Unitech

1.  We have audited the attached Balance Sheet of Unitech Limited as at
 31st March 2008, and the related Profit and Loss Account and Cash Flow
 Statement for the year ended on that date, in which are incorporated
 the returns from Libya Branch audited by another Auditor, annexed
 thereto which we have signed under reference to this report. 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 have 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 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 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 (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 and on the basis of such checks
 of books and records of the Company as we considered appropriate and
 according to the information and explanations given to us, 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 company so far as appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the Libya Branch.
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account and with the audited returns from the branch;
 
 (iv) 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;
 
 (v) On the basis of written representations received from the
 Directors, as on 31st March, 2008 and taken on record by the Board of
 Directors, no Director is disqualified as on 31st 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;
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and schedules 1 to 16 attached thereto, give the
 information required by the Companies Act,1956 in manner so required
 and also give a true and fair view in conformity with the accounting
 principles generally accepted in India, in the case of;
 
 (a) the Balance Sheet, of the State of Affairs of the company as at
 31st March, 2008;
 
 (b) the Profit and Loss Account, of the Profit of the Company for the
 year ended on that date; and
 
 (c) 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 the Auditors Report of even date to the
 members of Unitech Limited on the financial statements for the year
 ended 31st March, 2008)
 
 In terms of information and explanations given to us and the books and
 records examined by us in the normal course of audit, we report that:
 
 (i) In respect of its fixed assets:
 
 (a) The company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 (b) The fixed assets are physically verified by the management
 according to a phased programme designed to cover all the items 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.  Pursuant to
 the programme, a portion of the fixed assets has been physically
 verified by the management during the year and certain discrepancies
 between the book records and the physical inventory have been noticed
 and properly adjusted in the books.
 
 (c) The company has not disposed off a substantial part of its fixed
 assets during the year.
 
 (ii) In respect of its inventories:
 
 (a) The inventory has been physically verified by the management in a
 phased manner during the year. In our opinion, the frequency of
 verification is reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to the book records were not material.
 
 (iii) The Company has neither granted nor accepted any loans, secured
 or unsecured to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 Accordingly, the provisions of clause 4 (iii) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and nature of its business
 with regard to purchases of inventory, fixed assets and with regard to
 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 controls.
 
 (v) According to the information and explanations provided by the
 management, we are of the opinion that there were no transactions made
 in pursuance of contracts or arrangement that need to be entered in the
 register maintained under Section 301 of the Companies Act, 1956.
 
 (vi) According to the information and explanations given to us, the
 Company has complied with the provisions of Sections 58-A & 58-AA or
 any other relevant provisions of the Companies Act, 1956 and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. No order has been passed by the
 Company Law Board or National Company Law Tribunal or Reserve Bank of
 India or any court or any other Tribunal, on the Company in respect of
 deposits accepted.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We are informed that the Central Government has not prescribed
 the maintenance of cost records for any of the Companys products under
 Section 209(l)(d) of the Companies Act, 1956.
 
 (ix) In respect of statutory dues:
 
 According to the information and explanations given to us in respect of
 statutory dues:
 
 (a) The company is regular in depositing undisputed statutory dues,
 wherever applicable with appropriate authorities during the year.
 
 (b) No undisputed amounts payable in respect of income tax, wealth tax,
 service tax, sales tax and cess were in arrears, as at 31.03.2008 for
 period of more than six months from the date they became payable.
 
 (c) The following dues have not been deposited by the company on
 account of disputes, since the appeals are pending before the relevant
 authorities:
 
 Name of the Statute       Nature of dues             Financial Year
 
 Income Tax Act, 1961    Income Tax Matter      Assessment Year 2005-06
                                        
 The Service Tax Act, 
 1994                    Service Tax Demand    August 2002 to June 2005
 
 Total                                        
 
 Amount                        Forum where dispute is pending
 (Rs. in Crores)
 
 0.74                       ; Commissioner of Income Tax (Appeals)
 2.00                         Customs, Excise and Service Tax Appellate
                              Tribunal
 2.74
 
 (x) The Company does not have any accumulated losses nor has incurred
 cash losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 (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.
 
 (xiii) 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 to the company.
 
 (xiv) The company is not dealing in or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4 (xiv) of the Companies (Auditors Report) Order 2003 are not
 applicable to the company.
 
 (xv) The company has given corporate guarantees amounting to Rs.
 2325.69 Crores for loans taken by its subsidiaries from banks and
 financial institutions. The terms and other conditions, in our opinion,
 are not prima facie prejudicial to the interest of the company.
 
 (xvi) The main business of the Company is development of Real Estate
 Projects. During the year, the Company has raised various term loans
 and have utilized the said loans interchangeably on different real
 estate projects.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of Balance Sheet of the Company, we report that
 no funds raised on short term basis have been used for long term
 investment. No Long Term funds have been used to finance short term
 assets (excluding permanent working capital).
 
 (xviii) 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.
 
 (xix) According to information and explanations given to us, during the
 period covered by our audit report, the company has issued 5250
 debentures of Rs. 1,000,000 each. The company has created security in
 respect of debentures issued.
 
 (xx) The company has not raised any money by way of Public Issue during
 the year.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                                  For Goel Garg & Co.,
                                                 Chartered Accountants
 
                                                 (J.L GARG)
                                                  Partner
                                              Membership Number: 5406
 
 Place: New Delhi
 Dated:  27th June, 2008