1.  We have audited the attached Balance Sheet of Puravankara Projects
 Limited (''the Company''), as at 31 March 2012, and also the Statement of
 Profit and Loss and the Cash Flow Statement for the year ended on that
 date, annexed thereto (collectively referred as the ''financial
 statements''). These financial statements are the responsibility of the
 Company''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 misstatement. 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 (Auditor''s Report) Order, 2003 (''the
 Order'') (as amended) issued by the Central Government of India in terms
 of sub-section (4A) of Section 227 of the Companies Act, 1956 (''the
 Act''), we enclose in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to 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 financial statements dealt with by this report are in agreement
 with the books of account;
 
 (d) On the basis of written representations received from the
 directors, as on 31 March 2012 and taken on record by the Board of
 Directors, none of the directors are disqualified as on 31 March 2012
 from being appointed as a director in terms of clause (g) of sub-
 section (1) of Section 274 of the Act;
 
 (e) In our opinion and to the best of our information and according to
 the explanations given to us, the financial statements dealt with by
 this report comply with the accounting standards referred to in
 sub-section (3C) of Section 211 of the Act and 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, in the case of:
 
 (i) the Balance Sheet, of the state of affairs of the Company as at 31
 March 2012;
 
 (ii) the Statement of Profit and Loss, of the profit for the year ended
 on that date; and
 
 (iii) the Cash Flow Statement, of the cash flows for the year ended on
 that date.
 
 
 Annexure to the Independent Auditors'' Report of even date to the
 members of Puravankara Projects Limited, on the financial statements
 for the year ended 31 March 2012.
 
 Based on the audit procedures performed for the purpose of reporting a
 true and fair view on the financial statements of the Company and
 taking into consideration the information and explanations given to us
 and the books of account and other records examined by us in the normal
 course of audit, we report that:
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets
 
 (b) The Company has a regular program of physical verification of its
 fixed assets under which fixed assets are verified in a phased manner
 over a period of three years which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 No material discrepancies were noticed on such verification.
 
 (c) In our opinion, a substantial part of fixed assets has not been
 disposed off during the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) The Company has granted unsecured loans to fifteen parties
 covered in the register maintained under Section 301 of the Act. The
 maximum amount outstanding during the year was Rs. 2,252,267,795 and the
 year-end balance was Rs. 2,149,618,318.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not, prima facie, prejudicial to the interest of the
 Company.
 
 (c) The principal amounts, are repayable on demand and there is no
 repayment schedule, the payment of interest, where applicable, has been
 regular.
 
 (d) There is no overdue amount in respect of loans granted to such
 companies, firms or other parties.
 
 (e) The Company has taken unsecured loans from four parties covered in
 the register maintained under Section 301 of the Act. The maximum
 amount outstanding during the year was Rs. 462,482,288 and the year-end
 balance was Rs. 325,859,189.
 
 (f) In our opinion, the rate of interest and other terms and conditions
 of loans taken by the Company are not, prima facie, prejudicial to the
 interest of the Company.
 
 (g) The principal amounts, are repayable on demand and there is no
 repayment schedule.
 
 (iv) In our opinion, 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, no major
 weakness has been noticed in the internal control system in respect of
 these areas.
 
 (v) (a) In our opinion, the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 Section 301 of the Act have been so entered.
 
 (b) Owing to the unique and specialized nature of the items involved
 and in the absence of any comparable prices, we are unable to comment
 as to whether the transactions made in pursuance of such contracts or
 arrangements have been made at prevailing market prices at the relevant
 time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the Companies
 (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
 clause 4(vi) of the Order are not applicable.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 (viii) According to the information and explanations given to us, the
 companies (Cost Accounting Records) Rules 2011 have become applicable
 to the Company for its real estate operations during the current year,
 however, no specific formats for the maintenance of the cost records in
 respect of the real estate projects have been prescribed under the said
 rules. In terms of the clarification from the MCA vide F. No.
 52/1/CAB/-2012, the Company believes that the current records available
 with the company provide the information required under the rules. We
 have broadly reviewed the books of account maintained by the Company
 pursuant to the Rules made by the Centra Government for the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act in respect of its real estate operation, and are of the opinion
 that, prima facie, the prescribed accounts and records have been made
 and maintained.  However, we have not made a detailed examination of
 the cost records with a view to determine whether they are accurate or
 complete.
 
 (ix) (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, employees'' state insurance, income-tax,
 sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and
 other material statutory dues, as applicable, have generally been
 regularly deposited with the appropriate authorities, though there has
 been a slight delay in a few cases. No undisputed amounts payable in
 respect thereof were outstanding at the year-end for a period of more
 than six months from the date they became payable.
 
 (b) The dues outstanding in respect of sales-tax, income- tax, custom
 duty, wealth-tax, excise duty, cess on account of any dispute, are as
 follows:
 
 Name of the 
 statute            Nature of 
                    dues                       Amount (Rs.)
 
 Chapter V 
 of the             Service Tax 
                   (including interest         17,100,000
 Finance Act,
 1994               & penalty)
 
 Chapter V of 
 the Finance        Service Tax (including     29,330,204
 Act, 1994          interests penalty)
 
 The Karnataka 
 Value              Value Added Tax 
                   (including                  16,394,243
 Added Tax Act      interest & penalty)       (Rs. 8,197,122 is paid
                                               under protest)
 
 The Karnataka 
 Value              Value Added Tax 
                   (including                   5,928,221
 Added Tax Act      interest & penalty)        (Rs. 2,965,000 is paid
                    under protest)
 
 The Karnataka 
 Value              Value Added Tax 
                   (including                  13,632,722
 Added Tax Act      interest & penalty)       (Rs. 6,816,361 is paid
                    under protest)
 
 The Karnataka 
 Value              Value Added Tax
                   (including                   3,313,935
 Added Tax Act      interest & penalty)        (Rs. 1,656,968 is paid
                    under protest)
 
 The Karnataka 
 Value              Value Added Tax 
                   (including                   2,128,120
 Added Tax Act      interest & penalty)        (Rs. 1,064,060 is paid
                    under protest)
 
 Name of the Statute     Period to which the     Forum where
                         amount relates          dispute is pending
 
 Chapter V 
 of the                  2001 to 2006            Customs, Excise 
                                                 and Service
 Finance Act, 1994                               Tax Appellate Tribunal
 
 Chapter V of 
 the Finance             2007-2008               Customs, Excise &
                                                 Service
 Act, 1994                                       Tax Appellate Tribunal,
                                                 Bangalore
 
 The Karnataka 
 Value                   April 2005 to           Joint Commissioner
 Added Tax Act           September 2005         (Appeals)
 
 The Karnataka 
 Value                   October 2005 to         Joint Commissioner
 Added Tax Act           March 2006             (Appeals)
 
 The Karnataka 
 Value                   2006-07                 Joint Commissioner
 Added Tax Act                                  (Appeals)
 
 The Karnataka 
 Value                   2008-09                 Joint Commissioner
 Added Tax Act                                  (Appeals)
 
 The Karnataka 
 Value                   2009-10                 Joint Commissioner
 Added Tax Act                                  (Appeals)
 
 (x) In our opinion, the Company has no accumulated losses at the end of
 the financial year and it has not incurred cash losses in the current
 and the immediately preceding financial year.
 
 (xi) In our opinion, the Company has not defaulted in repayment of dues
 to a financial institution or a bank or debenture-holders during the
 year.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities. Accordingly, the provisions of clause 4(xii) of the Order
 are not applicable.
 
 (xiii) 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 Order are not applicable.
 
 (xiv) In our opinion, the Company is not dealing or trading in shares,
 securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable.
 
 (xv) The Company has not given any guarantees for loans taken by others
 from banks or financial institutions.  Accordingly, the provisions of
 clause 4(xv) of the Order are not applicable.
 
 (xvi) In our opinion, the Company has applied the term loans for the
 purpose for which these loans were obtained.
 
 (xvii) In our opinion, no funds raised on short-term basis have been
 used for long-term investment.
 
 (xviii) During the year, the Company has not made any preferential
 allotment of shares to parties or companies covered in the register
 maintained under Section 301 of the Act. Accordingly, the provisions of
 clause 4(xviii) of the Order are not applicable.
 
 (xix) The Company has created security in respect of debentures issued
 during the year.
 
 (xx) The Company has not raised any money by public issues during the
 year. Accordingly, the provisions of clause 4(xx) of the Order are not
 applicable.
 
 (xxi) No fraud on or by the Company has been noticed or reported during
 the period covered by our audit.
 
 
                                        For Walker, Chandiok & Co
 
                                            Chartered Accountants
 
                                   Firm Registration No.: 001076N
     
                                          per Aashish Arjun Singh
 
 Bangalore                                                Partner
 
 8 May 2012                                Membership No.: 210122