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Auditor Report of Parsvnath Developers Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of PARSVNATH DEVELOPERS LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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, of the state of affairs of the Company as at 31 March, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and 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 it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section I 33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31 March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 3 I March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer note 43 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIAL STATEMENTS

(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" section of our report of even date)

(i) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventory:

a) Inventory comprises finished fats and projects under construction/development (work-in-progress). As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, 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 inventories and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted unsecured loans to companies covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans:

a. In the absence of stipulations, the regularity of receipts of principal amounts and interest, wherever applicable has not been commented upon.

b. There is no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that land/development rights purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In our opinion and according to the information and explanations given to us, except for some delays in repayments during the year, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

a) The Company has been regular in depositing undisputed statutory dues in respect of Wealth tax. There have been delays in deposit of statutory dues in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax and Value Added Tax with the appropriate authorities.

We are informed that the Company's operations during the year, did not give rise to any liability for Customs Duty and Excise Duty.

b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service tax, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

We are informed that the Company's operations during the year, did not give rise to any liability for Customs Duty and Excise Duty.

c) Details of dues of Income-tax and Sales Tax which have not been deposited as on 31 March, 2015 on account of disputes are given below:

Name Nature Forum where Period to Amount of of the dispute is which the demanded statute dues pending amount relates (Rs. in lacs)

UP Trade Additional 2006-2007 294.76 Trade Tax Commissioner Tax Act, (Appeals), 1948 Moradabad

Income Income Commissioner Financial year 1,007.26 Tax Act, Tax of Income Tax 2004-05 to 1961 (Appeals) 2011-12

There are no dues of Wealth Tax, Service Tax, Value Added Tax and Cess which have not been deposited as on 31 March, 2015 on account of disputes. We are informed that the Company's operations during the year, did not give rise to any liability for Customs Duty and Excise Duty.

d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under within time.

(viii) The Company does not have accumulated losses at the end of the financial year. The Company has incurred cash losses during the financial year covered by our audit. However, the Company had not incurred cash losses in the immediately preceding financial year.

(ix) Based on the examination of the books of account and related records and according to the information and explanations given to us, 89 instances of delays were noted in repayment of dues to the banks ranging from 2 days to 90 days with amounts varying from Rs. 0.41lacs to Rs. 600.00 lacs and 63 instances of delays were noted ranging from 5 days to 365 days with amounts varying from Rs. 3.60 lacs to Rs. 300.00 lacs in repayment of dues to financial institutions and 2 instances of delays were noted ranging from 19 days to 27 days for amounts varying from Rs. 42.85 lacs to Rs. 814.28 lacs in repayment of dues to debenture holders. There are 34 instances of overdue relating to earlier years for repayment to financial institution with amount varying from Rs. 10.53 lacs to Rs. 200.00 lacs.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm's Registration No. 015125N)



Sd/-

Alka Chadha

Place: New Delhi Partner

Date: 25 May, 2015 (Membership No. 93474)


Mar 31, 2014

We have audited the accompanying financial statements of PARSVNATH DEVELOPERS LIMITED("the Company"), which comprise the Balance Sheet as at 31st March, 2014, the Statement of profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Afairs) and in accordance with the accounting principles generally accepted in India.This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the efectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements 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:

(a) in the case of the Balance Sheet, of the state of afairs of the Company as at 31st March, 2014;

(b) in the case of the Statement of profit and Loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

Attention is invited to Note 42 of the financial statements, which describes the reasons for delays in payment of principal and interest on borrowings and discharge of its statutory liabilities by the Company. The management of the Company is of the opinion that no adverse impact is anticipated on future operations of the Company.

Our opinion is not qualified in respect of this matter.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 it appears from our examination of those books.

(c) The Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifed under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Afairs).

(e) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Annexure to the independent auditors'' Report (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/ activities/results during the year, clauses (x) and (xiii) of paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fixed assets:

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 scafolding wherein, as informed to us, it is not practicable to record quantitative details in the fixed assets register.

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 has, other than shuttering and scafolding, carried out a physical verifcation of fixed assets during the year and according to the information and explanations given to us, no material discrepancies were noticed on such verifcation. In respect of shuttering and scafolding, the discrepancies, if any, cannot be determined.

c. The fixed assets disposed of during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not afected the going concern status of the Company.

(iii) In respect of its inventories:

a. Inventory comprises fnished fats and projects under construction / development (work-in-progress). As explained to us, the inventories were physically verifed during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verifcation by way of verifcation of title deeds, site visits by the management and certification of work completion by competent persons, 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 inventories and no material discrepancies were noticed on physical verifcation.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has granted unsecured loans aggregating to Rs. 2,456.33 lacs to seven Companies during the year. At the year-end, the outstanding balances of such loans granted aggregated Rs. 9,685.50 lacs (eight companies) and the maximum amount involved during the year was Rs. 14,785.60 lacs (nine Companies).

b. The rate of interest and other terms of conditions of loan granted to a subsidiary company are, in our opinion, prima facie not prejudicial to the interest of the Company. The loans granted to seven companies aggregating to Rs. 6,691.43 lacs are non-interest bearing. In our opinion and according to the information and explanations given to us, other than for loans being interest free, 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. As explained to us, repayment of principal amount was as demanded during the year and thus there is no overdue amount.

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has taken loans aggregating to Rs. 2,668.92 lacs from a director and a Company covered in the register maintained under section 301 of the Companies Act, 1956. At the year-end, the outstanding balance of such loans aggregated Rs. 42.72 lacs and the maximum amount involved during the year was Rs. 2,167.28 lacs.

b. The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

c. The payments of principal amounts and interest in respect of such loans are as per stipulations.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that land/development rights purchased are of special nature and alternative sources are not available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the Register maintained under the said Section have been so entered.

b. Where each of such transaction is in excess ofRs. 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company LawTribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us, in respect of statutory dues:

a. The Company is regular in depositing undisputed statutory dues pertaining to Wealth Tax and Investor Education and Protection Fund. There have been delays in deposit of statutory dues in respect of Provident Fund, Employees'' State Insurance, Income Tax, Tax Deducted at Source, Sales Tax and Service Tax with the appropriate authorities during the year. We are informed that the Company''s operations, during the year, did not give rise to any liability for Excise Duty and Customs Duty. There are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty. However, undisputed amount in respect of Income Tax of Rs. 10,574.00 lacs for the year ended 31 March, 2012, Rs. 6,131.00 lacs for the year ended 31 March, 2013 and Advance Income Tax ofRs. 709.92 lacs for the year ended 31 March, 2014, have remained outstanding as on 31 March, 2014 for more than six months from the date they became payable.

b. Details of dues of Income Tax and Sales Tax which have not been deposited as on 31 March, 2014 on account of disputes are given below:

Name of Nature Amount Period to Forum where statute of dues demanded which the the dispute is (Rs.in lacs) amount pending relates

UP Trade Trade Tax 1,771.40 2006-2007 Additional Tax Act, Commissioner 1948 (Appeals), Moradabad

Income Income 867.88 Financial year Commissioner Tax Act, Tax 2004-05 to of Income Tax 1961 2011-12 (Appeals)

We are informed that there are no dues in respect of Wealth Tax, Service Tax, Excise Duty, Custom Duty and Cess which have not been deposited on account of any dispute.

(xi) Based on the examination of the books of account and related records and according to the information and explanations given to us, 94 instances of delays were noted in repayment of dues to the banks ranging from 1 day to 109 days with amounts varying from Rs. 1.22 lacs to Rs. 1,250.00 lacs and 72 instances of delays were noted ranging from 1 day to 365 days with amounts varying from Rs. 5.47 lacs to Rs. 500.00 lacs in repayment of dues to financial institutions and 21 instances of delays were noted ranging from 1 day to 207 days for amounts varying from Rs. 20.37 lacs to Rs. 3,125.00 lacs in repayment of dues to debenture holders.

(xii) 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.

(xiii) 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.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xvi) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

(xvii) 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.

(xviii) According to the information and explanations given to us, during the year covered by our audit report, the Company has issued 6,000 debentures ofRs. 1.00 lakh each. The Company has created security in respect of debentures issued.

(xix) The Company has not raised any money by public issues during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 015125N)

Sd/-

ALKA CHADHA

New Delhi Partner

28 May, 2014 (Membership No. 93474)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of PARSVNATH DEVELOPERS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March , 2013, the Statement of Profi t and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fi nancial statements 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) in the case of the Statement of Profi t and Loss, of the profi t of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fl ows of the Company for the year ended on that date.

Emphasis of Matter

Attention is invited to note 44 of the fi nancial statements which describes the reasons for delays in payment of principal and interest on borrowings and discharge of its statutory liabilities by the Company. The management of the Company is of the opinion that no adverse impact is anticipated on future operations of the Company.

Our opinion is not qualifi ed in respect of this matter.

Report on Other Legal and Regulator y Requirements 1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, 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 it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profi t and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profi t and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualifi ed as on 31st

March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act

(i) Having regard to the nature of the Company''s business/ activities/results during the year, clauses (x) and (xiii) of paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fi xed assets:

a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fi xed assets, except in respect of shuttering and scaffolding wherein, as informed to us, it is not practicable to record quantitative details in the fi xed assets register.

b. According to the information and explanations given to us, the Company has a programme of physically verifying its fi xed 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 has, other than shuttering and scaffolding, carried out a physical verifi cation of fi xed assets during the year and according to the information and explanations given to us, no material discrepancies were noticed on such verifi cation. In respect of shuttering and scaffolding, the discrepancies, if any, cannot be determined.

c. The fi xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fi xed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

a. Inventory comprises fi nished fl ats and projects under construction/development (work-in-progress). As explained to us, the inventories were physically verifi ed during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verifi cation by way of verifi cation of title deeds, site visits by the management and certifi cation of work completion by competent persons, 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 inventories and no material discrepancies were noticed on physical verifi cation.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, fi rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has granted unsecured loans aggregating to Rs. 593.85 lacs to four Companies (its subsidiaries) during the year. At the year-end, the outstanding balances of such loans granted aggregated Rs. 12,237.39 lacs (four companies) and the maximum amount involved during the year was Rs. 12,242.13 lacs (fi ve Companies).

b. The rate of interest and other terms of conditions of loan granted to a subsidiary company are, in our opinion, prima facie not prejudicial to the interest of the Company. The loans granted to three companies aggregating to Rs. 9,638.92 lacs are non-interest bearing. In our opinion and according to the information and explanations given to us, other than for loans being interest free, 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. As explained to us, repayment of principal amount was as demanded during the year and thus there is no overdue amount.

In respect of loans, secured or unsecured, taken by the Company from companies, fi rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has taken loans aggregating to Rs. 6,046.14 lacs from a director and a Company covered in the register maintained under section 301 of the Companies Act, 1956. At the year-end, the outstanding balance of such loans aggregated Rs. 199.63 lacs and the maximum amount involved during the year was Rs. 4,187.81 lacs.

b. The rate of interest and other terms and conditions of such loans are, in our opinion, Prima facie, not prejudicial to the interests of the Company.

c. The payments of principal amounts and interest in respect of such loans are as per stipulations.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that land/development rights purchased are of special nature and alternative sources are not available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fi xed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the Register maintained under the said Section have been so entered.

b. Where each of such transaction is in excess of Rs. 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost

Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us, in respect of statutory dues:

The Company is regular in depositing undisputed statutory dues pertaining to Customs Duty and Wealth Tax. There have been delays in deposit of statutory dues in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax and Cess with the appropriate authorities during the year. We are informed that the Company''s operations, during the year, did not give rise to any liability for Excise Duty and Investor Education and Protection Fund. There are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty. However, undisputed amount in respect of Income Tax of Rs. 11,535.91 lacs for the year ended 31 March, 2012 and Advance Income Tax of Rs. 2,271.98 lacs for the year ended 31 March, 2013, have remained outstanding as on 31 March, 2013 for more than six months from the date they became payable.

We are informed that there are no dues in respect of Wealth Tax, Service Tax, Excise Duty, Custom Duty and Cess which have not been deposited on account of any dispute.

(xi) Based on the examination of the books of account and related records and according to the information and explanations given to us, 86 instances of delays were noted in repayment of dues to the banks ranging from 1 day to 90 days with amounts varying from Rs. 4.73 lacs to Rs. 282.00 lacs and 69 instances of delays were noted ranging from 1 day to 181 days with amounts varying from Rs. 7.21 lacs to Rs. 500.00 lacs in repayment of dues to fi nancial institutions and 35 instances of delays were noted ranging from 1 day to 180 days for amounts varying from Rs. 41.12 lacs to Rs. 2,500.00 lacs in repayment of dues to debenture holders.

(xii) 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.

(xiii) 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.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks and fi nancial institutions are not, prima facie, prejudicial to the interests of the Company.

(xv) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xvi) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

(xvii) 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.

(xviii) According to the information and explanations given to us, during the year covered by our audit report, the Company has not issued any debentures.

(xix) The Company has not raised any money by public issues during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS Chartered Accountants

(Firm Registration No. 015125N)

Sd/-

JITENDRA AGARWAL

New Delhi Partner

28 May, 2013 (Membership No. 87104)


Mar 31, 2012

1. We have audited the attached Balance Sheet of Parsvnath Developers Limited ("the Company") as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. 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 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 the 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 (CARO) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose 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 as follows:

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 it appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956;

e. in our opinion and to the best of our information and according to the explanations given to us, the said accounts 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, 2012;

ii. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of written representations received from directors, as on 31 March, 2012 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March, 2012 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/ activities/result clauses (x) and (xiii) of CARO are not applicable

(ii) In respect of its fixed assets:

a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of the fixed assets, except in respect of shuttering and scaffolding wherein, as informed to us, it is not practicable to record quantitative details in the fixed assets register.

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 has, other than shuttering and scaffolding, carried out a physical verification of fixed assets during the year and no material discrepancies were noticed on such verification. In respect of Shuttering and Scaffolding, the discrepancies, if any, cannot be determined.

c. The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

a. Inventory comprises finished flats and projects under construction/development (work-in-progress). As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were 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 inventories and no material discrepancies were noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has granted unsecured loans aggregating Rs.4,976.82 lacs to five Companies (its subsidiaries) during the year. At the year-end, the outstanding balances of such loans (to four companies) aggregated Rs.9,050.11 lacs and the maximum amount involved during the year was Rs.11,238.85 lacs (five Companies).

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. As explained to us, repayment of principal amount was as demanded during the year and thus there is no overdue amount.

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has taken loans aggregating Rs.4501.73 lacs from a director and a Company covered in the register maintained under section 301 of the Companies Act, 1956. At the year-end, the outstanding balance of such loans aggregated Rs.255.18 lacs and the maximum amount involved during the year was Rs.3,998.14 lacs.

b. The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

c. 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.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that land/development rights purchased are of special nature and alternative sources are not available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the Register maintained under the said Section have been so entered.

b. Where each of such transaction is in excess of Rs.5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 with regard to deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us and the records of the Company examined by us:

a. The Company is regular in depositing its undisputed statutory dues pertaining to Customs Duty and Wealth Tax. There have been delays in deposit of statutory dues in respect of Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax and Cess with the appropriate authorities during the year. Other than for undisputed amount of Income Tax of Rs.1,686.07 lacs for the year ended 31 March, 2011 and Advance Income Tax of Rs.834.90 lacs for the year ended 31 March, 2012, there are no undisputed amount payable in respect of statutory dues which have remained outstanding as on 31 March, 2012 for more than six months from the date they became payable. The undisputed dues of Income Tax for the year ended 31 March, 2011 have been deposited subsequent to year-end. We are informed that the Company's operations, during the year, did not give rise to any liability for Excise Duty and Investor Education and Protection Fund.

b. The dues of Sales Tax which have not been deposited by the Company on account of various disputes are as follows:

Name of Nature Amount Period Forum where statute of dues demanded to which the dispute is (Rs. in lacs) the pending amount relates

UP Trade 37.52 2003- Additional Trade Tax 2004 Commissioner Tax Act, (Appeals), 1948 Moradabad

UP Trade 2,014.50 2006- Additional Trade Tax 2007 Commissioner Tax Act, (Appeals), 1948 Moradabad

We are informed that there are no dues in respect of Income Tax, Wealth Tax, Service Tax, Excise Duty and Custom Duty which have not been deposited on account of any dispute.

(xi) Based on the examination of the books of account and related records and according to the information and explanations given to us, 47 instances of delays were noted in repayment of dues to the banks ranging from 1 day to 120 days with amounts varying from Rs.35.85 lacs to Rs.313.00 lacs and 23 instances of delays were noted ranging from 3 days to 365 days with amounts varying from Rs.430.00 lacs to Rs.1,250.00 lacs in repayment of dues to financial institutions and 6 instances of delays were noted ranging from 6 to 146 days for amount of Rs.250.00 lacs in repayment of dues to debenture holders.

(xii) 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.

(xiii) 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.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies are not prima facie prejudicial to the interests of the Company.

(xv) 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, other than temporary deployment pending application.

(xvi) According to the information and explanations provided to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have prima facie, not been used during the year for long term investment.

(xvii) 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.

(xviii) According to the information and explanations given to us, during the year covered by our audit report, the Company has not issued any debentures.

(xix) The Company has not raised any money by public issues during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 015125N)

Sd/-

JITENDRA AGARWAL

Partner New Delhi, 30 May, 2012 (Membership No. 87104)


Mar 31, 2011

1. We have audited the attached Balance Sheet of Parsvnath Developers Limited ("the Company") as at 31 March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. 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 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 the 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 (CARO) issued by the Central Government of India in terms of Section 227(4A) 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 as follows:

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 it appears from our examination of those books;

c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e. in our opinion and to the best of our information and according to the explanations given to us, the said accounts 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, 2011;

ii. in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of written representations received from directors, as on 31 March, 2011 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

Annexure To The Auditors' Report (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/ activities/result clauses (x) and (xiii) of CARO are not applicable.

(ii) In respect of its fixed assets:

a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of the fixed assets, except in respect of shuttering and scaffolding wherein, as informed to us, it is not practicable to record quantitative details in the fixed assets register.

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 has, other than shuttering and scaffolding, carried out a physical verification of fixed assets 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. The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

a. Inventory comprises finished flats and projects under construction / development (work-in-progress). As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were 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 inventories and no material discrepancies were noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has granted unsecured loans aggregating Rs.915.98 lacs to two Companies (its subsidiaries) during the year. At the year-end, the outstanding balances of such loans (to four companies) aggregated Rs.5,752.64 lacs and the maximum amount involved during the year was Rs.10,242.90 lacs (Nine Companies).

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.

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a. The Company has taken loans aggregating Rs.16,296.68 lacs from a director, a relative of the director and a Company covered in the register maintained under Section 301 of the Companies Act, 1956. At the year- end, the outstanding balance of such loans taken aggregated Rs.876.96 lacs and the maximum amount involved during the year was Rs.10,027.19 lacs.

b. The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company.

c. 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.

(v) 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 with regard to purchase of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the Register maintained under the said Section have been so entered.

b. Where each of such transaction is in excess of Rs.5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 with regard to deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(ix) 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.

(x) According to the information and explanations given to us and the records of the Company examined by us:

a. The Company is regular in depositing its undisputed statutory dues pertaining to Wealth Tax. There have been delays in deposit of statutory dues in respect of Provident Fund, Employees' State Insurance, Income Tax, Sales Tax and Cess with the appropriate authorities during the year. There are no undisputed amounts payable in respect of these statutory dues other than installments of advance Income Tax of Rs.1031.19 lacs, which remained outstanding as at 31 March 2011 for a period of more than six months from the date it became payable. We are informed that the Company's operations, during the year, did not give rise to any liability for Excise Duty, Custom Duty and Investor Education and Protection Fund and no Service Tax is required to be deposited due to input credit availed by the Company.

b. The dues of Sales Tax which have not been deposited by the Company on account of various disputes are as follows:

Name of Statute Nature of Amount Period to which the amount Forum where the dispute is pending Dues Demanded relates (Rs. in lacs)

UP Trade Tax Act, 1948 Trade Tax 37.52 2003-2004 Additional Commissioner (Appeals), Moradabad

UP Trade Tax Act, 1948 Trade Tax 1,267.22 2004-2005 Additional Commissioner (Appeals), Moradabad

UP Trade Tax Act, 1948 Trade Tax 2,014.50 2006-2007 Additional Commissioner (Appeals), Moradabad

UP Trade Tax Act, 1948 Trade Tax 1,836.30 2007-2008 Additional Commissioner (Appeals), Moradabad

Uttar Pradesh Value Value added 537.60 2007-2008 Additional Commissioner (Appeals), Added Tax Act, 2008 Tax Moradabad

Central Sales Tax Central 0.80 2007-2008 Additional Commissioner (Appeals), Act, 1956 SalesTax Moradabad

We are informed that there are no dues in respect of Income Tax, Wealth Tax, Service Tax, Excise Duty and Custom Duty which have not been deposited on account of any dispute.

(xi) Based on the examination of the books of account and related records and according to the information and explanations given to us, 93 instances of delays were noted in repayment of dues to the banks ranging from 1 day to 151 days with amounts varying from Rs.24.26 lacs to Rs.1,250.00 lacs and 37 instances of delays were noted ranging from 7 day to 214 days with amounts varying from Rs.100.00 lacs to Rs.1,250.00 lacs in repayment of dues to financial institutions. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to debenture holders.

(xii) 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.

(xiii) 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.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies are not prima facie prejudicial to the interests of the Company.

(xv) 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, other than temporary deployment pending application.

(xvi) According to the information and explanations provided to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have prima facie, not been used during the year for long term investment.

(xvii) 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.

(xviii) The Company has created securities in respect of secured non-convertible debentures issued.

(xix) We have verified the end use of the money raised through 'Qualified Institutional Placement' (QIP) as disclosed in Note 8b of Schedule 'T' forming part of the financial statements.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 015125N)

Sd/-

New Delhi JITENDRA AGARWAL

30 May, 2011 Partner

(Membership No. 87104)









 
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