Parsvnath Developers

Dear Shareholders
 
 2007-08 marked a year of many milestones in your Companys success
 odyssey. It was a year of major restructuring and large-scale expansion
 for your Company, where we successfully tapped a huge mass of the
 booming real estate business.
 
 Driven by a booming economy, favourable demographics and liberalized
 foreign direct investment (FDI) policy, the Indian real estate sector
 has witnessed a revolution of sorts in recent years. Crowing at a
 staggering 30 per cent per annum, the sector has emerged as one of the
 most appealing investment areas for domestic as well as foreign
 investors.
 
 Improved infrastructure has resulted in population moving from Metro
 Cities to more affordable Tier II and III cities and this momentum is
 likely to continue. Continuous flow of FDI in Real Estate reinforced
 expected growth in the sector. It gives me immense pleasure to state
 that your Company proactively and prudently expanded geographically and
 sector-wise to exploit this huge potential. The FDI inflow during the
 year is a healthy indicator of the faith reposed by investors in your
 Company.
 
 A focused and far-sighed growth strategy has helped your Company scale
 new levels its growth trajectory.  Furthermore, with SEBI allowing
 Asset Management Companies to enter into Real Estate through close
 ended funds, and also opening the doors for REIT (Real Estate
 Investment Trust) funding, the prospects for growth have improved
 manifold.
 
 FINANCIAL HIGHLIGHTS
 
 Your Company has declared its FY08 results with 20% YoY growth in
 consolidated revenues and 37% YoY growth in consolidated profit after
 tax to Rs. 18.37 bn and Rs. 4.24 bn, respectively.
 
 On the back of this financial success, the Board of Directors of your
 Company has recommended a dividend @ 30% for the year ended March 31,
 2008.
 
 OPERATIONAL HIGHLIGHTS
 
 On the operational front, your Company has increased its land bank from
 1 53 mn sq.ft. in FY07 to 211 mn. sq. ft in FY08. During the financial
 year under review, the land bank under execution stood at 77 mn sq.ft.
 with 114 projects spanning across Residential, Plots, Commercial
 Offices, DMRC (BOT projects), Hotels and SEZs. At the same time, your
 Company has ensured that expansion has transpired at viable rates from
 grass root level, explicit from our average cost of land standing at
 Rs. 207 per sq. ft, making your Company one of the most
 cost-competitive real estate companies in the country.
 
 Another development which gives me immense satisfaction to report is
 your Company acquiring 14 new projects (3 Residential, 5 Commercial, 2
 DMRC on BOT basis, 3 SEZs and 1 IT Park project) and launching 28 new
 projects (11 Residential, 12 Commercial, 5 Township Projects) during
 the year. Concurrently, your Company maintained its impeccable track
 record of on-time delivery of projects and our structured marketing
 exercise helped us cater to a wide base of target customers with your
 Company successfully handing over 13 Residential, 13 Commercial and 6
 DMRC projects across the country with complete customer satisfaction in
 the year under review. We are also very happy to have added ,423
 customers during the year.
 
 In another key development, your Company moved into Lutyens Delhi with
 a proposed luxury shopping and state-of-the-art office complex, for
 which it has acquired a plot at a prime location at K.G.  Marg, New
 Delhi.
 
 Restructuring
 
 In a series of restructuring initiatives, your Company formed Jarul
 Promoters & Developers Pvt Ltd,. Baasima Buildcon Pvt Ltd, Parsvnath
 Developers (GMBT) Pvt Ltd and Parsvnath Developers (SBBT) Pvt Ltd as
 its subsidiaries. It also incorporated a subsidiary company viz. PDL
 Assets Ltd to carry on asset management and asset holding activities.
 
 To undertake Retail Business in India, your Company incorporated a
 subsidiary company viz. Parsvnath Retail Ltd. It further incorporated
 two subsidiary companies, namely Parsvnath Developers Pte Ltd., a
 private company limited by shares incorporated in Singapore, and.
 Parsvnath Hotels Ltd, for undertaking Hotel Business in India. Your
 Companys Singapore office became operational during the year, giving
 an added impetus to its operations.
 
 All these diversification-centric initiatives are expected to
 fast-track your Company to the next level in the year ahead.
 
 Focus on Hospitality and Retail Business
 
 Through its subsidiary, Parsvnath Hotels Ltd (PHL), your Company is
 currently developing 22 Hotel projects as compared to 17 last year.
 
 Your Company is planning to develop 75-100 hotels in fast evolving Tier
 II & III cities and also across all the major cities in the country.
 Your Company has already entered into strategic alliances with leading
 hospitality brands like Fortune Park Hotels Ltd. (FPHL), a subsidiary
 of ITC Welcomgroup, and Royal Orchid Hotels Ltd.  (ROHL), with the
 objective of taking the projects under this vertical ahead. This will
 contribute significantly to the growth of our hospitality business in
 the coming years.
 
 PHL and FPHL will develop 50 Hotels in the next five years, where PHL
 will own and develop the hotels and FPHL will operate and market these
 hotels. Under this agreement, twenty 5-Star, twenty 4-Star and ten
 Mid-Market Budget Hotels, will be developed.
 
 PHL and ROHL will operate under the JV company Parsvnath Royal Orchid
 Hotels Ltd. (PROHL) were PHL holds 70% stake. Under this agreement,
 PROHL will own and develop 10 Hotel projects in the next five years.
 
 Focus on High-Growth Customer Segments Your Companys strategy has
 always been focused on high-growth segments, both in terms of customer
 and geographical demand. In line with this policy, your Company has
 identified the NRI/HNI segment as a niche customer base, taking on
 specialized projects specifically targeted towards this high-end
 segment.
 
 Parsvnath PRIDEASIA in Chandigarh is one of your Companys most
 exquisite projects addressing the needs of the NRI/HNI segment. We
 expect this landmark development to become the most sought after
 address in the region, given its strategic location coupled with the
 rising inflow of professionals.
 
 It is a landmark project in India and an important milestone in
 furthering the Public Private Partnership (PPP) model for development
 of Chandigarh, which is fast becoming the most attractive hub for
 investments, job creation, education and living in India.
 
 Focus on High-Growth Cities
 
 Like Chandigarh, your Company is targeting many other emerging Tier II
 & III cities across the country in an effort to maximize revenue and
 minimize risk. In a bid to diversify its portfolio and further de- risk
 its business model, your Company has forayed into several fast- growing
 cities like Agra, Ahmedabad, Bhiwadi, Cochin, Dharuhera, Goa, Indore,
 Jaipur, Jodhpur, Jamnagar, Kochi, Kundli, Lucknow, Mohali, Moradabad,
 Nanded, Panchkula, Panipat, Pune, Rajpura, Rae Barelli, Ranchi,
 Sonepat, Shirdi, Sidhra (Jammu), Ujjain, etc. for real estate
 development across various verticals.
 
 Focus on Private Funding and Partnerships
 
 Private Funding and Partnerships hold the key to real estate
 development in the country. Your Company has already adopted the BOT
 route and, during the year, your Companys concession agreements with
 Delhi Metro Rail Corporation (DMRC) for development of shopping malls
 at stations touched 13.
 
 In another significant achievement, two Saffron Group managed funds,
 Yatra Capital Ltd and Saffron India Real Estate Fund I (SIREF I), have
 joined hands with your Company for the development of BEST bus depot
 near the Bandra Kurla Complex in Mumbai. The agreement is a reflection
 of the high investor interest and confidence in the Parsvnath Group.
 
 Your Company also bagged two Bus Depot projects (Geeta Mandir & Subhash
 Bridge Depot) at Ahmedabad at Rs. 400 crore and Rs.  128crore,
 respectively, in the fourth quarter of the year.
 
 These developments will give a major fillip to your Companys
 commitment to working towards better results for its investors.
 
 Focus on De-Risking Business
 
 Traditionally focusing on Residential and Commercial development, your
 Company has gone in for a shift in strategy to focus more on
 high-growth business segments like IT Parks, SEZs, Hotels, BOT projects
 and Construction Contracts. During the year gone by, your Company
 either launched or kick-started the process of development of several
 big projects across these segments, details of which shall be shared
 with you in separate sections of this report.
 
 Concurrently, to sustain growth in its traditional domain area of
 residential development, your Company is focusing more on Integrated
 Group Housing projects, where the growth potential continues to boom,
 especially in our targeted Tier II & III cities.
 
 TELECOM FORAY
 
 In another diversification move, your Company has identified Telecom as
 a major sector for growth in the years ahead. Ours is the first real
 estate company to gauge the business opportunity and in a bid to
 diversify our business portfolio, we applied for Telecom license for
 providing Unified Access Services in 22 telecom circles across the
 country. However, the application was rejected by the Department of
 Telecommunication on certain technical grounds.  We have filed a writ
 petition before the Delhi High Court and the Honourable Court has
 reserved the seniority of the Company till the final decision of the
 petition. We are very hopeful that the writ petition shall be allowed.
 
 With the government following an open policy on spectrum, your Company
 seeks to use this opportunity for providing unified access service on a
 Pan India basis, including rural telephony. The licence for Unified
 Access Services would entail a 2G licence for GSM and a triple play of
 various services like IPTV, Wi-Max, Internet, Broadband and any other
 services relating to the signal.
 
 This is a great opportunity for the Company to diversify into a new
 business area, which is continuously growing. Despite increasing number
 of subscribers, the penetration of mobile telephony in India is still
 low as compared to developed countries. As and when number portability
 is introduced, it would offer immense business opportunity to new
 entrants.
 
 GRIEVANCE REDRESSAL
 
 It has been our conscious effort always to ensure the best of services
 to our stakeholders at all times. In line with this thinking, we have
 now initiated a special e-mail service, operating under the e-mail ID
 investors@parsvnath.com for the purpose of registering complaints by
 the investors on ourwebsitehttp://www.parsvnath.com
 
 FUTURE OUTLOOK
 
 Given its Pan-India presence, with projects spanning all the key real
 estate verticals, your Company is comfortably placed to make the most
 of opportunities across the entire gamut of real estate development.
 Your Companys land bank is relatively low-risk as the land is already
 in the Companys possession and falls under the approved use zone.
 
 We expect that your Companys continued demonstration of execution
 capabilities, reflected in rising completion and booking volumes, its
 strong earnings momentum and better management of receivables, would
 lead to improved performance in the coming year.
 
 Your Companys diversification into Delhi Metro Rail Corporation (DMRC)
 projects provides it an huge opportunity to leverage its experience in
 similar upcoming projects and your Company shall forge ahead towards
 using this experience to make the most of the unfolding prospects in
 other cities like Mumbai, Bangalore, Hyderabad & Chennai.
 
 In the year ahead, your Company intends to diversify further across
 locations in India and across verticals through opportunities in SEZs,
 BOT projects, Highway Malls and Hotels and through its foray into new
 business areas, such as Telecom services within India and real estate
 development at offshore locations, with an office already operational
 in Singapore.
 
 ON A PARTING NOTE
 
 As we take leave of this landmark year, filled with momentous
 developments, we do it with the promise of an even better ahead.  With
 sound fundamentals to help it tackle the challenges and threats facing
 the Indian Real Estate Industry, your Company is looking ahead to newer
 levels of achievement across the whole arena of its business.
 
 And I personally look at the journey ahead with a sense of gratitude
 towards all our stakeholders and employees, without whose consistent
 efforts and backing the journey so far would not have been made
 possible. I am confident that with your continued support and
 cooperation, the success odyssey shall continue.
 
 Chairman
 Pradeep Kumar Jain