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Parsvnath Developers Ltd.

BSE: 532780 Sector: Infrastructure
NSE: PARSVNATH ISIN Code: INE561H01026
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VOLUME 19688
52-Week high 27.05
52-Week low 9.58
P/E
Mkt Cap.(Rs cr) 423
Buy Price 9.72
Buy Qty 84.00
Sell Price 9.77
Sell Qty 718.00
OPEN 9.88
CLOSE 9.90
VOLUME 19688
52-Week high 27.05
52-Week low 9.58
P/E
Mkt Cap.(Rs cr) 423
Buy Price 9.72
Buy Qty 84.00
Sell Price 9.77
Sell Qty 718.00

Parsvnath Developers Ltd. (PARSVNATH) - Auditors Report

Company auditors report

To The Members of Parsvnath Developers Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of ParsvnathDevelopers Limited ("the Company") which comprise the balance sheet as at 31March 2021 and the statement of Profit and Loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 March 2021 and its loss totalcomprehensive loss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India ("the ICAI") together with the ethical requirements thatare relevant to our audit of the standalone financial statements under the provisions ofthe Act and the Rules thereunder and we have fulfilled our other ethical responsibilitiesin accordance with these requirements and the ICAI's Code of Ethics. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.

Emphasis of Matters

We draw attention to the following matters in the notes to the Ind ASfinancial statements:

(i) Note 46 which indicates that the Company has incurred cash lossduring the current and previous years and there have been delays/defaults in payment ofprincipal and interest on borrowings statutory liabilities salaries to employees andpayment of other dues by the Company. The management of the Company is of the opinion thatno adverse impact is anticipated on future operations of the Company.

(ii) Note 12 which explains management position regarding utilizationof Deferred Tax Assets and Minimum Alternate Tax Credit aggregating to Rs16257.82 lacs asat 31 March 2021. Based on the management assumptions future business plans and plannedsale off some identified assets management is certain about realization of these assetsin coming years.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key audit matters How the matter was addressed in our audit
Revenue recognition
Revenue from sale of constructed properties is recognised at a ‘Point of Time' when the Company satisfies the performance obligations which generally coincides with completion/ possession of the unit. Our audit procedures on revenue recognition included the following:
Recognition of revenue at a point in time based on satisfaction of performance obligation requires estimates and judgements regarding timing of satisfaction of performance obligation allocation of cost incurred to segment/units and the estimated cost for completion of some final pending works. Due to judgement and estimates involved revenue recognition is considered as key audit matter. We have evaluated that the Company's revenue recognition policy is in accordance with Ind AS 115 and other applicable accounting standards;
We verified performance obligations satisfied by the Company;
We tested flat buyer agreements/sale deeds occupancy certificates (OC) project completion possession letters sale proceeds received from customers to test transfer of controls;
We conducted site visits during the year to understand status of the project and its construction status;
We verified calculation of revenue to be recognised and matching of related cost;
We verified allocation of common cost to units sold and estimates of cost yet to be incurred before final possession of units.
Inventories
The Company's inventories comprise of projects under construction/development (Work-in-progress) and unsold fiats (finished fiats). Our audit procedures to assess the net realisable value (NRV) of inventories included the following:
The inventories are carried at lower of cost and net realisable value (NRV). NRV of completed property is assessed by reference to market prices existing at the reporting date and based on comparable transactions made by the Company and/or identified by the Company for properties in same geographical area. NRV of properties under construction is assessed with reference to market value of completed property as at the reporting date less estimated cost to complete. The carrying value of inventories is significant part of the total assets of the Company and involves significant estimates and judgements in assessment of NRV. Accordingly it has been considered as key audit matter. We had discussions with management to understand management's process and methodology to estimate NRV including key assumptions used;
We verified project wise unsold units/area from sales department;
We tested sale price of the units with reference to recently transacted price of same or similar projects and available market information in same geographical area;
To calculate NRV of work-in-progress we verified the estimated cost to construction to complete the project.
Deferred Tax Assets (DTA)
The Company has recognised deferred tax assets (DTA) on carried forward business losses and 7unabsorbed depreciation (refer to note 12 to the financial statements) Our audit procedures included:
The Company has recognised DTA considering sale agreements executed with the customers against which revenue will get recognised in future on point of time. We have discussions with management to understand process over recording and review of deferred tax assets (DTA);
Recognition of DTA is based on future business plan and sales projections of the Company which have been approved by the audit committee and board of directors of the Company. We obtained approved business plan profitability projects of existing projects and verified mandates given for sale of some identified assets;
Since recognition of DTA on carried forward losses involves significant judgements and estimates it has been considered as key audit matter. We had discussion at separate audit committee meeting with independent directors;
We tested the computation of the amount and the tax rate used for recognition of DTA;
We also verified the disclosures made by the Company in Note 12 to the financial statements.
Investments in subsidiaries
The Company has significant investments in its subsidiary companies. These investments are carried at cost. Our audit procedures included:
Management reviews whether there are any indicators of impairment of investments. For impairment testing management has to do assessment of the cash flows of these entities and/or value of underlying assets in these entities. We compared carrying value of investment in the books of the Company with net asset value of relevant subsidiaries;
We reviewed business plan and cash flow projections of the subsidiaries and tested assumption;
Impairment assessment involves estimates and judgements in forecasting future cash flows. Accordingly it has been considered as key audit matter. In cases where cash flow projections were not available we verified valuation report of underlying assets held by these subsidiaries;
Verified that required disclosures in respect of these investments has been made in the financial statements.
Customer complaints and litigation
The Company is having various customers complaints claims and litigations for delays in execution of its real estate projects. Management estimates the possible outflow of economic resources based on legal opinion and available information on the status of the legal cases. Our audit procedures included:
We had discussion with management and understood management process for identification of claims and its quanti_cation;
We had discussion with Head of Legal department of the Company to assess the financial impact of legal cases;
Determination of amount to be provided and disclosure of contingent liabilities involves significant estimates and judgements therefor it has been considered as key audit matter. We read judgments of the courts and appeals filed by the Company;
We read minutes of the audit committee and the board of directors of the Company to get status of the material litigations;
We verified that in cases where management estimates possible flow of economic resources adequate provision is made in books of account and in other cases required disclosure is made of contingent liabilities.
Statutory dues and borrowings
The Company has incurred cash losses during the current and previous year due to recession in the real estate sector due to which the Company is facing tight liquidity situation. Our audit procedures included:
As a result there have been delays/defaults in statutory liabilities principal and interest on borrowings and other dues. We had discussion with management and understood management process for provision of interest and penalties for delays/defaults in payment of statutory dues and repayment of borrowings and interest thereon;
Defaults in payment of statutory dues and borrowings involves calculation of interest penal interest and other penalties on delayed payments and recording of liabilities. It requires significant estimates hence considered as key audit matter. For statutory dues we have verified the schedule of statutory liabilities and due date of payments. We verified calculation of interest on delayed payments;
For borrowings we verified loan agreement and sanction letters to check repayment schedule and penal interest if any. We verified calculation of interest including penal interest;
We verified disclosures made in the financial statements in respect of defaults in repayment of borrowings and interest thereon;
Defaults in payment of statutory dues is reported in Annexure A to our audit report.
Advances for land
The Company has given advances for procurement of land for construction of real estate projects. These advances are given based on agreements. Our audit procedures included:
We had discussion with management and understood management process for land acquisition;
The Company acquires land through SPVs and paid advances to SPVs for acquisition of land. We have verified the agreements and Memorandum of Understanding (MOUs) with the SPVs;
These advances are tested for recoverability. Due to significant amount and the time involved in square up of these advances it has been considered as key audit matter. We verified financial statements of these SPVs to test land held by these entities and its book value;
For advances given to third parties we have verified the agreements and had discussion with the management on timeline for land procurement.
Related party transaction and balances
The Company has transaction with related parties. These includes transaction in nature of purchase of development rights advances for land procurement security deposits from subsidiaries and loans and advances given to its subsidiaries. Our audit procedures included:
Understood Company's policies and procedures for identification of related parties and transactions;
Read minutes of the audit committee and board of directors for recording/approval of related party transactions;
These transactions are in ordinary course of business on arm length basis. Due to significance of these transactions considered as key audit matter. Tested Company's assessment regarding related party transactions are being ordinary course of business and at arm's length;
Tested transaction with underlying contracts and supporting documents;
Obtained confirmation for outstanding balances;
Verified disclosures made in the financial statements in respect of related party transactions and outstanding balances.

Information Other than the Ind AS Standalone Financial Statements andAuditor's Report thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in theDirector's Report Management Discussion and Analysis Report and Corporate GovernanceReport but does not include financial statements and our auditor's report thereon.These reports are expected to be made available to us after the date of thisauditor's report.

Our opinion on the standalone financial statements does not cover theother information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

When we read Director's Report Management Discussion and AnalysisReport and Corporate Governance Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance as required under SA 720 ‘The Auditors Responsibilities relating to otherinformation'.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing thecompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant de_ciencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen 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 including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B.

(g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of Section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the company has not paid any remuneration to its directorsduring the year.

(h) With respect to the other matters to be included in theAuditor'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 theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements – Refer Note 36 to thestandalone financial statements; ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses -Refer Note 38 to the standalone financial statements;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company – refer Note 39 to thestandalone financial statements.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm's Registration No.:000050N/N500045
Sd/-
Vinesh Jain
Partner
Membership No.: 087701
UDIN: 21087701AAAAEO8178
Place: Delhi
Date: 30 June 2021

‘Annexure A' to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of the Independent Auditor's Report of evendate to the members of Parsvnath Developers Limited on the Ind AS financial statements asat and for the year ended 31 March 2021)

i. a. The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

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

c. According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed / transferdeed / conveyance deed provided to us we report that the title deeds comprising all thefreehold immovable properties of land and buildings which are included under the heads"Property Plant and Equipment' and ‘Investment Property' are held inthe name of the Company as at the balance sheet date. In respect of immovable propertiesof land and buildings that have been taken on lease and disclosed as ‘Property Plantand Equipment' in the financial statements the lease agreements are in the name ofthe Company where the Company is the lessee in the agreement.

ii. In our opinion and according to the information and explanationsgiven to us having regard to the nature of inventory the physical verification by way ofverification of title deeds site visits by the Management and certification of extent ofwork completion by competent persons are at reasonable intervals and no materialdiscrepancies were noticed on physical verification.

iii. According to the information and explanations given to us theCompany has granted unsecured loans to companies covered in the register maintained undersection 189 of the Companies Act 2013 in respect of which:

a. The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the interest of the Company.

b. The schedule of repayment of principal and payment of interest hasnot been stipulated and in the absence of such schedule we are unable to comment on theregularity of the repayments or receipts of principal amounts and interest.

c. There is no overdue amount remaining outstanding as at the balancesheet date.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities.

v. According to the information and explanations given to us theCompany has not accepted any deposits from the public.

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

vii. According to the information and explanations given to us inrespect of statutory dues:

a. There have been significant delays in deposit of undisputedstatutory dues in respect of Tax deducted at Source and delays in deposit of ProvidentFund Employees' State Insurance Value Added Tax Goods and Service Tax (GST) Cessand other material statutory dues applicable to it to the appropriate authorities.

We are informed that the Company's operations during the year didnot give rise to any liability for Sales Tax Service Tax Customs Duty and Excise Duty.

b. Undisputed amounts payable in respect of Tax Deducted at Source(TDS) Value Added Tax and Work Contract Tax in arrears as at 31 March 2021 for a periodof more than six months from the date they became payable are as given below

Nature of dues Amount (Rs In lakhs) Period of default
Tax deducted at source 17490.51 Financial Years 2015-16 2016-17 2017-18 2018-19 and 2019-2020 and April 2020 to September 2020
Work Contract Tax (WCT) 52.18 April - June 2017
Value Added Tax (VAT) 40.27 Financial years 2008-09

We are informed that the Company's operations during the year didnot give rise to any liability for Customs Duty and Excise Duty.

c. Details of dues of Income-tax Sales Tax and Value Added Tax whichhave not been deposited as on 31 March 2021 on account of disputes are given below:

Name of statute Nature of dues Forum where the dispute is pending Period to which the amount relates Amount involved (Rs in lacs)
Haryana Value Added Tax Act 2003 Value Added Tax Member Tribunal Haryana 2008-2009 and 2014-15 139.86
UP VAT VAT Allahabad High Court 2015-16 327.63
Mumbai VAT VAT Dy. Commissioner Sales Tax (Appeals) 2007-08 to 2010-11 323.25
Income Tax Act 1961 Income Tax Income Tax Appellate Tribunal 2006-07 to 2010-11 967.09
Income Tax Act 1961 Tax deducted at Source Commissioner of Income Tax (Appeals) 2007-08 to 2016-17 198.15
Entertainment Tax Entertainment Tax JT Commissioner (Appeals) 1999-2003 4.22

There are no dues in respect of Service Tax and GST which have not beendeposited as on 31 March 2021 on account of disputes. We are informed that theCompany's operations during the year did not give rise to any Customs Duty andExcise Duty.

viii. In our opinion and according to the information and explanationsgiven to us the Company has defaulted in repayment of loans or borrowings to financialinstitutions banks and dues to debenture holders as below:

Particulars

Amount of default of repayment ( Rs in lacs)

Period of default
Principal Interest
Dues to Financial Institution:
-LIC of India 12491.13 15541.43 1 to 2646 days
Non-Banking Finance Companies 18902.92 3808.13 1-547 days
Total 31394.05 19349.56

ix. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments). In our opinion and according to theinformation and explanations given to us the term loans have been applied by the Companyduring the year for the purpose for which they were raised other than temporarydeployment pending application. x. To the best of our knowledge and according to theinformation and explanations given to us no fraud by the Company and no material fraud onthe Company by its officers or employees has been noticed or reported during the year.

xi. The Company has not paid any managerial remuneration during theyear.

xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the CARO 2016 is not applicable.

xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 188 and 177 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.

xiv. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.

xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its subsidiary or associate company or personsconnected with them and hence provisions of section 192 of the Companies Act 2013 are notapplicable.

xvi. The Company is not required to be registered under section 45-I ofthe Reserve Bank of India Act 1934.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm's Registration No.:000050N/N500045
Sd/-
Vinesh Jain
Partner
Membership No.: 087701
UDIN: 21087701AAAAEO8178
Place: Delhi
Date: 30 June 2021

‘Annexure B' to the Independent Auditor's Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' section of the Independent Auditor's Report of evendate to the members of Parsvnath Developers Limited on the Ind AS financial statements asat and for the year ended 31 March 2021)

Independent Auditor's report on the Internal Financial Controlswith reference to financial statements under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 ("the Act")

1. We have audited the internal financial controls with reference tofinancial statements of Parsvnath Developers Limited ("the Company") as of 31March 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the company's business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance

Note") and the Standards on Auditing issued by the Institute ofChartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the ICAI.. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

6. A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with referenceto Financial Statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at 31 March 2021 based on based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm's Registration No.:000050N/N500045
Sd/-
Vinesh Jain
Partner
Membership No.: 087701
UDIN: 21087701AAAAEO8178
Place: Delhi
Date: 30 June 2021

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