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