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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Housing Development Finance Corporation Ltd. இன் முடிவுகள்

Mar 31, 2022

Housing Development Finance Corporation Limited

Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors'' responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of Housing Development Finance Corporation Limited (âthe Corporation"), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013, as amended (âthe 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 Corporation as at March 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (âSAs"), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditors'' Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Corporation in accordance with the ''Code of Ethics'' issued by the

Key audit matter	How our audit addressed the key audit matter
1. 1 mpairment of loans (expected credit losses) (refer note 3.2.5, note 3.2.6 and note 9 to the standalone financial statements)
Indian Accounting Standard (Ind AS) 109 Financial Instruments requires the Corporation to provide for impairment of its loans using the expected credit loss (ECL) approach. ECL involves an estimation of probability weighted loss on financial instruments over their life, considering reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions and other factors which could impact the credit quality of the Corporation''s loans.	â¢ Read and assessed the Corporation''s accounting policies for impairment of financial assets considering the requirements of Ind AS 109 and the governance framework approved by the Board of Directors pursuant to Reserve Bank of India guidelines issued on March 13, 2020.

Key audit matter

How our audit addressed the key audit matter

In the process, a significant degree of judgement and estimates have been applied by the management for:

â¢ Staging of loans (i.e. classification in ''significant increase in credit risk'' (''SICR'') and ''default'' categories) based on past due status or qualitative assessment;

â¢ Grouping of borrowers (retail loan portfolio) based on homogeneity for estimating probability of default (''PD''), loss given default (''LGD'') and exposure at default (''EAD'') on a collective basis;

â¢ Estimation of PD, LGD and EAD for non-retail loan portfolio based on historical default experience and individual assessment, wherever necessary, of the borrower specific cash-flows, security and other relevant factors;

â¢ Estimation of losses for loan products with no/ minimal historical defaults;

â¢ Determining macro-economic and other factors impacting credit quality of loans.

The Corporation has also recorded a management overlay as part of its ECL, to reflect among other things an increased risk of deterioration in macro-economic factors caused by the COVID-19 pandemic. Given the unique nature and scale of the economic impact of this pandemic, the management overlay is based on various uncertain variables, which could result in actual credit loss being different than that being estimated.

In view of the high degree of management''s judgement involved in estimation of ECL and the overall significance of the impairment loss allowance to the standalone financial statements, it is considered as a key audit matter.

â¢ Evaluated the management estimates by understanding the process of ECL estimation and related assumptions and tested the controls around data extraction, validation and computation.

â¢ Assessed the criteria for staging of loans based on their past due status as per the requirements of Ind AS 109. Tested a sample of performing loans to assess whether any SICR or loss indicators were present requiring them to be classified under higher stages.

â¢ Involved internal experts for testing of the ECL model and computation, including factors that affect the PD, LGD and EAD considering various forward looking, micro and macro-economic factors. Involved internal valuation experts for testing the valuation of the underlying security for the non-retail loan portfolio.

â¢ Tested assumptions used by the management in determining the overlay for macro-economic and other factors.

â¢ Assessed disclosures included in the standalone financial statements in respect of expected credit losses.

2. Valuation of Derivatives Instruments and Hedge Accounting (Refer to the accounting policies in Note 3.2.11 to the standalone financial statements: Derivative financial instruments; Note 7 to the standalone financial statements: Derivative financial instruments and Note 43.6 to the standalone financial statements - Foreign currency risk)

The Corporation enters into derivative financial instruments for risk management purposes. The identified risks in relation to the borrowings are foreign exchange rate risk and interest risk. The Corporation enters into cash flow hedges or fair value hedges depending on the risk being hedged.

Derivative and Hedge accounting is considered as a key audit matter, because of its significance to the operations and complexity involved in applying formal and technical requirements to the hedge accounting and also in valuing hedge instruments.

â¢ Understood the risk management policies and procedures adopted by the Corporation and also obtained understanding about the accounting treatment of such transactions.

â¢ Evaluated the design and operating effectiveness of controls over accounting of derivative transactions and controls over designating hedging relationship including authorization and related documentation.

â¢ Obtained understanding of ongoing monitoring and tested hedge effectiveness.

Key audit matter	How our audit addressed the key audit matter
	â¢ Tested qualifying criteria for hedge accounting and also checked that the valuation of derivative instruments is in accordance with Ind AS 109. â¢ Verified hedge documentation on sample basis. â¢ Reviewed valuation reports obtained from experts to assess whether the assumptions used are in line with market practice. â¢ Tested reconciliation of derivative instruments with independent confirmations obtained at the year-end. â¢ Considered the appropriateness of disclosures made in the standalone financial statements relating to financial risk management, derivative financial instruments and hedge accounting.
3. IT systems and controls
The financial accounting and reporting systems of the Corporation are fundamentally reliant on IT systems and IT controls to process significant transaction volumes. Automated accounting procedures and IT environment controls, which include IT governance, general IT controls over program development and changes, access to programs and data and IT operations, are required to be designed and to operate effectively to ensure accurate financial reporting. Any gaps in the IT control environment could result in a material misstatement of the financial accounting and reporting records. Therefore, due to the pervasive nature and complexity of the IT environment, the assessment of the general IT controls and the application controls specific to the accounting and preparation of the financial information is considered to be a key audit matter.	â¢ The aspects covered in the assessment of IT General Controls comprised: (i) User Access Management; (ii) Program Change Management; (iii) Other related ITGCs - to understand the design and test the operating effectiveness of such controls in respect of information systems that are important to financial reporting (âinscope applications"). â¢ Tested the changes that were made to the in-scope applications during the audit period to assess changes that have impact on financial reporting. â¢ Tested the periodic review of access rights, inspected requests of changes to systems for appropriate approval and authorization. â¢ Performed tests of controls (including other compensatory controls, wherever applicable) on the IT application controls and IT dependent manual controls in the system. â¢ Tested the design and operating effectiveness of compensating controls, where deficiencies were identified and, where necessary, extended the scope of our substantive audit procedures.

Other Information

The Corporation''s Board of Directors is responsible for the other information. The other information comprises the information included in the Director''s report and Management Discussion & Analysis (MD&A) report, but does not include the standalone financial statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Corporation''s Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Corporation in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Corporation 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 the 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Corporation''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Corporation''s financial reporting process.

Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements

level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Corporation has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may

cause the Corporation to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

The standalone financial statements of the Corporation for the year ended March 31, 2021, included in these standalone financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those standalone financial statements on May 7, 2021.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1" a statement on the matters specified in paragraphs 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 Corporation so far as it appears from our examination of those books;

(c) A he Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2" to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid/ provided by the Corporation to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on its financial position

in its standalone financial statements -Refer Note 40 to the standalone financial statements;

ii. The Corporation 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 -Refer Note 7 to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Corporation during the year ended March 31, 2022. Whilst the Corporation transferred the unclaimed dividend, 2,371 underlying equity shares relating to such unclaimed dividend could not be transferred as the depository participant confirmed to the Corporation that the aforesaid equity shares were not available in the demat accounts of the respective shareholders;

iv. a) The management has represented

that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Corporation to or in any other person(s) or entity(ies), including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Corporation (âUltimate

Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Corporation from any person(s) or entity(ies), including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Corporation shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement; and

v. T he final dividend paid by the Corporation during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act, to the extent it applies to payment of dividend.

As stated in Note 26.9 to the standalone financial statements, the Board of Directors of the Corporation has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act, to the extent it applies to declaration of dividend.

Mar 31, 2021

TO THE MEMBERS OF

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

The information required by the Companies Act, 2013 (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 Corporation as at 31 March 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (''SAs'') specified under Section 143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the audit of the standalone financial statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together

Report on the audit of the standalone financial statements

Opinion

We have audited the standalone financial statements of Housing Development Finance Corporation Limited (the ''Corporation''), which comprise the Standalone Balance Sheet as at 31 March 2021, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give

with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matters
Key audit matter	How the matter was addressed in our audit
Impairment of loans to customers, including off balance sheet elements Refer to the accounting policies in Note 3.2.5 the standalone financial statements: Impairment and write off; Note 3.2.6 to the standalone financial statements: Determination of Expected Credit Loss; and Note 9 to the standalone financial statements: Loans
Subjective estimate	Our key audit procedures included:
Recognition and measurement of impairment of loans involve significant management judgement. The Corporation has recorded an impairment loss allowance of '' 13,003.77 Crores as at 31 March 2021 ('' 10,959.48 Crores as at 31 March 2020) and has recognized a charge of '' 2,948.26 Crores for the year ended 31 March 2021 (charge of '' 5,907.67 Crores for the year ended 31 March 2020) in its statement of profit and loss.	Design / controls We performed end to end process walkthroughs to identify the key systems, applications and controls used in the ECL processes. We tested the relevant manual (including spreadsheet controls), general IT and application controls over key systems used in the ECL process.

Key audit matter

How the matter was addressed in our audit

Under Ind AS 109, Financial Instruments, allowance for loan losses are determined using expected credit loss (ECL) estimation model. The estimation of ECL on financial instruments involves significant judgement and estimates. The key areas where we identified greater levels of management judgement and therefore increased levels of audit focus in the Corporation''s estimation of ECL are:

â¢ Data inputs - The application of ECL model requires several data inputs. This increases the risk that the data that has been used to derive assumptions in the model, which are used for ECL calculations, may not be complete and accurate.

â¢ Model estimations - Inherently judgmental models are used to estimate ECL which involves determining Exposures at Default (âEADâ), Probabilities of Default (âPDâ) and Loss Given Default. The PD and the LGD are the key drivers of estimation complexity in the ECL and as a result are considered as a significant judgmental aspect of the Corporation''s modelling approach.

â¢ Economic scenarios - Ind AS 109 requires the Corporation to measure ECLs on an unbiased forwardlooking basis reflecting a range of future economic conditions. Significant management judgement is applied in determining the economic scenarios used and the probability weights applied to them especially when considering the current uncertain economic environment arising from COVID-19.

â¢ Restructuring - the determination of whether any rescheduling of principal / interest to a borrower (including under regulations / a regulatory directive) results in a ''restructuring'' conclusion under Ind AS is subject to interpretation / judgment. The outcome of this assessment impacts the staging conclusion of the loans, which in turn determines the amount of ECL provision which needs to be recorded.

â¢ Determination of ECL on non-homogeneous loans involves assessment of borrower specific cash flows/ collateral value determination, which requires significant management estimation and judgment.

Key aspects of our controls testing involved the following:

â¢ Testing the design and operating effectiveness of the key controls over the completeness and accuracy of the key inputs, data and assumptions into the Ind AS 109 impairment model.

â¢ Testing the design and operating effectiveness of the key controls over the application of the staging criteria.

â¢ Testing key controls relating to selection and implementation of material macro-economic variables and the controls over the scenario selection and application of probability weights.

â¢ For specifically assessed non-homogeneous loans, testing controls over the monitoring of the credit watch list, approval of external collateral valuation vendors and review controls over the approval and computation of significant impairments.

â¢ Testing management''s controls over authorisation and calculation of post model adjustments and management overlays.

â¢ Testing the ''Governance Framework'' controls over validation, implementation and model monitoring.

â¢ Testing management''s controls on compliance with Ind AS 109 disclosures related to ECL.

â¢ Testing key controls operating over the information technology system in relation to loan impairment, including system access and system change management, program development and computer operations.

Test of details

Key aspects of our testing included:

â¢ Sample testing over key inputs, data and assumptions impacting ECL calculations to assess the completeness, accuracy and relevance of data and reasonableness of economic forecasts, weights, and model assumptions applied.

â¢ Model calculations testing through re-performance, where possible.

Key audit matter

How the matter was addressed in our audit

â¢ Qualitative adjustments - Adjustments to the model-driven ECL results are recorded by management to address known impairment model limitations or emerging trends as well as risks not captured by models. These adjustments are inherently uncertain and significant management judgement is involved in estimating these amounts, especially in relation to economic uncertainty as a result of COVID-19.

The underlying forecasts and assumptions used in the estimates of impairment loss allowance are subject to uncertainties which are often outside the control of the Corporation. The extent to which the COVID-19 pandemic will impact the Corporation''s current estimate of impairment loss allowances is dependent on future developments, which are uncertain at this point. Given the size of loan portfolio relative to the balance sheet and the impact of impairment allowance on the financial statements, we have considered this as a key audit matter.

The effect of these matters is that, as part of our risk assessment, we determined that the impairment of loans to customers, including off balance sheet elements, has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount.

Disclosures

The disclosures regarding the Corporation''s application of Ind AS 109 are key to explaining the key judgements and material inputs to the Ind AS 109 ECL results. Further, disclosures to be provided as per circulars issued by the regulator with regards to non-performing assets and provisions will also be an area of focus, particularly as this will be the first year some of these disclosures will be presented and are related to an area of significant estimate.

â¢ Test of details of post model adjustments, considering the size and complexity of management overlays with a focus on COVID-19 related overlays, in order to assess the reasonableness of the adjustments by challenging key assumptions, inspecting the calculation methodology and tracing a sample of the data used back to source data

â¢ Assessing disclosures - assessing whether the disclosures appropriately disclose and address the requirements of Ind AS 109. Testing whether the disclosures are in accordance with the requirements of the circulars issued by the regulators.

Involvement of specialists - we involved financial risk

modelling specialists for the following:

â¢ Evaluating the appropriateness of the Corporation''s Ind AS 109 impairment methodologies and reasonableness of assumptions used (including management overlays).

â¢ For models refresh undertaken during the year, evaluating whether the refresh was appropriate by assessing the updated model / methodology.

â¢ The reasonableness of the Corporation''s considerations of the impact of the current economic environment due to COVID-19 on the ECL determination.

Valuation of Derivatives Instruments and Hedge Accounting

Refer to the accounting policies in Note 3.2.11 to the standalone financial statements: Derivative financial instruments; Note 7 to the standalone financial statements: Derivative financial instruments and Note 44.6 to the standalone financial statements- Foreign currency risk

(Fair value of '' 2,154 Crores and notional value of '' 118,269 Crores)

Key audit matter

How the matter was addressed in our audit

The Corporation enters into derivative contracts in order to manage and hedge risks such as foreign exchange rate risk and interest rate risk on the borrowings. The Corporation either enters into cash flow hedges or fair value hedges depending on the risk being hedged.

The valuation of derivative instruments and application of hedge accounting and evaluating hedge effectiveness is complex and operationally cumbersome and requires close monitoring from Corporation''s management.

Our key audit procedures included:

Design / controls

â¢ Obtained an understanding of the risk management policies and tested key controls on (i) valuation of derivative instruments (ii) at the time of designation of hedging relationship including authorisation by designated authority; documentation prepared by management at the inception of the hedge transaction; (iii) ongoing monitoring and review of the hedge relationship by management including test of hedge effectiveness.

Substantive tests

â¢ Checked that the valuation of derivative instruments, for selected samples, is as per Ind AS 109;

â¢ Examined hedge documentation, for selected samples, to assess the compliance of documentation with Ind AS 109 requirements;

â¢ Tested for a sample, the reconciliation of derivative instruments to independent confirmations obtained from third party;

â¢ Involved specialists to perform independent valuation and compared the same with the valuation undertaken/ determined by the Corporation;

â¢ For selected samples, compared input data used in the Corporation''s valuation models to independent sources;

â¢ Tested for a sample, the appropriateness of the hedge accounting entries;

â¢ Considered the appropriateness of disclosures in relation to financial risk management, derivative instruments and hedge accounting in the standalone financial statements.

Information technology (âITâ)

IT systems and controls

The Corporation''s key financial accounting and reporting processes are highly dependent on information systems including automated controls in information systems, such that there exists a risk that, gaps in the IT control environment could result in the financial accounting and reporting records being misstated. The Corporation uses several systems for its overall financial reporting.

Our key audit procedures included:

â¢ Understood General IT Control i.e. access controls, program/ system change, program development, computer operations (i.e. job processing, data/ system backup incident management) over key financial accounting and reporting systems, and supporting control systems (referred to as in-scope systems);

â¢ Understood IT infrastructure i.e. operating systems and databases supporting the in-scope systems;

Key audit matter

How the matter was addressed in our audit

In addition, the prevailing COVID 19 situation has caused the required IT systems to be made accessible on a remote basis and at the same time there are ever increasing challenges to protect the integrity of the Corporation''s systems and data.

We identified ''IT systems and controls'' as key audit matter because of the high level of automation, significant number of systems being used by management and the scale and complexity of the IT architecture.

â¢ Test checked the General IT Controls for design and operating effectiveness for the audit period over the in-scope systems.

â¢ Understood IT application controls covering

- user access and roles, segregation of duties, and

- key interfaces and reports.

â¢ Test checked the IT application controls for design and operating effectiveness for the audit period;

â¢ Performed testing to determine that IT application controls that underwent changes, followed the standard change management process;

â¢ Test checked controls over the IT infrastructure covering user access (including privilege users), data center;

â¢ Performed procedures around Cybersecurity and COVID-19 to determine the impact (if any) on financial statements.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managementâs and Board of Directorsâ Responsibility for the Standalone Financial Statements

The Corporation''s management and Board of Directors are responsible for the matters stated in Section 134 (5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Corporation in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the

I nformation Other than the Standalone Financial Statements and Auditorsâ Report Thereon

The Corporation''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Director''s report and Management Discussion & Analysis (MD&A) report, but does not include the standalone financial statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Corporation''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Corporation

or to cease operations, or has no realistic alternative but to do so. Board of Directors is also responsible for overseeing the Corporation''s financial reporting process. Auditorâs responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Corporation has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the Standalone financial statements made by Management and Board of Directors.

â¢ Conclude on the appropriateness of management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the

standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (the ''Order'') issued by the Central Government in terms

such unclaimed dividend could not be transferred as the depository participant confirmed to the Corporation that the aforesaid equity shares were not available in the demat accounts of the respective shareholders; and

iv. the disclosures regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2021.

C. With respect to the matter to be included in the Auditors'' Report under Section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the Corporation to its Directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any Director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No: 101248W/W-100022

SAGAR LAKHANI

Mumbai Partner

07 May 2021 Membership No: 111855 ICAI UDIN: 21111855AAAACQ7395

of Section 143 (11) of the Act, we give in the ''Annexure A'', a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. A. 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 Corporation so far as it appears from our examination of those books;

c) the Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d) in our opinion, the aforesaid sta ndalone financial statements comply with the Ind AS specified under Section 133 of the Act;

e) on the basis of the written representations received from the Directors as on 31 March 2021 and taken on record by the Board of Directors, none of the Directors are disqualified as on 31 March 2021 from being appointed as a Director in terms of Section 164 (2) of the Act; and

f) with respect to the adequacy of the internal financial controls with reference to financial statements of the Corporation and the operating effectiveness of such controls, refer to our separate Report in ''Annexure B''.

B. With respect to the other matters to be included in the Auditors'' 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 Corporation has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer note 40 to the standalone financial statements;

ii. the Corporation has recognised provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer note 7.1 to the standalone financial statements;

iii. there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Corporation during the year ended 31 March 2021. Whilst the Corporation transferred the unclaimed dividend, 2,148 underlying equity shares relating to

Mar 31, 2019

Report on the audit of the standalone financial statements

Opinion

We have audited the standalone financial statements of Housing Development Finance Corporation Limited (the âCorporationâ), which comprise the Standalone Balance Sheet as at 31 March 2019, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements including a summary of the significant accounting policies and other explanatory information.

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 Companies Act, 2013 (the âActâ) 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 Corporation as at 31 March 2019, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (âSAsâ) specified under Section 143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the audit of the standalone financial statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key Audit Matter	How the matter was addressed in our audit
Transition date accounting Refer to the accounting policies in the standalone financial statements: Significant accounting policies -Basis of preparation and Note 4 to the standalone financial statements: âFirst time adoption of Ind ASâ
Adoption of new accounting framework (Ind AS)
Effective 1 April 2018, the Corporation adopted Ind AS notified by the Ministry of Corporate Affairs with the transition date of 1 April 2017. The following are the major impact areas for the Corporation upon transition: - Classification and measurement / valuation of financial instruments: - Determination of Expected Credit Loss (ECL) - Computation of Effective Interest Rate on financial assets and financial liabilities - Gain / loss on assignment of loans - Classification and measurement of investment in Subsidiaries and Associates	We performed audit procedures set out below Design / controls - Assessed the design, implementation and operating effectiveness of key internal controls over managementâs evaluation of transition date choices and exemptions availed in line with the Ind AS 101. Substantive tests - Evaluated managementâs transition date choices and exemptions for compliance / acceptability under Ind AS 101; - Understood the approach and methodology adopted by management to implement the transition to Ind AS;

Key Audit Matter	How the matter was addressed in our audit
- Accounting for employee stock options - Accounting for derivative contracts - Additional disclosures as per the requirements of the new financial reporting framework Transition to the new financial reporting framework is an intricate process involving multiple decision points for management i.e: Ind AS 101, First Time Adoption prescribes choices and exemptions for first time application of Ind AS at the transition date. We identified the transition date accounting as a key audit matter because of the significant degree of management judgement in the first time application of Ind AS principles as at the transition date particularly in the areas noted above and the additional disclosures associated with Ind AS transition.	- Test checked the computations relating to transition adjustments; - Assessed areas of significant estimates and management judgement on transition in line with Ind AS principles ; - Compared the reasonableness of management assumptions in respect of recognition and measurement of financial instruments including determination of ECL provisioning, employee stock options, derivative contracts as at the date of transition etc.
Expected Credit Loss
Refer to the accounting policies in Note 3.2.3 to the standalone financial statements: Impairment and write-off; Note 2.4.1 to the standalone financial statements: use of estimates and judgements - determination of Expected Credit Loss and Note 9 to the standalone financial statements: Loans
Subjective estimate	We performed audit procedures set out below
Recognition and measurement of impairment relating to loans and advances involves significant management judgement. With the applicability of Ind AS 109 credit loss assessment is now based on ECL model. The Corporationâs impairment allowance is computed based on estimates including the historical default and loss ratios. Management exercises judgement in determining the quantum of loss based on a range of factors. The most significant areas are: - Segmentation of loan book - Loan staging criteria - Calculation of probability of default / Loss given default - Consideration of probability weighted scenarios and forward looking macro-economic factors. There is a large increase in the data inputs required for the computation of ECL. This increases the risk of completeness and accuracy of the data that has been used as a basis of assumptions in the model.	Design / controls - Evaluated appropriateness of the impairment principles based on the requirements of Ind AS 109, our business understanding and industry practice; - Understood Corporationâs new / revised processes, systems and controls implemented relating to impairment allowance process including governance controls over the development and implementation of the ECL model; - Test checked the design and implementation of key internal financial controls over loan impairment process used to calculate the impairment charge; - Test checked management review controls over measurement of impairment allowances and disclosures in the standalone financial statements. Substantive tests - Performed substantive procedures over validating completeness and accuracy of the data and reasonableness of assumptions used in the model; - Reperformed calculation of ECL provision on a test check basis; - Critically evaluated managementâs judgement in the determination of ECL;

Key Audit Matter	How the matter was addressed in our audit
	- We engaged our specialists to test the working of the ECL model and reasonableness of assumptions used; - Performed cut off procedures on a sample basis relating to recoveries at year end that would impact staging of loans; - Test checked the basis of collateral valuation in the determination of ECL provision.
Valuation of Derivative Instruments and Hedge Accounting
Refer to the accounting policies in Note 3.2.8 to the standalone financial statements: Derivative financial instruments; Note 7 to the standalone financial statements: Derivative financial instruments and Note 44.6.1 to the standalone financial statements- Foreign currency risk
The Corporation enters into derivative contracts in order to manage and hedge risks such as foreign exchange rate risk and interest rate risk on the borrowings. The Corporation either enters into cash flow hedges or fair value hedges depending on the risk being hedged. The application of hedge accounting and ensuring hedge effectiveness is complex and operationally cumbersome, and requires close monitoring from management.	We performed audit procedures set out below Design / controls - Obtained an understanding of the risk management policies and tested key controls (i) at the time of designation of hedging relationship including authorisation by designated authority; documentation prepared by management at the inception of the hedge transaction; (ii) with regard to ongoing monitoring and review of the hedge relationship by management including test of hedge effectiveness.
	Substantives tests - Checked that the recognition and measurement of derivative instruments, for selected samples, is as per Ind AS 109; - Examined hedge documentation on a sample basis to assess whether the documentation complies with Ind AS 109 requirements; - Test checked on a sample basis reconciliation of derivative instruments to third party confirmations; - Compared input data used in the Corporationâs valuation models to independent sources and externally available market data on a sample basis; - Compared valuation of derivative instruments with market data or results from alternative independent valuation models on a sample basis; - Test checked on a sample basis the applicability and accuracy of hedge accounting; - Considered the appropriateness of disclosures in relation to financial risk management, derivative instruments and hedge accounting in the standalone financial statements.

Key Audit Matter	How the matter was addressed in our audit
Valuation of Investments (other than investments in subsidiaries and associates)
Refer to the accounting policies in Note 3.2 to the standalone financial statements: Financial instruments; Note 2.4.2 to the standalone financial statements: Use of estimates and judgements - fair valuation of investment (other than investment in Subsidiaries and Associates); and Note 10 to the standalone financial statements: Investments
Subjective estimate Evaluation of business model is a subjective matter and impacts the classification of investments upon initial recognition and consequently the measurement of the same. Investments carried at fair value comprise: - Fair value through profit and loss (FVTPL) investments - Rs. 17,525 crore - Fair value through other comprehensive income (FVOCI) investments - Rs. 579 crore The effect of fair value adjustments may impact either the profit or loss or other comprehensive income. The valuation of investments measured at fair value entails significant management estimates and is based on a combination of observable market data and / or valuation techniques which are often based on unobservable inputs. We identified determination of fair value of investments as a key audit matter because of the degree of subjectivity and judgement exercised by management in determining the inputs used in the valuation techniques and methodologies.	We performed audit procedures set out below Design / controls - Test checked the design, implementation and operating effectiveness of managementâs key internal controls over the valuation process and inputs. Substantives tests - Read the investment agreements on a sample basis, to understand the relevant investment terms and identify any conditions that were relevant to the classification and valuation of investments; - Assessed the appropriateness of the valuation methodology and test key inputs used such as pricing inputs and discount factors; - Checked that valuation methodology was consistently followed and critically evaluated any change in valuation technique; - Assessed whether the disclosures appropriately reflected the Corporationâs exposure to investment valuation risk with reference to the requirements of the prevailing accounting standards; - Critically evaluated the reliability of inputs i.e. market observable / unobservable data to determine fair value of investments and checked the appropriateness of disclosures in accordance with Ind AS 107 on âFinancial Instruments: Disclosuresâ.
Information Technology (âITâ) IT systems and controls The Corporationâs key financial accounting and reporting processes are highly dependent on information systems including automated controls in information systems, such that there exists a risk that, gaps in the IT control environment could result in the financial accounting and reporting records being misstated. The Corporation uses several systems for its overall financial reporting. We have identified âIT systems and controlsâ as key audit matter because of the high level automation, significant number of systems being used by the management and the scale and complexity of the IT architecture.	We performed audit procedures set out below - Understood General IT Control i.e. access controls, program/ system change, program development, computer operations (i.e. job processing, data/ system backup incident management) over key financial accounting and reporting systems, and supporting control systems (referred to as in-scope systems); - Understood IT infrastructure i.e. operating systems and databases supporting the in-scope systems; - Test checked the General IT Controls for design and operating effectiveness for the audit period over the in-scope systems; - Understood IT application controls covering

Key Audit Matter	How the matter was addressed in our audit
	- user access and roles, segregation of duties, and
	- key interfaces, reports, reconciliations and system processing;
	- Test checked the IT application controls for design and operating effectiveness for the audit period;
	- Performed testing to determine that these controls remained unchanged during the audit period or were changed following the standard change management process;
	- Test checked controls over the IT infrastructure covering user access (including privilege users), data center and system change (e.g. patches).

Information Other than the Standalone Financial Statements and Auditorsâ Report Thereon

The Corporationâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Directorâs report and Management Discussion & Analysis (MD&A) report, but does not include the standalone financial statements and our auditorâs report thereon. The Directorâs report and MD&A report is expected to be made available to us after the date of this auditorâs report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Managementâs responsibility for the standalone financial statements

The Corporationâs management and Board of Directors are responsible for the matters stated in Section 134 (5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Corporation in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Corporationâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Corporationâs financial reporting process.

Auditorâs responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Corporation has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporationâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other matters

1. The opening balance sheet as at 1 April 2017 (âtransition dateâ) included in these standalone financial statements, is based on the previously issued statutory standalone financial statements of the Corporation prepared in accordance with the applicable Accounting Standards as per section 133 of the Act read with relevant rules thereunder audited by the predecessor auditor whose report for the year ended 31 March 2017 dated 4 May 2017 expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Corporation on transition to Ind AS, which have been audited by us.

2. During the year ended 31 March 2018, Grandeur Properties Private Limited, Haddock Properties Private Limited, Pentagram Properties Private Limited, Winchester Properties Private Limited and Windermere Properties Private Limited (collectively referred to as âTransferor Companiesâ) were amalgamated with the Corporation on 28 March 2018 with the appointed date of 1 April 2016. The transition date balance sheet of the Corporation includes financial information of the aforesaid Transferor Companies, which is based on the financial statements of such Transferor Companies prepared in accordance with the applicable Accounting Standards as per section 133 of the Act read with relevant rules thereunder, audited by the respective auditors of such Transferor Companies whose reports for the year ended 31 March 2017 dated 28 April 2017 respectively expressed unmodified opinions on the respective financial statements, as adjusted for the differences in the accounting principles adopted by the Corporation on transition to Ind AS, which have been audited by us.

3. The comparative financial information for the year ended 31 March 2018 forming part of these standalone financial statements, includes unaudited financial information of Transferor Companies. We did not audit the financial information of the aforesaid Transferor Companies whose financial information reflect total asset of Rs. 99 crores, total revenue of Rs. 30 crores and cashflows of Rs. 15 crores. We have been provided with the financial information of the aforesaid Transferor Companies for the period from 1 April 2017 to 28 March 2018 by management of the Corporation, as adjusted for the differences in the accounting principles adopted by the Corporation on transition to Ind AS, which have been audited by us.

Our opinion on the standalone financial statements is not modified in respect of the above matters.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (the âOrderâ) issued by the Central Government in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

A. 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) i n our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books;

c) the Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) i n our opinion, the aforesaid sta ndalone financial statements comply with the Ind AS specified under Section 133 of the Act;

e) on the basis of the written representations received from the Directors and taken on record by the Board of Directors, none of the Directors are disqualified as on 31 March 2019 from being appointed as a Director in terms of Section 164 (2) of the Act; and

B. With respect to the other matters to be included in the Auditorâs 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 Corporation has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer note 40 to the standalone financial statements;

iii. there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Corporation. Whilst the Corporation transferred the unclaimed dividend, 12 underlying equity shares relating to such unclaimed dividend could not be transferred as the depository participant informed that the aforesaid equity shares were not available in the demat accounts of the respective shareholders; and

iv. the disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2019.

C. With respect to the matter to be included in the Auditorâs Report under Section 197(16):

I n our opinion and according to the information and explanations given to us, the remuneration paid by the Corporation to its Directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any Director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

Annexure âAâ to the Independent Auditorâs Report - 31 March 2019

(Referred to in our report of even date)

i. (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) The Corporation has a regular programme of physical verification of property, plant and equipment by which property, plant and equipment are verified annually. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Corporation and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and based on test check examination of the records and registered sale deed / transfer deed / conveyance deed provided to us, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Corporation as at the balance sheet date, except the following shown as properties under the head of Investment properties:

Particulars of land and building		Rs. in crore	Remarks
Freehold land and buildings (Two properties)	Gross block	114	The Corporation is in the process of transferring these asset in its name. The process will be concluded after the necessary regulatory clearances have been obtained.
	Net block	105

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and equipment in the standalone financial statements, the lease agreements are in the name of the Corporation, where the Corporation is the lessee in the agreement.

ii. The Corporation is engaged in providing financial services primarily into housing finance. Accordingly, it does not hold any physical inventories. Thus, paragraph 3 (ii) of the Order is not applicable.

iii. According to the information and explanations given to us and based on the audit procedures conducted by us, the Corporation has granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Corporationâs interest;

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations;

iv. According to the information and explanations given to us and on the basis of our examination of the records of the Corporation, the Corporation has complied with the provisions of section 185 and 186 of the Act in respect of loans, investments, guarantee and security, as applicable.

v. As per the Ministry of Corporate Affairs notification dated 31 March 2014, the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted are not applicable to the Corporation. Accordingly, reporting under Clause 3(v) of the Order is not applicable.

vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any services rendered by the Corporation. Accordingly paragraph 3(vi) of the Order is not applicable.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, goods and services tax, cess and other material statutory dues applicable to it have generally been regularly deposited by the Corporation with the appropriate authorities. As explained to us, the Corporation did not have any dues on account of Customs Duty and Excise Duty.

According to the information and explanations given to us and on the basis of our examination of the records, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, goods and services tax, cess and other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the records, there are no dues of service tax, value added tax and goods and services tax that have not been deposited on account of any dispute. However, according to information and explanations given to us, the following dues of wealth tax, interest on lease tax, employeesâ state insurance, income tax and service tax have not been deposited by the Corporation on account of disputes:

Name of the statute	Nature of dues	Amount (Rs. in crore)	Period to which the amount relates	Forum where dispute is pending
The Wealth Tax Act, 1957	Wealth Tax	0.12	1998-1999	Assistant Commissioner of Wealth Tax
Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985	Interest on lease tax	0.02	1999-2000	Commissioner of Sales Tax (Appeals)
Employees State Insurance Act, 1948	Payment towards Employerâs Contribution to ESIC	0.01	2010-2011	Assistant/ Deputy Director- ESIC
The Income Tax Act, 1961	Penalty Levied	0.02	2012-2013	Commissioner of Income Tax (Appeal) (Mumbai)
The Finance Act, 1994	Service Tax	0.80	2007-2012	CESTAT West Zone, Mumbai

viii. According to the information and explanations given to us and on the basis of our examination of the records, the Corporation has not defaulted in the repayment of loans or borrowings to financial institutions, banks or debenture holders. The Corporation has not taken loans or borrowings from government.

ix. According to the information and explanations given to us and based on our examination of the records, the Corporation has applied the money raised from term loans during the year for the purposes for which they were raised other than temporary deployment pending application of proceeds. The Corporation has not raised money by way of public offer during the year.

x. According to the information and explanations given to us, no material fraud by the Corporation or on the Corporation by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records, the Corporation has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. According to the information and explanations given to us, the Corporation is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Corporation, all transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the standalone financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations give to us and based on our examination of the records, the Corporation has not made any preferential allotment and private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records, the Corporation has not entered into any non-cash transactions with Directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. According to the information and explanation given to us, the Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Thus, paragraph 3 (xvi) of the Order is not applicable to the Corporation.

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (the âActâ)

(Referred to in paragraph (A.f.) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financial statements of Housing Development Finance Corporation Limited (the âCorporationâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date.

In our opinion, the Corporation has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).

Managementâs responsibility for internal financial controls

The Corporationâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Corporationâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorâs responsibility

Our responsibility is to express an opinion on the Corporationâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143 (10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal financial control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Corporationâs internal financial controls with reference to financial statements.

Meaning of internal financial controls with reference to financial statements

A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent limitations of internal financial controls with reference to financial statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

Firmâs Registration No: 101248W/W-100022

AKEEL MASTER

MUMBAI Partner

13 May 2019 Membership No: 046768

Mar 31, 2018

Independent Auditorsâ Report

TO THE MEMBERS OF

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

Report on the standalone financial statements

We have audited the accompanying standalone financial statements of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the ''Corporation''), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs responsibility for the standalone financial statements

The Corporation''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 state of affairs, profit/loss and cash flows of the Corporation in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with relevant rules issued there under and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs 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 there under.

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 standalone financial statements are free from material misstatement.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporation''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

We believe that the audit evidence we have obtained including the financial information as certified by the management of the Corporation as regards erstwhile Grandeur Properties Private Limited (''GPPL''), Haddock Properties Private Limited (''HPPL''), Pentagram Properties Private Limited (''PPPL''), Winchester Properties Private Limited (''Winchester Limited'') and Windermere Properties Private Limited (''Windermere Limited'') (hereinafter all these 5 entities together referred to as ''Transferor Companies'') and the audit evidence obtained by the other auditors of the aforesaid Transferor Companies in terms of their report referred in the sub-paragraph

(a) of the Other matters below 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, and based on the consideration of the management certified financial information in respect of the Transferor Companies for the period from April 1, 2017 to March 28, 2018 and the reports of the other auditors on the financial information of the Transferor Companies for the year ended March 31, 2017, referred in the sub-paragraph (a) of the Other matters below, 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 Corporation as at March 31, 2018, and its profits and its cash flows for the year ended on that date.

Other matters

(a) The standalone financial statements of the Corporation include the financial information of GPPL, HPPL, PPPL, Winchester Limited and Windermere Limited consequent to its merger into the Corporation which has been effected on March 28, 2018, with the appointed date of April 1, 2016 (Refer Note 34 to the financial statements). We did not audit the financial information of the aforesaid Transferor Companies, included in the standalone financial statements of the Corporation, whose financial information reflect total assets of Rs, 99 crores as at March 28, 2018, total revenue of Rs, 59 crores for the year ended on March 31, 2017 and for the period from April 1, 2017 to March 28, 2018 and net cash outflows of Rs, 5 crores for the period from April 1, 2016 to March 28, 2018 as considered in the standalone financial statements. We have been provided with the financial information of the Transferor Companies for the financial year ended March 31, 2017 which has been audited by other auditors whose reports have been furnished to us and for the period from April 1, 2017 to March 28, 2018 by the management of the Corporation and our opinion on the standalone financial statements in so far as it relates to the amounts included in respect of these entities are based solely on the reports of the other auditors for the year ended March 31, 2017 and the financial information for the period from April 1, 2017 to March 28, 2018 as certified by the management of the Corporation.

Our opinion on the standalone financial statements is not modified in respect of the above matter with respect to our reliance on the work done and the reports of the other auditors and the financial information as certified by the management of the Corporation.

(b) Attention is drawn to the fact that the corresponding figures for the year ended March 31, 2017 as reported in these standalone financial statements were audited by another auditor who expressed an unmodified opinion on those standalone financial statements, dated 4 May 2017.

Report on other legal and regulatory requirements

As required by the Companies (Auditor''s Report) Order, 2016 (the ''Order'') issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraph 3 and 4 of the Order, to the extent applicable.

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 Corporation 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 relevant rules issued there under and other accounting principles generally accepted in India;

e) On the basis of the written representations received from the Directors of the Corporation as on March 31, 2018 taken on record by the Board of Directors of the Corporation and declarations from the Directors of the Transferor

Companies as provided to us by the management of the Corporation, none of the Directors are disqualified as on March 31, 2018 from being appointed as a Director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and

g) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on its standalone financial position in its standalone financial statements -Refer Note 23 to the standalone financial statements;

ii. The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts as at year end - Refer Note 38 to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Corporation; and

iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended March 31, 2018.

(Referred to in our report of even date)

(i) (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Corporation has a regular programme of physical verification of fixed assets by which fixed assets are verified annually. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Corporation and the nature of its assets. No material discrepancies were noticed on such verification.

Particulars of land and Building	Rs, in crore	Remarks
Freehold land and building of Global Perspectives Limited located at Gurgaon, admeasuring 2.07 acres	72	The Corporation is in the process of transferring these asset in its name. The process will be concluded after the necessary regulatory clearances have been obtained.
Freehold land and building of Colossal Properties Private Limited located at New Delhi, admeasuring 2.52 acres	42

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Corporation, where the Corporation is the lessee in the agreement.

(ii) The Corporation is engaged in providing financial services primarily into housing finance. Accordingly, it does not hold any physical inventories. Thus, paragraph 3 (ii) of the Order is not applicable.

(iii) According to the information and explanations given to us and based on the audit procedures conducted by us, the Corporation has granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudice to the Corporation''s interest;

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations;

(iv) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Section 185 and subsection (1) of 186 of the Act in connection with loan to any of its Directors or to any person in whom the Director is interested and investments made. The Corporation being a housing finance company, nothing contained in Section 186 is applicable, except subsection (1) of that section.

(v) As per the Ministry of Corporate Affairs notification dated March 31, 2014, the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted are not applicable to the Corporation. Accordingly, reporting under Clause 3(v) of the Order is not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, for any services rendered by the Corporation. Accordingly paragraph 3(vi) of the Order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, value added tax, goods and services tax, cess and other material statutory dues applicable to it have generally been regularly deposited by the Corporation with the appropriate authorities. As explained to us, the Corporation did not have any dues on account of Customs Duty and Excise Duty.

According to the information and explanations given to us and on the basis of our examination of the records, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, service tax, value added tax, goods and services tax, cess and other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the records, there are no dues of service tax, value added tax and goods and services tax that have not been deposited on account of any dispute. However, according to the information and explanations given to us, the following dues of wealth tax, interest on lease tax and Employees'' State Insurance and income tax, have not been deposited by the Corporation on account of disputes.

Name of the statute	Nature of dues	Amount (Rs, in crore)	Period to which the amount relates	Forum where dispute is pending
The Wealth Tax Act, 1957	Wealth Tax	0.12	1998-99	Assistant Commissioner of Wealth Tax
Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985	Interest on lease tax	0.02	1999-2000	Commissioner of Sales Tax (Appeals)
Employees State Insurance Act, 1948	Payment towards Employer''s Contribution to ESIC	0.01	2010-2011	Assistant/ Deputy Director- ESIC
The Income Tax Act, 1961	Penalty Levied	0.02	2012-13	Commissioner of Income Tax (Appeal) (Mumbai)

(viii) According to the information and explanations given to us and on the basis of our examination of the records, the Corporation has not defaulted in the repayment of loans or borrowings to financial institutions, banks or debenture holders. The Corporation has not taken loans or borrowings from government.

(ix) According to the information and explanations given to us and based on our examination of the records of the Corporation, the Corporation has applied the money raised from term loans during the year for the purposes for which they were raised other than temporary deployment pending application of proceeds. The Corporation has not raised money by way of public offer during the year.

(x) According to the information and explanations given to us, no material fraud by the Corporation or on the Corporation by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the Corporation, the Corporation has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us, the Corporation is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Corporation, transactions with the related parties are in compliance with Section 177 and 188 of the Act where applicable and the details have been disclosed in the standalone financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Corporation, the Corporation has made preferential allotment and private placement of shares during the year. The Corporation has complied with the requirement of Section 42 of the Act and amount raised have been used for the purposes for which the funds were raised other than temporary deployment pending application of proceeds.

(xv) According to the information and explanations given to us and based on our examination of the records of the Corporation, the Corporation has not entered into any non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanation given to us, the Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Thus, paragraph 3 (xvi) of the Order is not applicable to the Corporation.

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (the âActâ)

We have audited the internal financial controls over financial reporting of Housing Development Finance Corporation Limited (the âCorporationâ) as of 31 March 2018 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date.

Managementâs responsibility for internal financial controls

The Corporation''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (the âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Corporation''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorâs responsibility

Our responsibility is to express an opinion on the Corporation''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the ICAI and specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Corporation''s internal financial controls system over financial reporting.

Meaning of internal financial controls over financial reporting

The company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and Directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For B S R & Co. LLP

Chartered Accountants

Firm''s Registration No: 101248W/W-100022

AKEEL MASTER

MUMBAI Partner

April 30, 2018 Membership No: 046768

Mar 31, 2017

Report on the Standalone Financial Statements

Independent Auditorsâ Report

TO THE MEMBERS OF

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

We have audited the accompanying standalone financial statements of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the âCorporationâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information in which are incorporated the returns for the year ended on that date audited by the branch auditor of the Corporation''s branch at Dubai.

Managementâs Responsibility for the Standalone Financial Statements

The Corporation''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the âActâ) 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 Corporation in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

In conducting 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 there under.

We conducted our audit of the standalone financial statements 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Corporation''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporation''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditor 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 and based on the consideration of the report of the branch auditor on the financial statements of the branch, 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 Corporation as at March 31, 2017, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We refer to Note 3.2 to the standalone financial statements, which describes the accounting treatment used by the Corporation in creating the Deferred Tax Liability on Special Reserve under section 36( 1)(viii) of the Income Tax Act, 1961 as at April 1, 2014, which is in accordance with the National Housing Bank''s Circular No. NHB (ND)/DRS/Pol. Circular No. 65/2014 dated August 22, 2014.

Our opinion is not modified in respect of this matter.

Other Matter

We did not audit the financial statements of Dubai branch included in the standalone financial statements of the Corporation whose financial statements reflect total assets of Rs, 0.27 crore as at March 31, 2017 and total revenues of Rs, 0.50 crore for the year ended on that date, as considered in the standalone financial statements. The financial statements of this branch has been audited by the branch auditor whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of that branch, and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid branch, is based solely on the report of such branch auditor.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit and on the consideration of the report of the branch auditor, referred to in the Other Matter paragraph above we report, to the extent applicable 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 Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from Dubai branch not visited by us.

c) The reports on the accounts of Dubai branch of the Corporation audited under Section 143 (8) of the Act by the branch auditor has been sent to us and has been properly dealt with by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account and with the returns received from Dubai branch not visited by us.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act.

f) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and its branch refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Corporation''s internal financial controls over financial reporting.

h) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on its financial position in its standalone financial statements;

ii. The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long-term contracts including derivative contracts as at year end.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

iv. The Corporation has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in

(Referred to in paragraph 1(g) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the âCorporationâ) as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date which includes internal financial controls over financial reporting of the Corporation''s branch.

Managementâs Responsibility for Internal Financial Controls

The Corporation''s management is responsible for establishing and

Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the Management we report that the disclosures are in accordance with the books of account maintained by the Corporation and as produced to us by the Management.

2. As required by the Companies (Auditor''s Report) Order, 2016

maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Corporation''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

(the âOrderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

Auditorâs Responsibility

Our responsibility is to express an opinion on the Corporation''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the branch auditor, in terms of their report referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Corporation''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

The Corporation''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Corporation''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporation''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the branch auditor on internal financial controls system over financial reporting of the branch referred to in the Other Matter paragraph below, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note.

Other Matter

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to a branch, is based on the corresponding report of the branch auditor.

Our opinion is not modified in respect of this matter.

(i) (a) To the best of our knowledge and according to the information and explanations given to us, the Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Corporation as at the balance sheet date, except the following:

Particulars of the land and building	'' crore	Remarks
Freehold land and building of Global Perspectives Limited located at Gurgaon, admeasuring 2.07 acres	72.10	The Corporation is in the process of transferring these asset in its name. The process will be concluded after the necessary regulatory clearances have been obtained.
Freehold land and building of Colossal Properties Private Limited located at New Delhi, admeasuring 2.52 acres	42.00

(ii) The Corporation does not have any inventory and hence reporting under Clause 3(ii) of the Order is not applicable.

(iii) To the best of our knowledge and according to the information and explanations given to us, the Corporation has granted loans, secured or unsecured, to companies or other parties covered in the register maintained under section 189 of the Act, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Corporation''s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

(iv) To the best of our knowledge and according to the information and explanations given to us, the Corporation has not granted any loans, made investments or provide guarantees under the provisions of Sections 185 and 186 of the Act and hence reporting under Clause 3(iv) of the Order is not applicable.

(v) As per the Ministry of Corporate Affairs notification dated March 31, 2014, the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted are not applicable to the Corporation and hence reporting under Clause 3(v) of the Order is not applicable.

(vi) To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, in respect of the services rendered by the Corporation.

(vii) To the best of our knowledge and according to the information and explanations given to us, in respect of statutory dues:

(a) The Corporation has generally been regular in depositing undisputed statutory dues, including Income Tax, Sales Tax, Work Contract Tax, Value Added Tax, Service Tax, Cess, Provident Fund, Employees'' State Insurance and other material statutory dues applicable to it to the appropriate authorities. There were no amounts payable in respect of Customs Duty and Excise Duty.

(b) There were no undisputed amounts payable in respect of Income Tax, Sales Tax, Work Contract Tax, Value Added Tax, Service Tax, Cess, Provident Fund, Employees'' State Insurance and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(c) Details of dues of Wealth tax, Interest on Lease Tax and Employees'' State Insurance which have not been deposited as on March 31, 2017 on account of disputes are given below:

Name of Statute	Nature of Dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Involved '' crore	Amount Unpaid '' crore
The Wealth Tax Act, 1957	Wealth Tax	Assistant Commissioner of Wealth Tax	1998-99	0.12	0.12
Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985	Interest on Lease Tax	Commissioner of Sales Tax (Appeals)	1999-2000	0.02	0.02
Employees State Insurance Act, 1948	Payment towards Employer''s Contribution to ESIC	Assistant/Deputy Director - ESIC	2010-2011	0.01	0.01

(viii) To the best of our knowledge and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Corporation has not taken loans or borrowings from government.

(ix) To the best of our knowledge and according to the information and explanations given to us, the money raised by way of the public offer of rupee denominated global bonds and term loans have been applied by the

Corporation during the year for the purposes for which they were raised other than temporary deployment pending application of proceeds.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation by its officers or employees has been noticed or reported during the year.

(xi) To the best of our knowledge and according to the information and explanations given to us, the Corporation has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Corporation is not a Nidhi Company and hence reporting under Clause 3(xii) of the Order is not applicable.

(xiii) To the best of our knowledge and according to the information and explanations given to us, the Corporation is in compliance with Sections 188 and 177 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) To the best of our knowledge and according to the information and explanations given to us, the Corporation has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under Clause 3(xiv) of the Order is not applicable to the Corporation.

(xv) To the best of our knowledge and according to the information and explanations given to us, during the year the Corporation has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable.

(xvi) The Corporation is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firmâs Registration No. 117366W/W-100018)

P. R. Ramesh

MUMBAI Partner

May 4, 2017 (Membership No. 70928)

Mar 31, 2015

We have audited the accompanying standalone financial statements of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the "Corporation"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditor of the Corporation''s branch at Dubai. Management''s Responsibility for the Standalone Financial Statements The Corporation''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 Corporation 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 the assets of the Corporation 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 judgement, 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 Corporation''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 the purpose of expressing an opinion on whether the Corporation has in place an adequate internal financial controls system over financial reporting and the 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 Corporation''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 Corporation as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We refer to Note 3.2 to the financial statements, which describes the accounting treatment used by the Corporation in creating the Deferred Tax Liability on Special Reserve under section 36(1)(viii) of the Income Tax Act, 1961 as at April 1, 2014, which is in accordance with the National Housing Bank''s Circular No. NHB (ND)/DRS/Pol. Circular No. 65/2014 dated August 22, 2014. Our opinion is not modified in respect of this matter.

Other Matter

We did not audit the financial statements/information of one branch included in the standalone financial statements of the Corporation whose financial statements / financial information reflect total assets of Rs.0.90 crore as at 31st March, 2015 and total revenues of Rs. 2.09 crore for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of this branch has been audited by the branch auditor whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of that branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

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 in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 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 Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from Dubai branch not visited by us.

(c) The reports on the accounts of Dubai branch office of the Corporation audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(d) 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 and with the returns received from Dubai branch not visited by us.

(e) 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.

(f) 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.

(g) 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 Corporation has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 22 to the financial statements.

ii. The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long-term contracts including derivative contracts - Refer Notes 3.7, 3.8 and 30 to the financial statements.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

i. According to information and explanation given to us in respect of its fixed assets:

a. The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. Some of the fixed assets were physically verified during the year by the Management in accordance with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

ii. According to the information and explanations given to us, the nature of the Corporation''s business is such that it is not required to hold any inventories.

iii. According to the information and explanations given to us, the Corporation has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans:

a. The receipts of principal amounts and interest have been regular/as per stipulations.

b. There is no overdue amount in excess of ''1 lakh remaining outstanding as at the year-end.

iv. 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 Corporation and the nature of its business for the purchase of fixed assets and for the sale of services and during the course of our audit we have not observed any major weaknesses in such internal control system.

v. In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, the Companies (Acceptance of Deposits) Rules, 2014, as amended and the Housing Finance Companies (NHB) Directions, 2010, with regard to the deposits accepted. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the National Housing Bank or the Reserve Bank of India or any Court or any other Tribunal.

vi. The provisions of clause (3)(vi) of the Order are not applicable to the Corporation as the services rendered by the Corporation are not covered by the Companies (Cost Records and Audit) Rules, 2014.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The Corporation has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income- tax, Sales Tax, Wealth Tax, Service Tax, Value Added Tax, Cess and other material statutory dues in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

c. Details of dues of Wealth Tax, Interest on Lease Tax and Employees'' State Insurance which have not been deposited as on 31st March, 2015 on account of disputes are given below:

Forum where Name of Statute Nature of Dues Dispute is Pending

Assistant The Wealth Tax Act, Wealth Tax Commissioner 1957 of Wealth Tax

Maharashtra Sales Tax on the Transfer of the Commissioner Interest on Lease Right to use any Goods Tax of Sales Tax for any Purpose Act, (Appeals) 1985

Payment towards Assistant / Employees State Employers Deputy Director Insurance Act, 1948 Contribution to ESIC - ESIC

Name of Statute Period to which Amount the Amount Involved Relates rs in Crore

The Wealth Tax Act, 1957 1998- 1999 0.12

Maharashtra Sales Tax on the 1999-2000 2.02 Transfer of the Right to use any Goods for any Purpose Act, 1985

Employees State Insurance Act, 2010-2011 0.01 1948

d. The Corporation has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

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

ix. In our opinion and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

x. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Corporation for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Corporation.

xi. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Corporation during the year for the purposes for which they were obtained other than temporary deployment pending application.

xii. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation has been noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amount whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar MUMBAI Partner 29th April, 2015 (Membership No. 39826)

Mar 31, 2014

We have audited the accompanying financial statements of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED ("the Corporation"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Corporation''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 Corporation in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. 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 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 control relevant to the Corporation''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 Corporation''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 Corporation as at March 31, 2014;

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

(c) in the case of the Cash Flow Statement, of the cash flows of the Corporation 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 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 purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from Dubai branch which has been audited by other auditor, not visited by us.

(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 and with the returns received from Dubai branch which has been audited by other auditor, not visited by us.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs).

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

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Corporation''s business / activities / results / transactions during the year, clauses (ii), (viii), (x) and (xiii) of paragraph 4 of the Order are not applicable to the Corporation.

(ii) In respect of its fixed assets:

(a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

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

(iii) In respect of loans, secured or unsecured, granted by the Corporation to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Corporation has granted loans to eleven parties. At the year-end, the outstanding balances of such loans granted aggregated Rs. 646.53 crore (number of parties - seven) and the maximum amount involved during the year was Rs. 1,076.67 crore (number of parties - eleven).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Corporation.

(c) The receipts of principal amounts and interest have been regular/as per stipulations.

(iv) In respect of loans, secured or unsecured, taken by the Corporation from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has taken loans from fifty one parties. At the year-end, the outstanding balances of such loans taken aggregated Rs. 2,864.27 crore (number of parties - forty two) and the maximum amount involved during the year was Rs. 3,725.30 crore (number of parties - fifty one).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Corporation.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Corporation and the nature of its business for the purchase of fixed assets and for the sale of services and during the course of our audit we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements [excluding items reported under paragraph (iii) and (iv) above] that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, the Companies (Acceptance of Deposits) Rules, 1975 and the Housing Finance Companies (NHB) Directions, 2010, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the National Housing Bank or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by the firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Corporation and the nature of its business.

(ix) According to the information and explanations given to us, in respect of statutory dues:

(a) The Corporation has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Wealth Tax, Interest on Lease Tax and Employees'' State Insurance which have not been deposited as on March 31, 2014 on account of disputes are given below:

Forum where Period to which Amount Name of Statute Nature of Dues Dispute is the Amount Involved Pending Relates Rs. in Crore

Assistant The Wealth Tax Act, Wealth Tax Commissioner 1998-1999 0.12 1957 of Wealth Tax

Maharashtra Sales Tax on the Transfer of the Commissioner Interest on Lease Right to use any Goods of Sales Tax 1999-2000 0.02 Tax for any Purpose Act, (Appeals) 1985

Payment towards Assistant / Employees State Employer''s Deputy Director 2010-2011 0.01 Insurance Act, 1948 Contribution to ESIC - ESIC

(x) In our opinion and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xi) In our opinion, the Corporation has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records and evaluation of the related internal controls, the Corporation has maintained proper records of the transactions and contracts in respect of its dealing in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Corporation in its own name.

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Corporation for loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interest of the Corporation.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Corporation during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) According to the information and explanations given to us and on the basis of the maturity profile of assets and liabilities with a residual maturity of one year, as given in the Asset Liability Management Report, liabilities maturing in the next one year are in excess of the assets of similar maturity by Rs. 2,695.06 crore.

(xvi) According to the information and explanations given to us, the Corporation has made preferential allotment of shares on exercise of options granted in earlier years under the ESOP Schemes to parties covered in the Register maintained under Section 301 of the Companies Act, 1956 at a price which, in our opinion, is prima facie not prejudicial to the interest of the Corporation.

(xvii) According to the information and explanations given to us, during the period covered by our audit report, the Corporation had issued non-convertible debentures amounting to Rs. 24,209 crore. The Corporation has created security in respect of the debentures issued.

(xviii) During the period covered under our audit report, the Corporation has not raised any money by public issues.

(xix) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation has been noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)

Sanjiv V. Pilgaonkar

MUMBAI, Partner

6th May, 2014 (Membership No. 39826)

Mar 31, 2013

We have audited the accompanying financial statements of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the "Corporation"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements The Corporation''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 Corporation in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. 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 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 control relevant to the Corporation''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 Corporation''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 Corporation as at March 31, 2013;

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

(c) in the case of the Cash Flow Statement, of the cash flows of the Corporation 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 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 purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from Dubai branch which has been audited by other auditor, not visited by us.

(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 and with the returns received from Dubai branch which has been audited by other auditor, not visited by us.

(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 Section 274(1)(g) of the Act.

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Corporation''s business/activities/ results/transactions during the year, clauses (ii), (viii), (x) and (xiii) of paragraph 4 of the Order are not applicable to the Corporation.

(ii) In respect of its fixed assets:

(a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified duringthe year by the Management in accordance with a programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

(iii) In respect of loans, secured or unsecured, granted by the Corporation to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Corporation has granted loans to eight parties. At the year-end, the outstanding balances of such loans granted aggregated Rs. 23.17 crores (number of parties - four) and the maximum amount involved during the year was Rs. 313.30 crores (number of parties - eight).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Corporation.

(c) The receipts of principal amounts and interest have been regular/as per stipulations.

(iv) In respect of loans, secured or unsecured, taken by the Corporation from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has taken loans from sixty six parties. At the year-end, the outstanding balances of such loans taken aggregated Rs. 2,522.04 crores (number of parties - fifty eight) and the maximum amount involved during the year was Rs. 3,667.16 crores (number of parties - sixty six).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Corporation.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Corporation and the nature of its business for the purchase of fixed assets and for the sale of services and during the course of our audit we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements [excluding items reported under paragraph (iii) and (iv) above] that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, the Companies (Acceptance of Deposits) Rules, 1975 and the Housing Finance Companies (NHB) Directions, 2010, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company LawTribunal orthe Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by the firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Corporation and the nature of its business.

(ix) According to the information and explanations given to us, in respect of statutory dues:

(a) The Corporation has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Wealth Tax, Interest on Lease Tax and Employees'' State Insurance which have not been deposited as on 31st March, 2013 on account of disputes are given below: Forum where Period to which Amount Name of Statute Nature of Dues Dispute is the Amount Involved Pending Relates Rs. in Crores Assistant The Wealth Tax Act, Wealth Tax Commissioner 1998-1999 0.12 1957 of Wealth Tax

Maharashtra Sales Tax on the Transfer of the Commissioner Interest on Lease Right to use any Goods Tax of Sales Tax 1999-2000 0.02 for any Purpose Act, (Appeals) 1985

Payment towards Assistant / Employees State Employer''s Deputy Director 2010-2011 0.01 Insurance Act 1948 Contribution to ESIC ESIC

(x) In our opinion and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xi) In our opinion, the Corporation has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records and evaluation of the related internal controls, the Corporation has maintained proper records of the transactions and contracts in respect of its dealing in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Corporation in its own name.

(xiii) In our opinion and according to the information and explanations given to us, the Corporation has not given any guarantees for loans taken by others from banks and financial institutions.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Corporation during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) According to the information and explanations give to us and on the basis of the maturity profile of assets and liabilities with a maturity profile of one year, as given in the Asset Liability Management Report, liabilities maturing in the next one year are not in excess of the assets of similar maturity.

(xvi) According to the information and explanations given to us, the Corporation has made preferential allotment of shares on exercise of options granted in earlier years under the ESOP Schemes to parties covered in the Register maintained under Section 301 of the Companies Act, 1956 at a price which, in our opinion, is prima facie not prejudicial to the interest of the Corporation.

(xvii)According to the information and explanations given to us, during the period covered by our audit report, the Corporation had issued non- convertible debentures amounting to Rs. 33,180 crores. The Corporation has created security in respect of the debentures issued.

(xviii) During the period covered under our audit report, the Corporation has not raised any money by public issues.

(xix) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation has been noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

Sanjiv V. Pilgaonkar

MUMBAI, Partner

8th May, 2013 (Membership No. 39826)

Mar 31, 2012

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (the "Corporation") as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Corporation for the year ended on that date, both annexed thereto, in which are incorporated the Returns from the Dubai Branch audited by other auditors. These financial statements are the responsibility of the Corporation's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 ("CARO"/ the "Order") issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Dubai Branch audited by other auditors;

(iii) the reports on the accounts of the Dubai Branch audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report;

(iv) 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 and the audited Branch Returns;

(v) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements 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 Corporation as at March 31, 2012;

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

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

5. On the basis of the written representations received from the Directors as on 31st March, 2012 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 Section 274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Corporation's business/ activities/results/transactions etc. clauses (ii), (viii), (x) and (xiii) of paragraph 4 of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, 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 Corporation and such disposal has, in our opinion, not affected the going concern status of the Corporation.

(iii) In respect of loans, secured or unsecured, granted by the Corporation to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has granted loans to fourteen parties. At the year end, the outstanding balances of such loans granted aggregated Rs 222.57 crores (number of parties - ten) and the maximum amount involved during the year was Rs 1,167.63 crores.

(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 Corporation.

(c) The receipts of principal amounts and interest have been regular/as per stipulations.

(iv) In respect of loans, secured or unsecured, taken by the Corporation from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has taken loans from sixty four parties. At the year-end, the outstanding balance of such loans taken aggregated Rs 2,574.06 crores (number of parties - fifty seven) and the maximum amount involved during the year was Rs 4,902.12 crores.

(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 Corporation.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Corporation and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements [excluding items reported under paragraphs (iii) and

(iv) above] that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Housing Finance Companies (NHB) Directions, 2010, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii)In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Corporation and the nature of its business.

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Corporation has been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Cess and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Wealth Tax, Interest on Lease Tax, Employees' State Insurance which have not been deposited as on 31st March, 2012 on account of disputes are given below:

Statute Nature of Forum where Period to Amount Dues Dispute is which the involved pending amount relates Rs in crores

The Wealth Tax Wealth Tax Assistant 1998-1999 0.12 Act, 1957 Commissioner of Wealth Tax

Maharashtra Sales Interest on Commissioner 1999-2000 0.02 Tax on the Transfer Lease Tax of Sales Tax of the Right to use (Appeals) any Goods for any Purpose Act, 1985

Employees State Payment towards Assistant / 2010-2011 0.01 Insurance Act, 1948 Employer's Contribution Deputy Director to ESIC - ESIC

(x) In our opinion, and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(xi) In our opinion, the Corporation has maintained adequate records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records and evaluation of the related internal controls, the Corporation has maintained proper records of the transactions and contracts in respect of its dealings in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Corporation in its own name.

(xiii)In our opinion, and according to the information and explanations given to us, the Corporation has not given any guarantees for loans taken by others from banks and financial institutions.

(xiv)In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) According to the information and explanations given to us and on the basis of maturity profile of the assets and liabilities with a residual maturity of one year, as given in the Asset Liability Management Report, liabilities maturing in the next one year are not in excess of the assets of similar maturity.

(xvi)The Corporation has made preferential allotment of shares on exercise of options granted in earlier years under the ESOP Schemes to parties covered in the Register maintained under Section 301 of the Companies Act, 1956. The prices at which such shares are allotted are not prima facie prejudicial to the interests of the Corporation.

(xvii) According to the information and explanations given to us, during the period covered by our audit report, the Corporation has issued secured non-convertible debentures amounting to Rs 22,492 crores. The Corporation has created security in respect of the debentures issued.

(xviii) During the period covered by our audit report, the Corporation has not raised any money by public issues.

(xix)To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation was noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No.117366W)

Sanjiv V. Pilgaonkar

MUMBAI, Partner

7th May, 2012 (Membership No. 39826)

Mar 31, 2011

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED ("the Corporation") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Corporation for the year ended on that date, both annexed thereto, in which are incorporated the Returns from the Dubai Branch audited by other auditors. These financial statements are the responsibility of the Corporations Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Dubai Branch audited by other auditors;

(iii) the reports on the accounts of the Dubai Branch audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report;

(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Returns;

(v) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Corporation as at 31st March, 2011;

(b) in the case of the Profit and Loss Account, of the profit of the Corporation for the year ended on that date and

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

5. On the basis of the written representations received from the Directors as on 31st March, 2011 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 Section 274(1)(g) of the Companies Act, 1956.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Corporations business/activities/results/ transactions etc. clauses (ii), (viii), (x) and (xiii) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, 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 Corporation and such disposal has, in our opinion, not affected the going concern status of the Corporation.

(iii) In respect of loans, secured or unsecured, granted by the Corporation to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has granted loans to eleven parties. At the year end, the outstanding balances of such loans granted aggregated Rs. 940,67,63,993 (number of parties - eight) and the maximum amount involved during the year was Rs. 1299,38,93,070.

(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 Corporation.

(c) The receipts of principal amounts and interest have been regular/ as per stipulations.

(iv) In respect of loans, secured or unsecured, taken by the Corporation from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has taken loans from seventy eight parties. At the year-end, the outstanding balance of such loans taken aggregated Rs. 3548,87,62,991 (number of parties Ã sixty nine) and the maximum amount involved during the year was Rs. 4657,52,11,483.

(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 Corporation.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Corporation and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements [excluding items reported under paragraphs (iii) and (iv) above] that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Housing Finance Companies (NHB) Directions, 2001, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Corporation and the nature of its business.

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Corporation has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income- tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income- tax, Cess and other material statutory dues in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

(c) Details of dues of Sales-tax, Wealth Tax, Interest on Lease Tax, Stamp Duty and Employees State Insurance which have not been deposited as on 31st March, 2011 on account of disputes are given below:

Statute Nature of Forum where Dues Dispute is pending

The West Sales Tax Commissioner Bengal Sales of Sales Tax Tax Act,1994 (Appeals)

The Wealth Wealth Tax Assistant Tax Act, 1957 Commissioner of Wealth Tax

Maharashtra Sales Interest on Commissioner of Tax on the Transfer Lease Tax Sales Tax (Appeals) of the Right to use any Goods for any Purpose Act, 1985

Indian Stamp Stamp Duty Inspector General Act, 1899 of Stamps

Employees State Payment towards Assistant / Deputy Insurance Employers Director Ã ESIC Act, 1948 Contribution to ESIC

Statue Period to Amount which the involved amount relates Rs.

The West Bengal Sales Tax Act,1994 1994-1995, 3,53,197

1999-2000, 2002-2003

The Wealth Tax Act, 1957 1998-1999 11,97,432

Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985 1999-2000 2,20,794

Indian Stamp Act, 1899 2004-2005 26,725

Employees State Insurance Act, 1948 2010-2011 1,46,448

(x) In our opinion, and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(xi) In our opinion, the Corporation has maintained adequate records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records and evaluation of the related internal controls, the Corporation has maintained proper records of the transactions and contracts in respect of its dealings in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Corporation in its own name.

(xiii) In our opinion, and according to the information and explanations given to us, the Corporation has not given any guarantees for loans taken by others from banks and financial institutions.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) According to the information and explanations given to us and on the basis of maturity profile of the assets and liabilities with a residual maturity of one year, as given in the Asset Liability Management Report, liabilities maturing in the next one year are not in excess of the assets of similar maturity.

(xvi) The Corporation has made a preferential allotment of shares on exercise of options granted in earlier years under the ESOP Schemes to parties covered in the Register maintained under Section 301 of the Companies Act, 1956. The prices at which such shares are allotted are not prima facie prejudicial to the interests of the Corporation.

(xvii) According to the information and explanations given to us, and during the period covered by our audit report, the Corporation has issued secured non-convertible debentures amounting to Rs. 13,865 crores. The Corporation has created security in respect of the debentures issued.

(xviii) During the period covered by our audit report, the Corporation has not raised any money by public issues.

(xix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation was noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No.117366W)

P. R. Ramesh

MUMBAI, Partner

10th May 2011 (Membership No. 70928)

Mar 31, 2010

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (Ãthe CorporationÃ) as at March 31, 2010, the Profit and Loss Account and the Cash Flow Statement of the Corporation for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the CorporationÃs Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (AuditorÃs Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) 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 the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Dubai Branch not visited by us;

(c) the report on the accounts of the Dubai Branch audited by the Branch Auditors has been forwarded to us and has been dealt with by us in preparing this report;

(d) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch returns;

(e) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Corporation as at 31st March, 2010;

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

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

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

Annexure to the AuditorsÃ Report (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the CorporationÃs business/ activities/results/transactions etc. clauses (ii), (viii), (x) and (xiii) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, 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 Corporation and such disposal has, in our opinion, not affected the going concern status of the Corporation.

(iii) In respect of loans, secured or unsecured, granted by the Corporation to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Corporation has granted loans to twelve parties. At the year end, the outstanding balances of such loans granted aggregated Rs. 1028,26,86,264 (number of parties - seven) and the maximum amount involved during the year was Rs. 1902,43,40,479.

(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 Corporation.

(c) The receipts of principal amounts and interest have been regular/as per stipulations.

(iv) In respect of loans, secured or unsecured, taken by the Corporation from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us.

(a) The Corporation has taken loans from fifty nine parties. At the year-end, the outstanding balance of such loans taken aggregated Rs. 2448,95,60,709 (number of parties - fifty two) and the maximum amount involved during the year was Rs. 2978,95,82,951.

(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 Corporation.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Corporation and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements [excluding items reported under paragraphs (iii) and (iv)] that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Sections 58 and 58AA of the Companies Act, 1956 and the Housing Finance Companies (NHB) Directions, 2001, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Corporation and the nature of its business.

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Corporation has been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Details of disputed Sales- tax, Wealth Tax, Interest on Lease Tax and Stamp Duty which have not been deposited as on 31st March, 2010 on account of any dispute are given below:

Statute Nature of Forum where Dues Dispute is pending

The West Sales Tax Commissioner Bengal Sales of Sales Tax Tax Act, 1994

The Wealth Wealth Tax Assistant Tax Act, 1957 Commissioner of Wealth Tax

Maharashtra Interest on Commissioner Sales Tax on lease Tax of Sales Tax the Transfer (Appeals) of the Right to use any Goods for any Purpose Act, 1985

Indian Stamp Stamp Duty Inspector Genera Act, 1899 of Stamps

Statue Period to Amount which the involved amount relates (Rs.)

The West Bengal Sales Tax Act, 1994 1994-1995,1999 3,53,197 2000, 2002-2003

The Wealth Tax Act, 1957 1998-1999 11,97,432

Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985 1999-2000 2,20,794

Indian Stamp Act, 1899 2004-2005 26,725

(x) In our opinion, and according to the information and explanations given to us, the Corporation has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(xi) In our opinion, the Corporation has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records and evaluation of the related internal controls, the Corporation has maintained proper records of the transactions and contracts in respect of its dealings in shares, securities and debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Corporation in its own name.

(xiii) In our opinion, and according to the information and explanations given to us, the Corporation has not given any guarantees for loans taken by others from banks and financial institutions.

(xiv) In our opinion and according to the information and explanations given to us, term loans availed by the Corporation were, prima facie, applied by the Corporation during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.

(xv) According to the information and explanations given to us and on the basis of maturity profile of the assets and liabilities with a residual maturity of one year, as given in the Asset Liability Management Report, liabilities maturing in the next one year are not in excess of the assets of similar maturity.

(xvi) The Corporation has made a preferential allotment of shares on exercise of options granted in earlier years under the ESOP Schemes to parties covered in the Register maintained under Section 301 of the Companies Act, 1956. The prices at which such shares are allotted are not prima facie prejudicial to the interests of the Corporation.

(xvii) According to the information and explanations given to us, and during the period covered by our audit report, the Corporation has issued secured non-convertible debentures amounting to Rs.11,400 crores. The Corporation has created security in respect of the debentures issued.

(xviii) During the period covered by our audit report, the Corporation has not raised any money by public issues.

(xix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Corporation and no material fraud on the Corporation was noticed or reported during the year, although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Corporation and the nature of its business and which have been provided for.

For DELOITTE HASKINS & SELLS Chartered Accountants

(Registration No.117366W)

P. R. Ramesh MUMBAI, Partner

May 3, 2010 (Membership No. 70928)

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