We have audited the attached Balance Sheet of M/s. HB ESTATE DEVELOPERS
 LIMITED as at 31st March, 2011 and also the Profit and Loss Account and
 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.
 
 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 from material misstatements. An audit also includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statement presentation. An audit also
 includes assessing the accounting principles used and significant
 estimates made by management, as well as evaluating the overall
 financial statement presentation. We believe that our audit provides a
 reasonable basis for our opinion.
 
 1.  As required by Companies (Auditor''s Report) Order, 2003(as amended)
 issued by the Central Government of India in terms of section 227 (4A)
 of the Companies Act, 1956, we annex hereto a statement on the matters
 specified in paragraphs 4 and 5 of the said order to the extent
 applicable.
 
 2.  Further to our comments in the Annexure referred to in paragraph 1
 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 said
 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 & Loss Account and Cash
 Flow Statement comply with the accounting Standards referred to in Sub
 Section (3C) of section 211 of the Companies Act, 1956.
 
 e) As informed and explained to us, none of the directors of the
 company is disqualified as on 31st March, 2011 from being appointed as
 director in terms of clause (g) of sub-section (1) of Section 274 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 read together with
 significant accounting policies and notes thereon (Particularly Note
 No.3 and Note No.17(d) ) 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
 :- 
 
 a) In the case of the Balance Sheet of the State of Affairs of the
 Company as at 31st March, 2011 and
 
 b) In the case of the Profit & Loss account of the Profit for the year
 ended on that date and
 
 c) In the case of Cash Flow Statement, of the Cash Flow for the year
 ended on that date.
 
 Annexure to Auditors'' Report Re: HB Estate Developers Ltd.
 Referred to in Paragraph 1 of our report of even date
 
 1.  a.  The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b.  As explained to us, the fixed assets have been physically verified
 by the management during the year in a phased periodical manner, 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 physical verification
 
 c.  In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year that would affect going concern status of
 the Company.
 
 2.  a.  As explained to us, inventories have been physically verified
 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 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 has maintained proper records of inventories. As
 explained to us, no material discrepancies have been noticed on
 physical verification of inventory as compared to the book records.
 
 3.  In respect of the loans, secured or unsecured, granted/taken by the
 company to/from companies, firms or other parties covered in the
 Register maintained u/s 301 of the Companies Act, 1956, according to
 the information and explanations given to us:
 
 (i) The company has not granted any loans, secured or unsecured during
 the year to the companies, firm or other parties covered in the
 register mentioned u/s 301 of the Companies Act 1956.  
 
 (ii) (a) The Company had taken loan aggregating to Rs 9,00,00,000/- in
 earlier years from one Company covered in the register maintained under
 section 301 of the Companies Act ,1956 and the maximum amount involved
 during the year and the year end balances of the loan taken from such
 company was Rs 9,00,00,000/-.  
 
 (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 payment of principal amounts and interest in respect of such
 loans are regular/ as per stipulations.
 
 4.  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
 purchases of inventory and fixed assets and sale of goods & services.
 During the course of our audit, we have neither come across nor we have
 been informed of any instance of major weakness in the aforesaid
 internal control system.
 
 5.  a.  In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 have been entered
 into in the register required to be maintained under that section.  
 
 b.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to the market price prevailing at the relevant time..
 
 6.  The Company has not accepted any deposits from the public.
 
 7.  In our opinion the internal audit system of the Company is
 commensurate with its size and nature of its business.
 
 8.  The nature of the company''s business/activities is such that Clause
 4(viii) of the Companies (Auditor''s Report) Order 2003 regarding
 maintenance of Cost Records is not applicable to the company.
 
 9 a.  According to the records of the Company and according to the
 information and explanation given to us, undisputed statutory dues
 including Provident Fund, Income Tax, Wealth Tax, Service Tax, Excise
 duty, Custom duty , Cess and other material statutory dues as
 applicable have been generally regularly deposited by the company
 during the period with the appropriate authorities except for non
 deposit of instalments of advance tax. No undisputed amounts payable in
 respect of the aforesaid dues were outstanding as at 31st march, 2011
 for a period of more than six months from the date of becoming payable
 except for non deposit of advance tax instalments of Rs 26,00,000/-for
 June & September,2010 quarters.  
 
 b.  According to the records of the company, the disputed statutory
 dues that have not been deposited on account of the matters pending
 before appropriate authorities as on 31st March,2011 are as under:- 
 
 (i) property tax demand of Rs.67,36,724/- against which the company had
 filed Writ Petition before Hon''ble Delhi High Court and the company had
 been granted stay by the Hon''ble Court from the payment of said amount
 and the hon''ble court has directed the MCD to recompute the tax (refer
 note no.2(a) of Schedule 11).,
 
 (ii) Income tax demand of Rs.94,816 for A.Y.2006-07, Rs.8,55,290/- for
 A.Y.2007- 08 and Rs.5,69,528/- for A.Y.2008-09 for which the company is
 in Appeal before Commissioner of Income Tax ( Appeal); 
 
 (iii) Ground Rent as explained in note no.3 of schedule 11.
 
 10.  The company has no accumulated losses at the end of financial year
 and it has not incurred cash losses during the financial year covered
 by our audit or in the immediately preceding financial year.
 
 11.  Based on our audit procedures and according to the information and
 explanation given to us, we are of the opinion that the Company has not
 defaulted in repayment of dues to financial institutions, banks or
 debenture holders.
 
 12.  In our opinion and according to the information and explanation
 given to us, no loans and advances have been granted by the Company 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, clause 4(xiii) of the Companies
 (Auditor''s Report) order 2003 is not applicable to the company.
 
 14.  The Company is neither dealing nor trading in shares, securities,
 debentures and other investments therefore clause 4(xiv) of the
 Companies (Auditor''s Report) order 2003 is not applicable to the
 company In respect of Investments in shares the company has maintained
 proper records of transactions and contracts in respect thereto and
 timely entries have been made therein. All shares and securities have
 been held by the Company in its own name.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 16.  On the basis of review of utilisation of funds pertaining to term
 loans on and overall basis and related information and explanation made
 available to us, the term loans taken by the company have been utilised
 for the purpose for which they were taken.
 
 17.  According to the information and explanations given to us, we are
 of the opinion that loans amounting to Rs.22.92 crores in the nature of
 overdraft facility have prima facie been used for long term investment
 purposes. i.e. for deployment for capital work in progress in the
 earlier years..
 
 18.  During the year, 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.  No debentures have been issued by the company and hence the
 question of creating securities or charge in respect thereof does not
 arise.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  In our opinion and according to the information and explanation
 given to us, no fraud on or by the Company has been noticed or reported
 during the year.
 
 
                                              For P. BHOLUSARIA & CO.
                                                Chartered Accountants
                                        Firm Registration No. 000468N
 
                                                            AMIT GOEL
                                                              PARTNER
                                                       (M. No. 92648)
 
 Place : Gurgaon 
 Date  : 19.05.2011