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Housing Development Finance Corporation Ltd			(Industry : Finance - Housing)

BSE Code:	500010	NSE Symbol:	HDFC	P/E (TTM):	28.82897
ISIN Demat:	INE001A01036	Div & Yield %:	1.16223	EPS (TTM) ( Cr.) :	31.34
Book Value ( Cr.):	161.58	Market Cap ( Cr.):	139789.52	Face Value ( Cr.) :	2

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Auditors

TO THE MEMBERS OF HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

1. We have audited the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED ("the Corporation") as at 31^st 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 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) 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 31^st 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

5. On the basis of the written representations received from the Directors as on 31^st March, 2011 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31^st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

	For DELOITTE HASKINS & SELLS
	Chartered Accountants
	(Registration No.117366W)
	P. R. Ramesh
MUMBAI,	Partner
10^th May 2011	(Membership No.70928)

Annexure to the Auditors’ Report

(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 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.

(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 –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.

(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 31^st 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 31^stMarch, 2011 on account of disputes are given below:

Statute	Nature of Dues	Forum where Dispute is pending	Period to which the amount relates	Amount involved
				Rs
The West Bengal Sales Tax Act,1994	Sales Tax	Commissioner of Sales Tax (Appeals)	1994-1995, 1999-2000, 2002-2003	3,53,197
The Wealth Tax Act, 1957	Wealth Tax	Assistant Commissioner of Wealth Tax	1998-1999	11,97,432
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	2,20,794
Indian Stamp Act, 1899	Stamp Duty	Inspector General of Stamps	2004-2005	26,725
Employees’ State Insurance Act, 1948	Payment towards Employer’s Contribution to ESIC	Assistant / Deputy Director – ESIC	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
10^th May 2011	(Membership No. 70928)