of Rs 275/- each have been alloted to one of the Promoter, with due consent of the members and relevant authorities, which entitles for conversion of each warrant into one equity share of Rs 10/- each at a premium of Rs 265/- within a period of 18 months from the date of allotment. 40,00,000 warrants have been converted into equity shares of the Company in the current year. The prices at which such shares are allotted are not prima facie prejudicial to the interests of the Company.

19. According to the information and explanations given to us and the records examined by us, the Company has created security or charges in respect of the debentures issued.

20. 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

Firm Registration No. 110958W

Jayesh R. Thar

(Proprietor)

Membership No. 032917

Place: Mumbai

Date: 30th May, 2012


Mar 31, 2011

1. We have audited the attached balance sheet of HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED as at 31st March, 2011 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 Companys 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 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.

3. As required by the Companies (Auditors 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, we enclose 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, proper books of account as required by law have been kept by the Company, so far as appears from our examination of the 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 directors of the Company as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 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 give the information required by the Comapnies 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 on 31st March, 2011,

(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 the Cash Flow Statement, of the cash flow 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, 2011 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 periodically 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.

(c) During the year, due to the fire, ex tensive damage had occurred to the substantial part of the fixed assets, these fixed assets were fully insured. According to the information and explanations given to us, we are of the opinion that the damage by fire to the fixed assets has not affected the going concern status of the Company.

2. (a) As explained to us, the physical verification of the inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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 the physical verification of inventories as compared to the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of account.

3. In respect of the loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has granted loans to its ten subsidaries companies. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 97,380.42 lacs and the year end balance is Rs. 97,380.42 lacs.

(b) In our opinion, the rate of interest and the terms and conditions of the aforesaid loans are, prima facie non prejudicial to the interest of the Company.

(c) In respect of the loans granted by the Company, the same are 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 Companies Act, 1956, hence paragraphs 4 (iii) (f) and (g) of the Order are not applicable.

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 inventory 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) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, 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 such contracts or arrangements, entered into the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

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. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

8. 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, for any of its products or services rendered by the Company. Accordingly paragraph 4 (viii) of the order is not applicable.

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, 2011 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. Accordingly paragraph 4 (x) of the Order is not applicable.

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. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, 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.

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 investments are held in companys own name except as permissible under Section 49 of the Companies Act, 1956.

15. According to the information and explanations given by the management, the Company has given guarantee for loans taken by others from banks and financial institutions as mentioned in Note B-9 (d) of Schedule V. The guarantees outstanding as at year end are for subsidiary company, and the terms and conditions thereof, according to the information and explanations given to us, are prima facie not prejudicial to the interest of the Company.

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.

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, except,

(a) During the year, 1,30,00,000 share warrants were converted into one equity share of Rs. 10/- each at a premium of Rs. 230/- per share, out of balance warrants issued in previous year to one of the promoter of the Company.

(b) During the year, Company has issued 2,60,00,000 convertible warrants to one of the promoter of the Company at Rs. 275/- per warrant which is to be converted into one equity share each on preferential basis. The price at which the shares/warrants issued during the year is not prejudicial to the interest of the Company.

19. According to the information and explanations given to us and the records examined by us, the Company has created security or charges in respect of the debentures issued.

20. During the year, Company has allotted 4,31,61,310 equity shares of Rs. 10/- each at premium of Rs. 258.18 each on private placement basis aggregating to Rs. 1,15,750 lacs to Qualified Institutional Buyers and the proceeds of the same have been utilised for the objects of the issue.

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

Firm Registration No. 110958W

Jayesh R. Thar

(Proprietor)

Membership No. 032917

Place: Mumbai

Date: 27th May, 2011






Mar 31, 2010

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED, as at 31st March, 2010 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 Companys 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 (Auditors 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, we enclose 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, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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 and

(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 Comapnies 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 on 31st March, 2010,

(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, 2010 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 periodically 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.

(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, inventory has been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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 by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has granted loans to nine companies. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 75,252.11 Lacs and the year end balance is Rs. 73,594.02 Lacs.

(b) In our opinion, the rate of interest and the terms and conditions of the aforesaid loans are, prima facie non prejudicial to the interest of the Company.

(c) In respect of the loans granted by the Company, the same are 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 Companies Act, 1956, hence paragraphs 4 (iii) (f) and (g) of the Order are not applicable.

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 inventory 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) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or

arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, 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 such contracts or arrangements, entered into the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

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. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

8. 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, for any of its products or services rendered by the Company. Accordingly paragraph 4 (viii) of the order is not applicable.

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, 2010 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. Accordingly paragraph 4 (x) of the Order is not applicable.

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. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, 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.

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 companys own name except as permissible under Section 49 of the Companies Act, 1956.

15. According to the information and explanations given by the management, the Company has given guarantee for loans taken by others from banks and financial institutions as mentioned in Note 8 (d) of Schedule W. The guarantees outstanding as at year end are for subsidiary company, and the terms and conditions thereof, according to the information and explanations given to us, are prima facie not prejudicial to the interest of the Company.

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, except 2,60,00,000 share warrants allotted to one of the promoter, out of these, 1,30,00,000 share warrants have been converted into equity shares of Rs. 10/- each at premium of Rs. 230/-each.

19. According to the information and explanations given to us and the records examined by us, the Company has created security or charges in respect of the debentures issued.

20. The Company has allotted to QIB 7,03,50,000 equity shares of Rs. 10/- each at premium of Rs. 230/- each on private placement basis aggregating to Rs. 16,88,40,00,000/- and the proceeds of the same have been utilised for the objects of the issue and the same has been verified by us.

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

Firm Registration No.: 110958W

Jayesh R. Thar

(Proprietor) Membership No. 032917

Place: Mumbai

Date: 28th May, 2010

 
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