Here is the Chairman’s annual letter from HDIL (Housing Development & Infrastructure Ltd), one of India’s leading real estate company with a strong base in Mumbai metropolitan region (MMR), having a successful track record in every kind of real estate project. The letter offers a good perspective to real estate investors like us.
———————————————————–
Dear Shareholders,

The year 2011-12 was a year of major economic upheaval, marked by sluggish growth, global uncertainties and low market sentiments. The real estate sector in India was severely impacted by the liquidity
crisis, high inflation, slowdown of growth, consumption and investment cycle. The slowdown in the economy and the rise in real estate prices during previous years plummeted demand across all segments of the
sector leading to a decline in overall growth in Real Estate sector during the year.

The Reserve Bank of India (RBI) increased the interest rates, to restrict inflationary forces and to curtail excessive spending. As a result, the cost of borrowings also increased thus affecting the
overall performance of the sector and thus needless to say, the industry cannot be completely immune to such repercussions. Residential segment of Real Estate saw curtailed demand due to rising mortgage
rates. Changes in regulations within Mumbai and its development control regulations also contributed to the delays in its approval processes.

Amidst this environment, your Company has not only managed to stay on its course but has also sought to explore newer avenues. I believe that the year ahead will continue to be characterized by a series of
challenges as the Government intends to balance rapid economic growth and inflation concerns but your Company shall strive to withstand such volatile environment and successfully attempt to implement a series of strategic actions to mitigate risks.

Projects of your Company include Slum Rehabilitation as well as free sale buildings. MMRDA has already started the process of shifting of eligible slum dwellers from Mumbai International Airport slums (MIAL)
to Kurla Premiere compound and have issued Allotment letters to the eligible slum dwellers for the 1st phase and thus, we are proud to say that we do not just construct, but develop and contribute to a better
city through social upliftment. Your Company remains steadfast in its resolve to play a small but pivotal role in becoming a harbinger of growth; in building an India and where every Indian has a home to call
his own.

Your Company fared well during the quarter ended 31 March, 2012 compared to corresponding quarter in the previous year ended 31 March, 2011. Consolidated net profit was increased by 70% from Rs 18,521.39 lacs to Rs 31,551.27 lacs. Revenue rose by 13% from Rs 55,265.44 lacs to Rs 62,512.01 lacs. In fact, its net debt has been reduced by almost Rs45,456.32 lacs. However, the gap between actual performance and the envisaged growth can be attributed mainly to the delay in progress/ completion of some of our projects due external reasons beyond our control.

Entertainment represents other business opportunities for HDIL. Through our subsidiary HDIL Entertainment, Company has entered into Entertainment industry, developing and operating movie multiplexes
under the brand name Kulraj Broadway. During the year under review, one more Company was added in our list of Subsidiaries namely HC Infracity Private Limited. This backward and forward integration strategy has helped us create value across the real estate spectrum and implement stringent quality controls. The HDIL Group will continue to deliver value and ensure business practices that are second to none. We
will build a better habitat for our customers, today and tomorrow.

Since inception the Company has always strived to set the benchmark for a fast growing industry, customer centric approach, uncompromising business ethics, timeless values and transparency in all spheres of
business conduct and is determined to live up to its stakeholders expectations. To achieve this, our employees are actively encouraged to think, evolve and act, as individual development is the key to our
success. Investing in people’s ideas adds value, and endows them with the passion to make a difference. HDIL is an organization where quality meets excellence, technology meets aesthetics and passion meets
perfection.

Let me assure you that your Company is confident of weathering the ongoing challenges successfully and stands firm in its commitment of ensuring that it continues to efficiently implement all strategic
imperatives and necessary action plans to further strengthen its performance.

We would like to thank hereby, all our stakeholders for reposing their trust in not only our performance but also our potential. We are grateful to them for standing strong by our side during these uncertain
and trying circumstances.

We look forward to your continued support as we navigate into a more hopeful and prosperous future.

Yours sincerely,
Rakesh Kumar Wadhawan
Executive Chairman