Parsvnath Developers

1.  We have audited the attached Balance Sheet of Parsvnath Developers
 Limited (the Company) as at 31 March, 2008, and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto. These financial statements are the responsibility
 of the Companys management.  Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 & 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 a.  we have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 b.  in our opinion, proper books of account, as required by law, have
 been kept by the Company, so far as appears from our examination of
 those books;
 
 c.  the Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d.  in our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956;
 
 e.  On the basis of written representations received from directors, as
 on 31 March, 2008 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31 March, 2008
 from being appointed as a director in terms of clause (g) of sub
 section (1) of Section 274 of the Companies Act, 1956.
 
 f.  in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with the
 notes thereon, 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
 Company as at 31 March, 2008;
 
 ii. in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and
 
 iii. in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to In paragraph 3 of our report of even date)
 
 1.  a.  The Company has generally maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets except in respect of shuttering and scaffolding wherein the
 fixed asset register is in the process of being updated.
 
 b.  According to the information and explanations given to us, the
 Company has a programme of physically verifying its fixed assets in a
 phased manner designed to cover all assets over a period of two years,
 which in our opinion is reasonable having regard to the size of the
 Company and the nature of its business. In accordance with this
 programme, the Management had carried out a physical verification of
 fixed assets, other than shuttering and scaffolding, at some locations
 during the year and no material discrepancies were noticed on such
 verification. In respect of Shuttering and Scaffolding, the
 discrepancies, if any, can not be determined.
 
 c.  According to the information and explanations given to us, the
 Company has not disposed of a substantial part of its fixed assets
 during the year.
 
 2.  a.  Inventory comprises finished flats and work-in- progress.
 Inventory of finished flats have been physically verified during the
 year by the management. In our opinion, the frequency of verification
 is reasonable. According to the information and explanation given to
 us, keeping in view the nature of the operations of the company,
 inventory of work-in-progress can not be physically verified.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventory of
 finished flats followed by the Management are reasonable and adequate
 in relation to the size of the Company and the nature of its business.
 
 c.  In our opinion and according to the information and explanations
 given to us, the company has maintained proper records of its inventory
 of finished flats and no material discrepancies were noticed on
 physical verification of inventory as compared to the book records.
 
 3.  a.  The Company has granted unsecured loans to five Private Limited
 Companies (its wholly owned subsidiaries) covered in the register
 maintained under section 301 of the Companies Act, 1956.
 
 The year end balance of such loans is Rs. (000) 590,412 and the
 maximum amount outstanding during the year was Rs. (000) 625,066.
 
 b.  The above-mentioned loans are non-interest bearing. In our opinion
 and according to the Information and explanations given to us, other
 terms and conditions of such loans given by the Company are prima
 facie, not prejudicial to the Interest of the Company.
 
 c.  The aforesaid loans given by the Company are repayable on demand
 and there is no repayment schedule. Therefore, the question of
 repayment being regular does not arise.
 
 d.  Since the loans are repayable on demand, the question of overdue
 amount does not arise.
 
 e.  As informed to us, the Company has taken unsecured loans from two
 directors covered In the register maintained under section 301 of the
 Companies Act, 1956. The year end balance of such loans is Rs. (000)
 78,518 and the maximum amount outstanding during the year was Rs.
 (000) 169,000.
 
 f.  In our opinion and according to the Information and explanations
 given to us, the rate of Interest and other terms and conditions of
 such loans taken by Company are, prima facie, not prejudicial to the
 interests of the Company.
 
 g.  Since the aforesaid loans taken by the Company are repayable on
 demand and there is no repayment schedule, the question of repayment
 being regular does not arise.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanations that it is not feasible
 to obtain comparable alternative quotations for purchase of land for
 sale or development, there is an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control system.
 
 5.  a.  In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 that need to be entered into the register maintained under section 301
 of the Companies Act, 1956 have been so entered.
 
 b. In our opinion and according to the information and explanations
 given to us, transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 6.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public as defined under
 the provisions of section 58A and 58AA of the Companies Act, 1956 and
 the rules framed there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of cost records
 under clause (d) of sub- section (1) of Section 209 of the Companies
 Act, 1956 for any of the products of the Company.
 
 9.  According to the information and explanations given to us and the
 records of the Company examined by us:
 
 a.  the Company has generally been regular in depositing its undisputed
 statutory dues including Provident Fund, Employees State Insurance,
 Income Tax, Sales Tax, wealth Tax, Service Tax, Custom Duty, Cess and
 any other statutory dues with the appropriate authorities during the
 year and that there were no undisputed amounts payable in respect of
 these statutory dues which have remained outstanding as at 31 March
 2008 for a period of more than six months from the date they became
 payable. We are informed that the Companys operations, during the
 year, did not give rise to any liability for Excise Duty and Investor
 Education and Protection Fund.
 
 b.  According to the information and explanations given to us, there
 are no dues in respect of Sales Tax, Income Tax, Wealth Tax, Service
 Tax, Excise Duty, Customs Duty and Cess, which have not been deposited
 on account of any dispute.
 
 10.  The Company does not have arty accumulated losses at the end of
 the financial year. The Company has not incurred any cash losses during
 the current financial year or in the immediately preceding financial
 year.
 
 11.  Based on the examination of the books of account and related
 records and according to the information and explanations given to us,
 we are of the opinion that, except delays in some cases, the Company
 has not defaulted in repayment of dues to banks, financial institutions
 or debenture holders.
 
 12.  According to the information and explanations given to us and
 based on documents and records examined by us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 13.  In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/Society. Accordingly, the provisions of clause 4(xiii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company is not dealing or trading in shares,
 securities, debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 16.  Based on the examination of the books of account and related
 records and according to the information and explanations given to us,
 the term loans have been applied for purpose for which they were
 obtained.
 
 17.  According to the information and explanations provided to us and
 on an overall examination of the Balance Sheet of the Company, funds
 raised on short-term basis have prima facie, not been used for long
 term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 19.  The Company has created securities in respect of secured
 non-convertible debentures issued.
 
 20.  We have verified the end use of the money raised by public issue
 as disclosed in the Note 6d of Schedule S forming part of the
 financial statements.
 
 21.  According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 year.
 
                                      For DELOITTE HASKINS & SELLS
                                         Chartered Accountants
 
                                                  Sd/-
                                           JITENDRA AGARWAL
 New Delhi                                      Partner
 20 June, 2008                           Membership No. 87104