Chamberlain Unitech Single Sides · townships, residential complexes, commercial office space, IT Parks and SEZ developments, retail developments, hotels and amusement parks. From

www.unitechcorporateparks.com

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Company Information 1

Chairman’s Statement 9

Investment Manager’s Review 16

Directors’ Report 21

Statement of Directors’ Responsibilities 22

Corporate Governance Statement 23

Independent Auditor’s Report 24

Consolidated Income Statement 25

Consolidated and Company Balance Sheets 26

Consolidated and Company Statements of Changes in Equity 27

Consolidated Cash Flow Statement 28

Notes to the Consolidated Financial Statements 29

01.

Directors (all non-executive;* independent)Atul Kapur (Chairman) *Aubrey John Adams *Ajay ChandraMohammad Yousuf Khan *Donald Lake *

Company SecretaryElizabeth Tansell

Registered Office3rd Floor Exchange House54 - 62 Athol StreetDouglasIsle of Man IM1 1JD

Investment ManagerNectrus LimitedIfigeneias 7, 4th FloorStrovolosNicosiaCyprus

Administrator and RegistrarChamberlain Fund Services Limited3rd Floor Exchange House54 - 62 Athol StreetDouglasIsle of Man IM1 1JD

Crest Service ProviderCapita Registrars (Jersey) LimitedVictoria ChambersLiberation Square1/3 The EsplanadeSt. HelierJersey

AuditorsKPMG Audit LLCHeritage Court39 - 41 Athol StreetDouglasIsle of Man IM99 1HN

Nominated Advisor and BrokerDeutsche Bank AG,London BranchWinchester House1 Great Winchester StreetLondon EC2N 2DB

Legal Advisers (Isle of Man law)Cains Advocates Limited15-19 Athol StreetDouglasIsle of Man IM1 1LB

Legal Advisers (Cypriot law)Chrysses Demetriades & CoFortuna Court284 Makarios III AvenueLimasol 3105Cyprus

Legal Advisers (UK and US law)Skadden, Arps, Slate, Meagher &Flom (UK) LLP40 Bank StreetCanary WharfLondon E14 5DS

Legal Advisers (Mauritian law)De Comarmond & Koenig5th Floor Chancery HouseLislet Geoffroy StreetPort LouisMauritius

Legal Advisers (Indian law)Luthra & Luthra Law Offices103 Ashoka EstateBarakhamba RoadNew Delhi 110001

Company Information


annual report 2007

02.

Unitech Corporate Parks Plc (“UCP”) is acompany incorporated in the Isle of Man inSeptember 2006, with the initial businessstrategy of making investment(s), in Indiancommercial real estate, that is being developedspecifically for the high growth IT (InformationTechnology) and ITES (Information TechnologyEnabled Services) sectors.

UCP intends to focus on making investments inSpecial Economic Zones (“SEZs”) dedicated tothe IT and ITES industries (IT SEZs) or IT Parks,which are suitable for foreign direct investment(“FDI”) in India.

UCP intends to co-invest along with UnitechLimited and its affiliates (“Unitech Group”),which is one of India’s leading developers.

The Unitech Group will provide investmentadvisory services to UCP and also render projectmanagement services to the Seed Portfolioprojects. As a result of these arrangements, UCPwill have access to the considerable experienceof the Unitech Group.

Tracking its history back to 1971, Unitech Grouphas over 30 years’ experience in theconstruction and real estate developmentbusiness in India, Unitech Limited is listed onthe Bombay Stock Exchange Limited and theNational Stock Exchange Limited in India. TheUnitech Group’s real estate portfolioencompasses the development of integratedtownships, residential complexes, commercialoffice space, IT Parks and SEZ developments,retail developments, hotels and amusementparks. From its beginnings as a real estatedeveloper focusing on the NCR, the UnitechGroup has expanded its operations to othermajor cities in India including Kolkata,Hyderabad, Bangalore, Kochi, Chennai,Lucknow, Varanasi, Chandigarh and Agra.

UCP intends to invest in the development ofreal estate projects in India, including IT SEZs*and IT Parks aimed specifically at the IT andITES industries. The trend towards businessprocess outsourcing (“BPO”), particularly by theIT and ITES industries has created considerablegrowth in these sectors in India. This growthhas led to an increased demand for office spaceto cater for IT and ITES businesses.

* SEZs are areas approved by the Government of India in order toencourage the generation of additional economic activity, the exportof goods and services, domestic and foreign investment and thedevelopment of infrastructure facilities. UCP aims to invest in IT SEZdevelopments as it believes that prospective tenants will be attractedby the fiscal benefits afforded to the occupants located in such zones.

is a listed vehicle for investing in Indian Commercial Real Estate

03.

The Group Structure


annual report 2007

04.

The management of UCP vests in itsBoard of Directors, which isresponsible for the overallmanagement of the Company andthe Group as well as the formulationand implementation of theCompany’s investment strategy.

The Board comprises of 5 (five)non-executive Directors viz.:

1. Atul Kapur, Chairman2. Aubrey John Adams3. Ajay Chandra4. Mohammad Yousuf Khan5. Donald Lake

Management of the company

05.

ATUL KAPUR

Atul Kapur is aged 43 years andholds a degree from theUniversity of Delhi and is also aqualified Chartered Accountant.He is currently the ManagingPartner of Auricman Capital LLP,which advises Private EquityFunds in India.

Previously, Mr. Kapur was aManaging Director at GoldmanSachs International between2000 and 2006 and wasresponsible for European andIndian private equityinvestments within theEuropean Principal StrategiesGroup. He has also worked fornine years in the PrincipalInvestments area of GoldmanSachs in Hong Kong, Singaporeand London.

AUBREY JOHN ADAMS

He is aged 57 and is a Fellowof the Institute of CharteredAccountants in England andWales and he also holds aMaster’s degree from theUniversity of Cambridge. He iscurrently a Director of theWigmore Hall Trust.

He worked forPricewaterhouseCoopers in theAudit and ManagementConsultancy divisions from1970 to 1979. He wasappointed as the Group ChiefExecutive of Savills Plc in 2000having previously served asFinance Director (1990-1991)and then Managing Directorbetween 1991 and 2000. Mr.Adams was a non ExecutiveDirector of Associated BritishPorts between 1996 and 2006.

AJAY CHANDRA

He is aged 39 years and has aBachelor’s degree in CivilEngineering from CornellUniversity, USA and a Master’sdegree in BusinessAdministration from theUniversity of North Carolina,USA. He is currently theManaging Director of UnitechLimited, which is the largestlisted Real Estate developer inIndia. He is responsible for allof Unitech Limited’s real estateactivities in the Eastern,Southern and Western regionsof India and also for UnitechLimited’s expansion intoamusement and entertainmentparks across India.

Between 1992 and 1993, Mr.Chandra worked as an EquityAnalyst for Jardine Fleming.


annual report 2007

06.

MOHAMMAD YOUSUF KHAN

Aged 62, holds an honorarydoctorate degree in BusinessManagement from BurkesUniversity and a degree inScience from the University ofKashmir. He is currently theChairman of the Banking andAdvisory Council for Yes BankLimited. He is also a Directorof Bharat Hotels in India anda Senior Advisor to Berenson& Company.

Previously, he has held thepositions of Chairman of J&KBank, Managing Director of J&KAgro Industries DevelopmentCorporation and ManagingDirector of J&K TourismDevelopment Corporation.

DONALD LAKE

He is aged 62 and is a Fellowmember of The RoyalInstitution of CharteredSurveyors. He has over thirtyyears’ experience in thedevelopment of commercialand residential buildingprojects and has worked on asignificant number of projectsin the UK, Channel Islands andIsle of Man. Mr. Lake is also aDirector of four other listedcompanies, Close High IncomeProperties PLC (listed on theLondon Stock Exchange plc),Equest Balkan Properties PLC(listed on the AlternativeInvestment Market operatedby the London Stock Exchangeplc), Business Centre PropertiesPLC (listed in the ChannelIslands) and Healthcare andLeisure Property Fund PLC(listed in the Channel Islands).

A learned man is not learned

in all things, but an able man

is able in all, even in

ignorance.

Montaigne

Board of Directors

07.

Following admission, UCP has invested theproceeds in the following seed portfolioprojects, comprising of six IT or ITES relatedprojects, five of which are located in theNational Capital Region (“NCR”, being thearea surrounding Delhi, India) and one ofwhich is located in Kolkata, India.

(a) Infospace, Gurgaon (G1-ITC)

(b) Infospace, Dundahera, Gurgaon (G2-IST)

(c) Infospace, Sector 62, Noida (N1)

(d) Infospace, Sector 135, Noida (N2)

(e) Infospace, Greater Noida (N3)

(f) Infospace, Kolkata (K1)


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08.

Perspective View -Infospace, Kolkata

Basement Facilities -Infospace, Kolkata

Actual Shot -Infospace, Gurgaon

Aerial View -Infospace, Greater Noida

Perspective -Infospace, Greater Noida

Aerial View -Infospace, Noida Sector 62

Actual Shot - Infospace, Noida Sector 62

Site - Infospace, Noida Sector 132

Perspective -Infospace, Noida Sector 132

09.

Chairman's Statement

It is my privilege to report UCP's results for theperiod ended 31 March 2007, UCP's first set ofresults since its successful Admission to the AIMmarket ("Admission") of the London StockExchange in December 2006, through which itraised a net amount of £347 million afterissue expenses.

As at 31 March 2007, UCP had already investedapproximately £317 million (91%) of its initialnet funds, evidence of significant progress andconsistent with the Company's originalinvestment objectives.

I am also pleased to update Shareholders onthe ongoing substantial progress made byyour Company in the period since the balancesheet date.

Results

Net investment income for the period was£2.7 million.

Adjusted NAV as of 31 March 2007 was £1.2974per share.

NAV as of 31 March 2007 was £1.0184 per sharecompared to £0.9626 per share at the time ofAdmission. This represents a rise of 5.8% overthe three months from Admission.

Adjusted NAV excludes the impact of thedeferred tax provision on the net assets of theCompany and is considered by the Board to be amore appropriate method of evaluating theperformance of the Company than NAV. TheBoard considers the provision of deferred tax atechnical accounting issue and does not believethat a material tax liability will arise on acorrectly structured sale of the Company's

assets. See note 10 of the accompanyingfinancial statements for further information onthe deferred tax provision.

As previously announced to Shareholders,Jones Lang LaSalle (“JLL”), an independentvaluer, completed the valuation of theCompany’s properties as at 31 March 2007.The Board of UCP is pleased to report,therefore, that the total market valuation ofthe six assets in the Company’s portfolio ("SeedPortfolio Assets") including construction costsand based on the exchange rate on 31 March2007, is £553.0 million, compared to £481.5million at Admission. UCP’s ownership of 60%of these projects is therefore valued at £331.8million compared to £288.9 million at the timeof Admission.

As at 31 March 2007, the Group held £110million of cash.

As stated in the Admission document, theDirectors have not proposed a dividend inrespect of the period ended 31 March 2007. TheDirectors will consider the payment of dividendswhen, in their opinion, it becomes commerciallyprudent to do so.

Strategy

UCP was formed to invest in Indian commercialreal estate, targeting the real estaterequirements of the high growth Indian IT andIT Enabled Services (“ITES”) sectors. TheCompany is focused on investment in SpecialEconomic Zones (“SEZs”) dedicated to the ITand ITES industries or IT Parks which are suitablefor foreign direct investment.


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10.

Since its Admission, UCP has made strongprogress towards its goal of capitalising on thediverse and growing Indian real estate market.The project focus continues to remain centeredaround the development of assets in thesuburbs of major metropolitan cities, which theCompany regards as offering good prospects forcapital and income growth, and we are pleasedto report that the pipeline of assets offeringattractive investment opportunities that we areconsidering for acquisition remains strong. TheBoard will consider the appropriate means forfinancing such opportunities as necessary.

The Company has co-invested in the SeedPortfolio Assets alongside Unitech Limited(“Unitech”) and its affiliates. Unitech is aleading real estate developer in India with atrack record of over 30 years in the constructionand real estate development businesses. Unitechhas extensive experience of developingcommercial and residential real estate projectsin India. Projects previously developed byUnitech have attracted occupiers including ColtTelecom, Convergys, EDS, Exxon Mobil, Fidelity,Hewitt, Hewlett Packard, Keane, Reebok, RoyalBank of Scotland, UT Starcom and Vertex.

The Company has appointed Nectrus Limited, anaffiliate of Unitech, (the “Investment Manager”)to provide investment advisory services to theCompany with respect to the identification,structuring and execution of potentialinvestments and investment strategy. Inaddition, Unitech provides project managementservices in respect of the Seed Portfolio Assets.

We are pleased that, as anticipated, through thecombination of the local knowledge, experienceand reputation of Unitech with theinternational expertise and capabilities of the

external consultants, an unrivaled team hasbeen put in place to plan, design, andundertake the development of the SeedPortfolio Assets. Based on the track record ofthe combined team, we are confident ofachieving the development targets necessary torealise the anticipated project returns.

Seed Portfolio Assets

As described above, the Company has co-invested with Unitech and its affiliates in theSeed Portfolio Assets, with the Companyacquiring majority control and Unitech holding,either directly or indirectly, a minority stake. Allof the Seed Portfolio Assets are beingdeveloped by Unitech.

Of these, five assets are located in the NationalCapital Region (the area surrounding Delhi,Northern India) and account for approximately80% of UCP’s potential leaseable area whencompleted. The sixth asset is situated in theKolkata area of the State of West Bengal,accounting for the remaining 20%.

The Company’s six assets are as follows:

• Infospace Gurgaon (“G1-ITC”) has a land areaof 24.7 acres and will have a total leasablearea of approximately 3.26 million sq ft uponcompletion consisting of office space of 3.21million sq ft and retail space of 50,000 sq ft.The project will be developed as an IT andITES SEZ. Its site is located in the Gurgaonarea of the National Capital Region and isbeing designed by Callison Architecture Inc.

• InfoSpace, Dundahera, Gurgaon (“G2-IST”) isbeing developed by Unitech Developers andProjects Limited (‘‘UDPL’’) as a proposed ITand ITES SEZ. The completed project isdesigned to have a total leaseable area of

11.

approximately 3.75 million sq ft consisting of3.70 million sq ft of office space and 50,000sq ft of retail space. G2-IST is a 28.4 acre sitelocated in Dundahera, Gurgaon on the OldGurgaon Highway and near to the Delhi-Gurgaon border. The buildings, designed byCallison Architecture, Inc., will be finished toa high standard and are expected to includerecreational facilities such as food courts, agymnasium and coffee shops.

• InfoSpace, Sector 62, Noida (“N1”) is beingdeveloped by Shantiniketan PropertiesLimited and has been designed by CallisonArchitecture, Inc.. It will provideapproximately 2.03 million sq ft of leaseablearea surrounded by a landscaped commonarea upon completion. The complex isdesigned to provide 1.97 million sq ft ofoffice space and 60,000 sq ft of retail spaceand is expected to include facilities such asfood courts, a gymnasium, coffee shops andother amenities. N1 is a 19.3 acre site locatedclose to National Highway 24 in Noida.

• InfoSpace, Sector 135, Noida (“N2”) isbeing designed by RSP Architects and beingdeveloped by Seaview Developers Limitedas an IT and ITES SEZ. The proposeddevelopment consists of 29.7 acres of landand is designed to provide approximately3.13 million sq ft of leaseable area uponcompletion, comprising 3.07 million sq ft ofoffice space and 60,000 sq ft of retail space.N2 is situated in Sector 135 next to theexpressway connecting Noida toGreater Noida.

• InfoSpace, Greater Noida (“N3”) is beingdesigned by Hellmuth, Obata andKassabamm, Inc. and developed by UnitechInfra-Con Limited (“UICL”) as a proposed ITand ITES SEZ of 50 acres. This will provideapproximately 4.95 million sq ft of leaseablearea consisting of 4.85 million sq ft of officespace and 100,000 sq ft of retail space uponcompletion. The project design is expected toinclude on-site facilities such as car parking, afood court and a health club. N3 is located inGreater Noida Technical Zone and adjacentto the proposed route of the Taj Expressway.

• Infospace, Kolkata (“K1”) is being designedby RMJM and developed by Unitech Hi-TechStructures Limited as an IT and ITES SEZ overapproximately 45.4 acres. On completion, thecomplex will have a total leaseable area of4.35 million sq ft. The site is designed toprovide 4.25 million sq ft of office space and100,000 sq ft of retail space and is expectedto include amenities such as food courts,coffee shops and a gymnasium. K1 is locatedin New Town, Rajarhat, east of Kolkata,approximately 500 metres from the proposedcentral business district of New Town. Thesite has a large frontage on to one of themajor roads at New Town, which alsoprovides good access to the property, and iswell connected by the Express Highway toKolkata airport and the city centre.


annual report 2007

12.

Project Progress

We are delighted to report strong progress inthe Seed Portfolio Assets, with construction andletting programmes running on schedule.

At the time of Admission, UCP had “in-principle” approval from the Government ofIndia’s Board of Approval for the proposed fiveIT SEZ projects out of six UCP projects.

The projects that have received formal approvalhave to be notified by the Government of Indiabefore receiving the relevant benefits as laiddown under the SEZ act.

13.

The detailed progress made is as follows:

• Infospace, Dundahera, Gurgaon (“G2-IST”);Phase 1 of the project, which isapproximately 460,000 sq ft is likely to behanded over for internal fit-out soon. Rentalactivity for G2-IST is on schedule and aheadof our expectations in terms of rental levelsper square feet. Letters of Intent have beensigned with tenants including aninternational bank, an internationalconsulting firm and a number of BusinessProcess Outsourcing (“BPO”) firms forapproximately 460,000 sq ft of commercialspace in Phase 1. Another two buildingstotalling approximately 1.1 million sq ft ofspace are expected to be ready for handoverfor fit-out by early to mid 2008. Furtherdiscussions are already taking place withseveral companies for approximately 500,000sq ft of this space.

• Infospace, Kolkata (“K1”); Phase 1 of theproject, which is approximately 760,000 sq ftof space is expected to be ready for handingover for internal fit-out by January 2008.Discussions are ongoing with prospectivetenants for leasing the aforesaid area.Construction of Phase 2 for approximately700,000 sq ft has commenced recently. Inaddition, a Letter of Intent has already beenexecuted with an international BPO firm forapproximately 700,000 sq ft of a “built tosuit” facility forming Phase 3 of the project.Further negotiations are underway withseveral companies for approximately 1.2million sq ft of total space in subsequentphases of the project.

• Infospace, Sector 62, Noida (“N1”); thefoundation work of Phase 1 of this project isalmost complete and foundation work forPhase 2 is currently in progress. TheCompany is holding discussions with adomestic telecommunications company for apotential letting of Phase 1 of the project.

• Infospace, Sector 135, Noida (“N2”);construction work for this project hascommenced and discussions withmultinational IT companies forapproximately 1.0 million sq ft of space areunderway.

• Pre-construction activities have started atInfospace, Greater Noida (“N3”). TheCompany is in discussion with a major BPOwith regard to a significant letting.

• Infospace, Gurgaon (“G1-ITC”);preconstruction works have started anddiscussions with multinational IT companiesover potential take-up of approximately 1.1million sq ft of space are underway.

These results and inquiries for space are veryencouraging, as they demonstrate strongdemand for high quality newly developedproduct in the NCR and Kolkata region.


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14.

Outlook

Prospects for the Indian real estate marketcontinue to remain strong, especially for highquality, secure and well located assets such asthose in your Company’s portfolio.

Robust demand for quality commercial,residential, and retail space driven by India’scontinuing economic growth, and a constrainedquality supply in the midst of escalatingdemand, provide support for our strategy ofdeveloping commercial and retail space tosatisfy the increasing demand.

As evidenced by the recent successful IPO of anIndian commercial property portfolio, listed onthe Singapore Stock Exchange, we believe thatcurrently there is strong investor appetite forhigh quality real estate assets as those in yourCompany's portfolio.

With the initial investments in the NCR andKolkata projects, UCP has made significantprogress toward its goal of capitalizing on thediverse and growing Indian real estate marketthrough the development of commercial andretail space. Additionally, the Companycontinues to explore strategic funding optionsto further enhance project and shareholderreturns.

Given the timely investments in the projects,solid marketing initiatives, assembly of a world-class delivery team and progress on the pipelineprojects, I believe UCP has established a strongbase, with excellent momentum to achievetargeted returns.

Atul Kapur

Chairman 7 August 2007

15.


annual report 2007

16.

India Macro

The Indian economy is the fourth largest in the worldas measured by purchasing power parity (PPP), witha gross domestic product (GDP) of USD 4.04 trillionin 2006. It is also the second fastest growing majoreconomy in the world (after China, which had a GDPgrowth rate of 10.7% in 2006). India's foreignexchange reserves, which stand in excess of USD 200billion, reflect the investor's confidence in theeconomy. As detailed in Goldman Sachs' BRICReport, India's economy is likely to become the thirdlargest in the world by 2032, ranking just after theUnited States and China. (Source: JLL, EconomicSurvey of India, PricewaterhouseCoopers Global RealEstate Now March 2007)

Due to its regulated financial environment, under-control inflation, stable political outlook, growingforeign exchange reserves, sustained growth in allsectors of the economy and young demographicprofile, the economy is expected to maintain ahealthy growth rate during the next few years. As aresult of the robust economic fundamentals, Indiahas emerged as an attractive investment destination.Continual liberalization and global liquidity haveresulted in significant increases in FDI and FII flowswhich help support the investments required to fundsuch high growth.

Within services, offshoring and outsourcing activitiesby global MNCs are a key driver of this growth. Indiais now one of the most preferred destinations interms of skilled and low-cost labor for suchoffshoring activities. In fact, India topped the ATKearney Offshore Location Attractiveness index in2005 by a significant margin, due to its mix of lowcosts, English language strengths, a well-developedinstitutional framework, significant depth in humanresources and critical mass of existing outsourcingactivities. Apart from IT/ITES and BPO services, therehas also been rapid growth in offshoring of activitiesto India in other industries such as banking andfinancial, health care and hospitality services.

India Real Estate

India has been experiencing increasing real estateactivity across all property segments of commercial,retail, residential and hospitality in the past fewyears. India real estate is expected to grow from USD12 billion in 2005 to USD 50 billion in 2010. OverUSD 15 billion of foreign investment is estimated tohave flown in in the year 2006-2007 of which 30%is in real estate. (Source: Industry Experts, JLL MerrillLynch, ASSOM Study, ENAM Research estimates)

The sector contributes 2% to the country’s currentGDP, with its share expected to rise to 5% in themedium to long term. As in other countries, theIndian real estate sector has significant linkages withseveral other sectors of the economy and over 250associated industries. Typically, every rupee investedin this sector results in 78 paise being added to theGDP. (Source: Deutsche Bank Report on UnitechCorporate Park, 2 March 07)

Strong demand for residential housing, townshipdevelopment, commercial/IT Parks and retail malls ismore structural. The key drivers to it are existingshortages, demographics, urbanization, growth innuclear families, easy availability of finance, andrising incomes. Additionally thrust on infrastructureprojects across the country has further enhanced thegrowth potential for real estate assets. (Source: JLL,Merrill Lynch, ASSOM Study)

The growth in the number of households has beenfaster than the population growth resulting in anincrease in the demand-supply gap for housing units.This is largely due to the recent trend of joint familiesbreaking up into nuclear families, driving demand formore residential units. (Source: Deutsche Bank Reporton Unitech Corporate Park, 2 March 2007)

While most developers remain concentrated on theresidential segment, players with development plansacross residential, commercial and retail assets wouldoffer stronger growth potential. A combination of adevelop-sell model for residential and a develop-lease-sell model for some commercial/IT Parks and retailassets will be more appropriate. (Source: CitigroupInvestment Research, 4 May 2007)

Investment Manager’s Review

17.

India Commercial Office Space - IT/ITES Space

A significant part of India’s strong economic growthhas been driven by the services segments – domestic,outsourcing and knowledge sources segments. Thishas created significant demand for large scale highquality office space across geographic markets. Lowstock of Grade A buildings in absolute terms andrelative terms, the strong demand for IT/ITES services,and the growing domestic economy has triggeredthis demand. (Source: JLL, Merrill Lynch, Researchreports, ASSOM Study)

The Indian IT/ITES industry is among the significantdrivers of commercial real estate. With the IT/ITESindustry expected to grow at 15-20% CAGR overFY2010-16E, this would translate into potentialcommercial real estate demand of another 400-700million sq ft. Add to this the demand from the non-IT/ITES sectors from domestic companies, banks,insurance companies, other financial services firmsbuilding out and MNCs targeting the India market;the total potential commercial real estate demand islikely to be ~450-530 million sq ft by FY2011E.(Source: Citigroup Investment Research, 4 May,2007)

According to a McKinsey-NASSCOM study, anadditional 14 - 16 million people would be requiredin the IT/ITES space alone, directly or indirectly, whichwould further create cumulative demand of 150million sq ft of office space by FY 2010. With limitedavailability of land and high prices in city centres,demand is shifting to new cities and the outskirts oflarge towns. Hence, even Tier-II and Tier-III cities arerecording significant growth in demand.


annual report 2007

18.

Interest Rate movement

The direction of interest rates remains critical to theproperty development cycle. Key risks to demand arespiraling interest rates and high property prices,which have raised some affordability issues in thenear term.

Government of India intends to cool real estate assetprices by curtailing funds to developers, imposingservice taxes on commercial/retail lease rentals andwithdrawing tax benefits on housing projects todevelopers. It is also proposed to clamp down on

overseas financing via External CommercialBorrowings for real estate developers to containinflation. Lack of easy access to capital will lowerprojected Return on Equity.

According to HDFC Chairman Deepak Parekh,interest rates in the Indian economy, including homeloan rates, have peaked and he neither expects ahike in interest rates by Reserve Bank of India nor afall in interest rates in the near future. (Source:Business Line, 11 July, 07)

Project Update

SEZ Status: The position regarding the status forapproval as SEZ for each joint venture is given below:

19.

The development status of each of theprojects is as follows:

• Infospace, Dundahera, Gurgaon (“G2-IST”);Phase 1 of the project, which is approximately460,000 sq ft is likely to be handed over forinternal fit-out soon. Rental activity for G2-IST ison schedule and ahead of our expectations interms of rental levels per sq ft. Letters of Intenthave been signed with tenants including aninternational bank, an international consultingfirm and a number of Business ProcessOutsourcing (“BPO”) firms for approximately460,000 sq ft of commercial space in Phase 1.Another two buildings totalling approximately 1.1million sq ft of space are expected to be ready forhandover for fit-out by early to mid 2008. Furtherdiscussions are already taking place with severalcompanies for approximately 500,000 sq ft ofthis space.

• Infospace, Kolkata (“K1”); Phase 1 of theproject, which is approximately 760,000 sq ft ofspace is expected to be ready for handing overfor internal fit-out by January 2008. Discussionsare ongoing with prospective tenants for leasingthe aforesaid area. Construction of Phase 2 forapproximately 700,000 sq ft has commencedrecently. In addition, a Letter of Intent has alreadybeen executed with an international BPO firm forapproximately 700,000 sq ft of a "built to suit"facility forming Phase 3 of the project. Furthernegotiations are underway with severalcompanies for approximately 1.2 million sq ft oftotal space in subsequent phases of the project.

• Infospace, Sector 62, Noida (“N1”); thefoundation work of Phase 1 of this project isalmost complete and foundation work for Phase2 is currently in progress. The Company is holdingdiscussions with a domestic telecommunicationscompany for a potential letting of Phase 1 ofthe project.

• Infospace, Sector 135, Noida (“N2”);construction work for this project hascommenced and discussions with multinational ITcompanies for approximately 1 million sq ft ofspace are underway.

• Pre-construction activities have started atInfospace, Greater Noida (“N3”). TheCompany is in discussion with a major BPO withregard to a significant letting.

• Infospace, Gurgaon (“G1-ITC”);preconstruction works have started anddiscussions with multinational IT companies overpotentialtake-up of approximately 1.1 million sq ft ofspace are underway.

These results and inquiries for space are veryencouraging, as they demonstrate strong demandfor high quality newly developed product in the NCRand Kolkata region.

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annual report 2007

20.

Summary of Valuations

Jones Lang LaSalle (JLL), an independent valuer,valued the joint ventures' properties underconstruction as at 31 March 2007 at a valuation of£551.0 million compared with a valuation of £481.5million as at 8 November 2006. The value reportedin the financial statements is based on an adjustedvaluation of £553.0 million, which is afteraccounting for actual expenditure incurred versusestimates used in the JLL valuation. The Company'sshare of the market valuation of the assets as at 31March 2007 (representing 60% of the joint ventures'total portfolio), including construction costs is £331.8million. This represents a 14% increase in the marketvalue of the Company's assets from the date ofAdmission to 31 March 2007.

The Company is committed to delivering income andcapital value growth to its shareholders and, backedby its co-investment with Unitech Limited and thewealth of shared knowledge and expertise, isconfident of achieving this goal.

Potential Exit Route

As evidenced by the recent successful IPO of anIndian commercial property portfolio, listed on theSingapore Stock Exchange, we believe that currentlythere is strong investor appetite for high quality realestate assets as those in your Company's portfolio.

Nectrus Limited

Investment Manager 7 August 2007

21.

Directors’ Report

The Directors present their report and financialstatements for the period from 6 September 2006,the Company's date of incorporation,to 31 March 2007.

Principal activities

Unitech Corporate Parks PLC (the "Company") is aninvestment company established to invest in theIndian real estate sector. The Company's strategy isto invest in commercial real estate developedspecifically for the high growth IT (InformationTechnology) and ITES (IT Enabled Services) sectors.The Company focuses on investment in SpecialEconomic Zones dedicated to the IT and ITESindustries (IT SEZs) or IT Parks which are suitable forforeign direct investment ("FDI"). The Companycurrently participates as a co-investor alongside theUnitech Group in six investment propertydevelopment projects. The Unitech Group is thelargest listed real estate developer in India by marketcapitalisation.

Results and dividend

The Group's consolidated financial statements are setout on pages 25 to 40. The Group reported netassets at the balance sheet date of £366,632,527and in the period to 31 March 2007 loss attributableto the shareholders of £44,305.

The Directors do not propose a dividend in respect ofthe period ended 31 March 2007.

Directors

The Directors of the Company during the period andto date were:

Atul Kapur (Chairman)(appointed 4 December 2006)

Aubrey John Adams(appointed 4 December 2006)

Ajay Chandra(appointed 13 November 2006)

Mohammad Yousuf Khan(appointed 4 December 2006)

Donald Lake(appointed 30 November 2006)

Neal Stuart Aitken(appointed 6 September 2006;resigned 4 December 2006)

John Michael Killip(appointed 6 September 2006;resigned 4 December 2006)

None of the Directors had any interest in the sharesof the Company.

Secretary

The Secretary of the Company during the period andto date was:

Elizabeth Tansell(appointed 4 December 2006)

Neal Stuart Aitken(appointed 6 September 2006;resigned 4 December 2006)

Auditors

KPMG Audit LLC, Isle of Man, chartered accountantswere appointed auditors on 6 December 2006.KPMG Audit LLC, Isle of Man, retire under theprovisions of section 12(2) of the Isle of ManCompanies Act 1982 and being eligible they offerthemselves for re-election at the forthcoming AGM.

By Order of the Board

E. TansellCompany Secretary 7 August 2007


annual report 2007

22.

The Directors are responsible for preparing theDirectors' Report and the financial statements inaccordance with applicable law and regulations.

Company law requires the Directors to preparefinancial statements for each financial year, whichmeet the requirements of Isle of Man company law.In addition, the Directors have elected to prepare theGroup and Parent Company financial statements inaccordance with International Financial ReportingStandards.

The Group and Parent Company financial statementsare required by law to give a true and fair view ofthe state of affairs of the Group and the ParentCompany and of the profit or loss for that period.

In preparing these financial statements, the Directorsare required to:

• select suitable accounting policies and then applythem consistently;

• make judgements and estimates that arereasonable and prudent;

• state whether applicable International FinancialReporting Standards have been followed, subjectto any material departures disclosed andexplained in the financial statements; and

• prepare the financial statements on the goingconcern basis unless it is inappropriate topresume that the Group and Parent Companywill continue in business.

The Directors are responsible for keeping properaccounting records that disclose with reasonableaccuracy at any time the financial position of theParent Company and to enable them to ensure thatthe financial statements comply with Isle of ManCompanies Acts 1931 to 2004. They have generalresponsibility for taking such steps as are reasonablyopen to them to safeguard the assets of the Groupand to prevent and detect fraud and otherirregularities.

By Order of the Board

E. TansellCompany Secretary 7 August 2007

Statement of Directors’ Responsibilities

in respect of the Directors' Report and the Financial Statements

23.

The Directors recognise the value of the Principles ofGood Corporate Governance and Code of BestPractice as set out in the Combined Code andalthough the Company is not obliged by the listingrules of the Alternative Investment Market of theLondon Stock Exchange to do so, the Board intendsto take appropriate measures to ensure that theCompany complies with the Combined Code to theextent appropriate taking into account the size ofthe Company and the nature of its business.

The Board directs the Company's activities in aneffective manner through its regular Board meetingsand monitors performance through timely andrelevant reporting procedures.

The members of the Board, all of whom are non-executive, meet quarterly.

The Board has established an Audit Committee butdoes not consider it necessary to establishremuneration and nomination committees. TheBoard as a whole will review annually the level ofDirectors' fees. Aubrey Adams is Chairman of theAudit Committee.

Audit Committee

The Audit Committee is a sub-committee of theBoard and makes recommendations to the Boardwhich retains the right of final decision. The AuditCommittee has primary responsibility for reviewingthe financial statements and the accounting policies,principles and practices underlying them, liaising withthe external auditors and reviewing the effectivenessof internal controls.

The terms of reference of the Audit Committee coverthe following:

• the composition of the Committee, quorum andwho else attends meetings;

• appointment and duties of the Chairman;

• duties in relation to external reporting, includingreviews of financial statements, shareholdercommunications and other announcements; and

• duties in relation to the external auditors,including appointment/dismissal, approval of fees,discussion of audit.

Aubrey AdamsChairman, Audit Committee 7 August 2007

Corporate Governance Statement


annual report 2007

24.

We have audited the Group and Parent Companyfinancial statements ("the financial statements") ofUnitech Corporate Parks PLC for the period from 6September 2006 (date of incorporation) to 31 March2007 which comprise the Consolidated IncomeStatement, the Consolidated and Parent CompanyBalance Sheets, the Consolidated and ParentCompany Statements of Changes in Equity and theConsolidated Cash Flow Statement and the relatednotes. These financial statements have been preparedunder the accounting policies set out therein.

This report is made solely to the Company'smembers, as a body, in accordance with section 15of the Companies Act 1982. Our audit work hasbeen undertaken so that we might state to theCompany's members those matters we are requiredto state to them in an auditor's report and for noother purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyoneother than the Company and the Company'smembers as a body, for our audit work, for thisreport, or for the opinions we have formed.

Respective responsibilities of Directors andAuditors

The Directors' responsibilities for preparing thefinancial statements in accordance with applicableIsle of Man company law and International FinancialReporting Standards are set out in the Statement ofDirectors' Responsibilities on page 22.

Our responsibility is to audit the financial statementsin accordance with relevant legal and regulatoryrequirements and International Standards onAuditing (UK and Ireland).

We report to you our opinion as to whether thefinancial statements give a true and fair view andare properly prepared in accordance with Isle ofMan Companies Acts 1931 to 2004. We also reportto you whether in our opinion the information givenin the Directors' Report is consistent with thefinancial statements.

In addition we report to you if, in our opinion, theCompany, has not kept proper accounting records, ifwe have not received all the information andexplanations we require for our audit, or if

information specified by law regarding the Directors'transactions with the Company is not disclosed.

We read the Directors' Report and any otherinformation accompanying the financial statementsand consider the implications for our report if webecome aware of any apparent misstatements orinconsistencies within it.

Basis of opinion

We conducted our audit in accordance withInternational Standards on Auditing (UK and Ireland)issued by the UK Auditing Practices Board. An auditincludes examination, on a test basis, of evidencerelevant to the amounts and disclosures in the financialstatements. It also includes an assessment of thesignificant estimates and judgements made by theDirectors in the preparation of the financial statements,and of whether the accounting policies are appropriateto the Group's and Company's circumstances,consistently applied and adequately disclosed.

We planned and performed our audit so as to obtainall the information and explanations which weconsidered necessary in order to provide us withsufficient evidence to give reasonable assurance thatthe financial statements are free from materialmisstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we alsoevaluated the overall adequacy of the presentationof information in the financial statements.

Opinion

In our opinion:

• the financial statements give a true and fairview, in accordance with International FinancialReporting Standards, of the state of theGroup's and Parent Company's affairs as at 31March 2007 and of the Group's loss for theperiod then ended;

• the financial statements have been properlyprepared in accordance with the Isle of ManCompanies Acts 1931 to 2004; and

• the information given in the Directors' Report isconsistent with the financial statements.

Report of the Independent Auditors, KPMG Audit LLC, to themembers of Unitech Corporate Parks PLC

KPMG Audit LLC Chartered Accountants Douglas Isle of Man 7 August 2007

25.

Consolidated Income Statement for the period from 6 September 2006 to 31 March 2007


annual report 2007

26.

Consolidated and Company Balance Sheetsas at 31 March 2007

27.

3,600,000 342,918,991 272,455 346,791,446

Consolidated and Company Statements of Changes in Equityfor the period from 6 September 2006 to 31 March 2007


annual report 2007

28.

Consolidated Cash Flow Statementfor the period from 6 September 2006 to 31 March 2007

29.

1. Reporting entity

Unitech Corporate Parks PLC (the "Company") is aclosed-ended investment company domiciled in theIsle of Man. It was incorporated on 6 September2006 in the Isle of Man as a public limited companyand is quoted on the Alternative Investment Market(AIM) operated and regulated by the London StockExchange. The consolidated financial statements ofthe Company comprise the Company and itssubsidiaries (together referred to as the "Group")and the Group's interest in jointly controlled entities.

The Company invests in the Indian real estate sector.The Company's strategy is to invest in commercialreal estate developed specifically for the high growthIT (Information Technology) and ITES (IT EnabledServices) sectors. The Company intends to focus oninvestment in Special Economic Zones dedicated tothe IT and ITES industries (IT SEZs) or IT Parks whichare suitable for foreign direct investment (FDI).

The Company does not have any employees.

Notes to theConsolidated FinancialStatementsfor the period from6 September 2006 to 31 March 2007


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30.

2. Basis of preparation

2.1 Statement of compliance

The consolidated financial statements have beenprepared in accordance with and comply withInternational Financial Reporting Standards ('IFRS')and the Isle of Man Companies Acts 1931-2004.

In accordance with the provisions of Section 3of the Isle of Man Companies Act 1982,no separate income statement has beenpresented for the Company.

2.2 Basis of preparation

The consolidated financial statements have beenprepared on the historical cost basis except thatinvestment property under construction is measuredat fair value.

2.3 Functional and presentation currency

These consolidated financial statements arepresented in British pounds, which is the Company'sfunctional currency.

2.4 Use of estimates and judgements

The preparation of financial statements requiresmanagement to make judgements, estimates andassumptions that affect the application of accountingpolicies and the reported amounts of assets,liabilities, income and expenses. Actual results maydiffer from these estimates.

Estimates and underlying assumptions are reviewedon an ongoing basis. Revisions to accountingestimates are recognised in the period in which theestimate is revised and in any future periods affected.

In particular, information about significant areas ofestimation uncertainty and critical judgements inapplying accounting policies that have the mostsignificant effect on the amount recognised in thefinancial statements are described in Note 6:Determination of Fair Value and Note 4:Management Fees.

3. Significant accounting policies

The principal accounting policies applied in thepreparation of these consolidated financialstatements are set out below:

3.1 Basis of consolidation

(a) SubsidiariesSubsidiaries are those entities controlled by theGroup. Control exists when the Group has thepower to govern the financial and operating policesof an entity so as to obtain benefits from itsactivities. In assessing control, potential voting rightsthat presently are exercisable are taken into account.The financial statements of subsidiaries are includedin the consolidated financial statements from thedate that control commences until the date thatcontrol ceases.

(b) Joint VenturesJoint ventures are those entities over whose activitiesthe Group has joint control, established bycontractual agreement and requiring unanimousconsent for strategic financial and operatingdecisions. Joint ventures are accounted for byproportionate consolidation. The Group combines itsshare of the joint ventures' individual income andexpenses, assets and liabilities and cash flows on aline-by-line basis with similar items in the Group'sfinancial statements.

(c) Transactions eliminated on consolidationIntra-group balances, and any unrealised incomeand expenses arising from intra-group transactions,are eliminated in preparing the consolidatedfinancial statements.

31.

3.2 Foreign currency

(a) Foreign currency transactionsTransactions in foreign currencies are translated tothe respective functional currencies of Groupentities at exchange rates at the dates of thetransactions. Monetary assets and liabilitiesdenominated in foreign currencies at the reportingdate are retranslated to the functional currency atthe exchange rate at that date. Exchangedifferences arising on translation are recognised inthe income statement.

(b) Foreign operationsThe assets and liabilities of foreign operations,including goodwill and fair value adjustmentsarising on acquisition, are translated to Britishpounds at exchange rates at the reporting date.The income and expenses of foreign operations aretranslated to British pounds at exchange rates atthe dates of the transactions. Exchange differencesarising on translation of foreign operations aretaken to the translation reserve. On disposal of aforeign operation, in part or in full, the relevantamount in the translation reserve is transferred toprofit or loss reserve.

3.3 Property, plant and equipment

(a) Investment property under constructionInvestment property under construction is measuredinitially at its cost, including related transaction costs.After initial recognition, investment property underconstruction is carried at fair value. Fair value isbased on active market prices, adjusted, if necessary,for any difference in the nature, location or conditionof the specific asset. The valuation of the propertieshas been carried out by Jones Lang LaSalle(independent professionally qualified valuers) as of31 March 2007. Gains and losses arising from therevaluation of investment properties underconstruction are taken to equity.

(b) Plant and equipmentPlant and equipment are stated at historical cost lessaccumulated depreciation and impairment losses.Historical cost includes expenditures that are directlyattributable to the acquisition of the asset.

Subsequent costs are included in the asset's carryingamount or recognised as a separate asset, asappropriate, only when it is probable that futureeconomic benefits associated with the item will flowto the Group and the cost of the item can bemeasured reliably. All other repairs and maintenanceare charged to the income statement in the financialperiod in which they are incurred.

(c) DepreciationDepreciation is recognised in profit or loss on astraight-line basis over the estimated useful lives ofeach item of plant and equipment. Leased assets aredepreciated over the shorter of the lease term andtheir useful lives. Investment property underconstruction is not depreciated.

The estimated useful lives are as follows:

3.4 Intangible assets - goodwill

Goodwill represents the difference between the costof an acquisition and the fair value of the Group'sshare of the net assets of the acquired subsidiary orjoint venture at the effective date of acquisition.Goodwill on acquisition of subsidiaries and jointventures is included in intangible assets. Goodwill istested annually for impairment and carried at costless accumulated impairment.

The gain or loss on disposal of subsidiaries and jointventures is calculated by reference to the Group'sshare of net assets at the date of disposal includingthe attributable amount of any goodwill remaining.

Plant and machinery

Fixtures and fittings


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32.

3.5 Finance leases

Lease of assets where the Group has substantially allthe risks and rewards of ownership are classified asfinance leases. Finance leases are capitalised at thelease's commencement at the lower of the fair valueof the leased property and the present value of theminimum lease payments, comprising of leasepremium and annual lease rentals and stamp duty, ifany, forms part of the initial cost of the propertyinterest. Each lease payment is allocated betweenthe liability and finance charges, where applicable, soas to achieve a constant rate on the final balanceoutstanding. The corresponding rental obligations,net of finance charges, are included in current andnon-current liabilities. The interest element of thefinance cost is charged to the income statement overthe lease period so as to produce a constant periodicrate of interest on the remaining balance of theliability for each period.

Investment properties under construction acquiredunder finance leases are carried at their fair value.

3.6 Interest income

Interest income comprises bank interest earnedon uninvested funds and is recognised on anaccruals basis.

3.7 Expenses

Expenses are accounted for on an accruals basis.

3.8 Finance costs

Finance costs comprise interest expense onlease payments.

3.9 Income tax expense

Income tax expense comprises current and deferredtax. Income tax expense is recognised in profit or lossexcept to the extent that it relates to itemsrecognised directly in equity, in which case it isrecognised in equity.

Current tax is the expected tax payable on thetaxable income for the year, using tax ratesenacted or substantively enacted at the reportingdate, and any adjustment to tax payable in respectof previous years.

Deferred tax is recognised using the balance sheetmethod, providing for temporary differencesbetween the carrying amounts of assets andliabilities for financial reporting purposes and theamounts used for taxation purposes. Deferred tax isnot recognised for the following temporary timingdifferences: the initial recognition of goodwill, theinitial recognition of assets or liabilities in atransaction that is not a business combination andthat affects neither accounting nor taxable profit,and differences relating to investments in subsidiariesand jointly controlled entities to the extent that theyprobably will not reverse in the foreseeable future.Deferred tax is measured at the tax rates that areexpected to be applied to the temporary timingdifferences when they reverse, based on the lawsthat have been enacted or substantively enacted bythe reporting date.

A deferred tax asset is recognised to the extent thatit is probable that future taxable profits will beavailable against which temporary difference can beutilised. Deferred tax assets are reviewed eachreporting date and are reduced to the extent that itis no longer probable that the related tax benefit willbe realised.

3.10 Earnings per share

The Group presents basic and diluted earnings pershare (EPS) data for its ordinary shares. Basic EPS iscalculated by dividing the profit or loss attributableto ordinary shareholders of the Company by theweighted average number of ordinary sharesoutstanding during the period.

33.

3.11 Cash and cash equivalents

Cash and cash equivalents comprises cash balancesand call deposits. Cash equivalents are short-term,highly liquid investments that are readily convertibleto known amounts of cash and are subject to aninsignificant risk of changes in value.

3.12 Segment reporting

A segment is a distinguishable component of theGroup that is engaged either in providing relatedproducts or services (business segment), or inproviding products or services within a particulareconomic environment (geographical segment),which is subject to risks and rewards that aredifferent from those of other segments.

The Group invests in a single geographic region andhas a single business segment.

4. Management fee

Nectrus Limited, the Investment Manager, and anaffiliate of the Unitech Group, receives amanagement fee equivalent to 2 per cent perannum of the Company's average invested equitycapital paid quarterly in arrears.

In addition the Group pays the Investment Managera performance fee calculated by reference to theamount by which the internal rate of return on aninvestment project (Project IRR) exceeds certainbenchmarks. The Investment Manager receives:

• a performance fee of 20 per cent of that part ofthe net cash flow generated in respect of a projectthat results in a Project IRR greater than 10 percent and less than or equal to 20 per cent; and

• a performance fee of 30 per cent of that part ofthe net cash flow generated in respect of aproject that resulted in a Project IRR greater than20 per cent; minus

• any performance fees previously paid in respectof the relevant project.

The provision for performance fees at the period endhas been determined based on an estimated IRR of20 per cent across all projects.

5. Financial risk management

5.1 Financial risk factors

The Group's activities expose it to a variety offinancial risks: market risk (including currency risk,price risk and cash flow interest rate risk), credit riskand liquidity risk. The risk management policiesemployed by the Company to manage these risks arediscussed below.

5.2 Market risk

(i) Risks relating to real estate and investmentproperty development in India

Political, economic and social factors, changes inIndian law or regulations and the status of India'srelations with other countries may adversely affectthe value of the Company's assets.

The performance of the Group is dependent on thestate of the Indian property market and its ability toacquire interest in development projects, develop theprojects, lease the developments at attractive rentalsand/or sell the developments. The market value andrental rates for properties is generally affected byoverall conditions in the economy, such as growth inand absolute levels of GDP, employment trends,inflation and changes in interest rates. Market valuecan also be affected by regional or local conditionsand the Group's current development projects aremainly concentrated in the National Capital Region.

The Group focuses on development of real estate forthe IT and ITES industries which are dependent onthe continued popularity of business processoutsourcing, principally by businesses located inWestern Europe and North America. Competitivepressure from other countries providing similarservices, reduction or removal of tax incentives andchanges in government policy with regard to foreigndirect investment may impact the results of theCompany adversely.


annual report 2007

34.

The construction work at all of the Group'sdevelopment projects is performed by third partycontractors and the Group is reliant on suchcontractors performing these services in accordancewith the relevant construction contracts. If thecontractors fail to perform their obligations in amanner consistent with their contracts, thedevelopment projects may not be completed as andwhen envisaged, which may lead to unexpectedcosts. The Group has entered into a ProjectManagement Agreement with Unitech Limited, itsco-investor and India's largest listed propertydeveloper (by market capitalisation), under whichUnitech Limited is engaged to provide propertymanagement services in respect of each of theinvestment properties under construction.

The Group is exposed to fluctuations in the prices ofraw materials and components used in itsconstruction projects. These commodities includesteel, cement and timber. The costs of componentsand various small parts sourced from outsidemanufacturers may also fluctuate based on theiravailability from suppliers. Notwithstanding theGroup's intention to protect itself against anyincreases in such costs by entering into fixed priceconstruction contracts, nonetheless, the Group has aresidual exposure to any such increases.

(ii) Foreign currency risk

The Company's principal operating currency will bePounds but substantially all of its income andexpenditure are expected to be denominated incurrencies other than Pounds, primarily the Rupee.All monies returned to shareholders and the reportednet asset value of the Company will be denominatedin Pounds. Consequently, the Company'sperformance will be subject to the effect ofexchange rate fluctuations with respect to thecurrencies in which its income and expenditure aredenominated. Where feasible and, as appropriate theCompany intends to finance assets using localcurrency denominated financing.

The Group's currency exposure as at 31 March 2007was as follows:

(iii) Interest rate risk

The Group holds financial assets and liabilities thatare interest bearing; as a result the Group is subjectto interest rate risk due to fluctuations in theprevailing levels of market interest rates. Any excesscash and cash equivalents are invested at short-termmarket interest rates.

The effective rate of interest on the Group's financelease liabilities is 10% per annum.

5.3 Credit risk

The Group has no significant concentrations ofcredit risk.

5.4 Liquidity risk

The Company has retained approximately £30 millionin cash in order to meet the future management feesand operating expenses of the Group.

6. Determination of fair values

A number of the Group's accounting policies anddisclosures require the determination of fair value,for both financial and non-financial assets andliabilities. Fair values have been determined formeasurement and/or disclosure purposes based onthe following methods.

6.1 Investment properties under construction

The best evidence of fair value is current prices inan active market for similar lease and othercontracts. The Company has appointed Jones LangLaSalle (an international firm of valuers) as itsvaluers for the purpose of determining the fairvalue of investment properties under construction.The valuation is undertaken twice early at 31March and 30 September.

35.

6.2 Assets and liabilities on acquisition ofsubsidiaries and joint ventures

The fair value of assets and liabilities acquired as aresult of a business combination is based on marketvalues. The market value of property is the estimatedamount for which a property could be exchanged onthe date of valuation between a willing buyer and awilling seller in an arm's length transaction after

proper marketing wherein the parties had each actedknowledgeably, prudently and without compulsion.The market value of items of plant , equipment,fixtures and fittings is based on quoted market pricesfor similar items.

7. Property, plant and equipment

The net book value, at cost, of investment propertiesunder construction was £300,987,566 at thereporting date.

Investment properties under construction werevalued at market value in accordance with the RICSAppraisal and Valuation Standards by Jones LangLaSalle at 31 March 2007.

With the exception of the site being developed byUnitech Developers and Projects Limited ("UDPL") all

land is held freehold or under long leaseholds. The sitebeing developed by UDPL is owned by GurgaonInfoSpace Limited ("GIL"). Under the terms of a JointDevelopment Agreement GIL has granted developmentrights over the site to UDPL. In consideration fordevelopment of the project at Gurgaon, UDPL isentitled to receive 72 per cent of the gross proceedsarising from the sale or lease of the developed areas.UDPL has agreed to incur all construction and fit-outcosts in respect of the development.


annual report 2007

36.

8. Intangible assets - goodwill

9. Acquisition of interests in joint ventures

10. Taxation

A standard zero per cent rate of income tax appliesfor Isle of Man companies (except in relation toprofits arising from banking, or from land andproperty in the Isle of Man). The Company isrequired to pay an annual corporate charge,currently £250.

The Mauritius subsidiaries are subject to taxation at15 per cent on dividends received from the jointventure companies however a foreign tax credit willbe available reducing the tax rate to 3 per cent. TheMauritius subsidiaries are not expected to have anyliability to capital gains tax.

The joint venture companies are subject to corporatetaxation in India at the rate of 33.66 per cent ontheir net income and short term gains.

Deferred tax arising on the revaluation of investmentproperties under construction has been provided forat the reporting date as Indian capital gains taxwould be payable in the event that the property wassold. The Company does not intend that anytaxation charge will arise since any disposal would beeffected by way of a sale of the Group's interest inthe joint venture.

There was no impairment of goodwill as at the reporting date.

The fair value of assets and liabilities acquired on acquisition of interests in joint ventures during the periodwas as follows:

37.

11. Share capital and reserves

11.1 Share capital

11. Share capital and reserves

The Company was incorporated on 6 September2006 with an authorised share capital of £2,000comprising 2,000 ordinary shares of £1.00 each, ofwhich two shares were issued. On 14 December2006 the share capital of the Company was sub-divided into 200,000 shares of £0.01 each and theauthorised share capital increased to £50,000,comprising 500,000,000 shares of £0.01 each. On20 December 2006 the Company was admitted toAIM and, by way of a private placing, a further359,999,800 ordinary shares of par value £0.01 eachwere issued at a price of £1.00 each.

11.2 Share premium

Costs totalling £13,480,811 associated with theplacement of shares have been charged againstshare premium received on the issue of the shares.

11.3 Translation reserve

The translation reserve comprises foreign currencydifferences arising from the translation of thefinancial statements of foreign operations.

11.4 Revaluation reserve

The revaluation reserve comprises gains arising onthe revaluation of investment properties underconstruction to their fair value at the reporting date,net of related deferred tax and a provision forperformance fees.

12. Loss per share

The calculation of loss per share at 31 March 2007of 0.01p is based on the net loss attributable toordinary shareholders of £44,305 and a weightedaverage number of ordinary shares outstandingof 360,000,000.

The Company has no dilutive potential ordinaryshares; the dilutive earnings per share is the same asthe basic earnings per share.

The Company's modified earnings per share afterincluding net gains of £15,679,442 for the periodwhich have been taken directly to revaluationreserves was 4.3p.

13. Finance lease liabilities

Finance lease liabilities are payable as follows:

The New Okhla Industrial Development Area (Noida)authority has allotted Shantiniketan PropertiesLimited a leasehold title to a 19.3 acre site in Noidafor 90 years from 24 March 2006 for the purpose ofsetting up an IT and ITES project on the site. Theannual ground lease rent payable is INR 7,349,865for the first 10 years with a 10 year review cycle.

The Noida authority has allotted Seaview DevelopersLimited a leasehold title to a 29.7 acre site in Noidafor 90 years from 17 February 2006 for the purposeof setting up an IT SEZ at the project site. The annualground lease rent payable is INR 11,766,000 for thefirst 10 years with a 10 year review cycle.

The Noida authority has allotted Unitech Infra-ConLimited leasehold title to two sites comprising 74.75acres in Greater Noida Technical Zone for thepurpose of setting up an IT and an IT SEZ. Theannual ground lease rents payable for the 90 yearleases which commenced 9 June 2006 and 11August 2006 are INR 3,311,238 and INR 2,488,997respectively for the first 10 years with a 10 yearreview cycle.


annual report 2007

38.

14. Related-party transactions

Parties are considered to be related if one party hasthe ability to control the other party or exercisesignificant influence over the other party in makingfinancial or operational decisions. Ajay Chandra, aDirector of the Company, is also the ManagingDirector of Unitech Limited.

Nectrus Limited, the Investment Manager to theCompany, is an affiliate of the Unitech Group, theCompany's co-investor in the investment propertiesunder construction. It receives a management feeand performance fee from the Group as detailed inNote 4.

Unitech Limited, the Company's co-investor, acts asProperty Manager for the investment properties underconstruction and receives fees from the joint ventures.

15. Group entities

15.1 Subsidiaries

On 16 November 2006 the Company acquired theentire share capital of Candor Investments Limited for aconsideration of US$1. Prior to its acquisition by theCompany, Candor Investments Limited had not traded.

On 28 November 2006 Candor Investments Limitedacquired the entire share capital of the six underlyingsubsidiaries at par for a consideration of US$1 each.Prior to their acquisition by Candor Investments Limitednone of the underlying subsidiaries had traded.

On 10 January 2007 Acacia Properties Inc. acquired a60% interest in the ordinary share capital and a100% interest in the preference share capital ofShantiniketan Properties Limited for a considerationof INR 2,630 million.

On 10 January 2007 Dotterel Estates Limitedacquired a 60% interest in the ordinary share capitalof Seaview Developers Limited for a consideration ofINR 4,526 million.

On 29 January 2007 Tulipa Investments Inc. acquireda 60% interest in the ordinary share capital ofUnitech Realty Projects Limited for a consideration ofINR 6,268 million.

On 11 January 2007 Gladiolys Realty Inc. acquired a60% interest in the ordinary share capital of UnitechDevelopers and Projects Limited for a considerationof INR 5,709 million.

On 23 January 2007 Myna Holdings Limited acquireda 60% interest in the ordinary share capital ofUnitech Hi-Tech Structures Limited for aconsideration of INR 5,167 million.

On 10 January 2007 Sparrow Properties Limitedacquired a 60% interest in the ordinary share capitalof Unitech Infra-Con Limited for a consideration ofINR 2,973 million.

39.

15.2 Joint ventures

The following amounts representing the Group's 60% share of the post-acquisition income and expenses ofthe joint ventures are included within the income statement.

The following companies have been proportionately consolidated as joint ventures.


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40.

The following amounts representing the Group's 60% share of the assets and liabilities of the joint venturesat the reporting date are included within the balance sheet.

16. Commitments

The Group's share of capital commitments in respect of capital expenditure contracted for by the jointventures as at 31 March 2007 was £32,422,940.

Unitech Corporate Parks Plc

Registered Office

3rd Floor, Exchange House

54 - 62 Athol Street, Douglas

Isle of Man IM1 1JD


Documents

Chamberlain Unitech Single Sides · townships, residential complexes, commercial office space, IT Parks and SEZ developments, retail developments, hotels and amusement parks. From