AUDITORSTO THE MEMBERS OF INDIABULLS REAL ESTATE LIMITED
1. We have audited the attached Balance Sheet of Indiabulls Real Estate Limited("the Company") as at March 31, 2010 and the annexed Profit and Loss Account andthe Cash Flow Statement for the year ended March 31, 2010. These financial statements arethe responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, as amended by theCompanies (Auditor’s Report) (Amendment) Order,2004, issued by the Central Governmentof India in terms of sub-section (4A) of Section 227 of ‘The Companies Act,1956’ of India (the ‘Act’), we enclose in the Annexure, a statement on thematters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we report that:
(i) we have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purpose of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with bythis report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash FlowStatement, dealt with by this report comply with the Accounting Standards referred to insub-section (3C) of Section 211 of the Act;
(v) on the basis of written representations received from the directors, as at March31, 2010 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on March 31, 2010 from being appointed as a director in termsof Section 274 (1) (g) of the Act;
(vi) in our opinion and to the best of our information and according to theexplanations given to us, the said financial statements read with the notes thereon givethe information required by the Act, in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India:
(a) in the case of Balance Sheet, of the state of affairs of the Company as at March31, 2010;
(b) in the case of Profit and Loss Account, of the profit of the Company for the yearended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows of the Company for the yearended on that date.
For Sharma Goel & Co.
Chartered Accountants
FRN No:-000643N
Amar Mittal
Partner
Membership No. 017755
Mumbai, April 29, 2010
Annexure referred to in paragraph 3 of the Auditor’s Report of even date to theMembers of Indiabulls Real Estate Limited on the financial statements for the year endedMarch 31, 2010
1. In our opinion and according to the information and explanations given to us, thenature of the Company’s business / activities for the year ended March 31, 2010, issuch that paragraphs 4(viii), 4(x), 4(xiii) and 4(xix) of Order are not applicable to theCompany.
2. (a) The Company has maintained proper records, showing full particulars, includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified annually. In accordance with this programme, fixed assetswere verified during the year and no discrepancies were noticed on such verification. Inour opinion, the frequency of physical verification is reasonable having regard to thesize of the Company and the nature of its assets.
(c) The Company has not disposed off a substantial part of its fixed assets during theyear, so as to affect its going concern status.
3. (a) According to the information and explanations given to us, inventory has beenphysically verified by management during the year. In our opinion, the frequency ofverification is reasonable. However, there was no inventory at the end of the year.
(b) In our opinion and according to the information and explanations given to us, theprocedures for physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us, theCompany is maintaining proper records of inventory and no material discrepancies werenoticed on such physical verification.
4. In respect of loans, secured or unsecured, granted to or taken from companies, firmsor other parties covered in the register maintained under Section 301 of the CompaniesAct, according to the information and explanations given to us:
(a) The Company has granted unsecured loans to four subsidiary companies covered in theregister maintained under Section 301 of the Companies Act, 1956. The maximum amountinvolved in the transactions during the year aggregated to Rs. 1,563,459,872/- and thebalance outstanding at year end is Rs. 42,266,422/-.
(b) According to the information and explanation given to us, rate of interest, whereever stipulated and other terms and conditions of such loans are, in our opinion, primafacie not prejudicial to the interest of the Company.
(c) The payments of principal amount and interest where ever stipulated in respect ofsuch loans have been regular.
(d) There is no overdue amount as regard to principal amount and interest where everstipulated.
(e) The Company has taken unsecured loan from a subsidiary company covered in theregister maintained under Section 301 of the Companies Act, 1956. The maximum amountinvolved in the transactions during the year aggregated to Rs. 137,258,000/- and thebalance outstanding at year end is nil.
(f) According to the information and explanation given to us, rate of interest, whereever stipulated and other terms & conditions of such loan are, in our opinion, primafacie not prejudicial to the interest of the Company.
(g) The payments of principal amount and interest where ever stipulated in respect ofsuch loan have been regular.
5. In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company andnature of its business with regard to purchase of fixed assets, inventory and sale ofgoods & services. We have not observed any major weakness in the internal controlsystem during the course of the audit.
6. In our opinion and according to the information and explanations given to us, theCompany has not entered into any contracts or arrangements referred to in Section 301 ofthe Companies Act, 1956, the particulars of which are required to be entered in theregister required to be maintained under that section.
7. In our opinion and according to the information and explanations given to us, theCompany has not accepted any deposits from the public within the meaning of section 58Aand section 58AA or any other relevant provisions of the Companies Act, 1956 and theCompanies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted fromthe public. No order has been passed by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal.
8. In our opinion, the Company has an internal audit system commensurate with the sizeand nature of its business.
9. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company, amounts deducted / accrued in the books ofaccounts in respect of Provident Fund, Investor Education and Protection Fund,Employees’ State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, CustomsDuty, Excise Duty and any other material Statutory Dues have generally been regularlydeposited during the year by the Company with the appropriate authorities, to the extentapplicable. There were no dues on account of Cess under Section 441A of the Companies Act,1956 since the aforesaid section has not yet been made effective by the CentralGovernment. According to the information and explanations given to us, no undisputedamounts payable in respect of Provident Fund, Investor Education and Protection Fund,Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, CustomsDuty, Excise Duty, and other material statutory dues were in arrears, as at March 31, 2010for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and, there are no dues ofIncome tax, Wealth tax, Sales tax, Service tax, Customs duty and Excise duty which havenot been deposited on account of any dispute.
10. Based on our audit procedures and as per the information and explanations given bythe management, the Company has not defaulted in repayment of dues to financialinstitutions or banks or debenture holders. 11. The Company has not granted any loans andadvances on the basis of security by way of pledge of shares, debentures and othersecurities.
12. The Company has maintained proper records of the transactions and contracts inrespect of dealing in shares, securities, debentures and other investment and timelyentries have been made therein. All shares, securities, debentures and other investmentshave been held by the Company in its own name, except to the extent of the exemptiongranted under Section 49 of the Companies Act 1956. 13. According to the information andexplanations given to us, the terms and conditions of guarantees given by the Company forloans taken by others from banks and financial institutions, are not prima facieprejudicial to the interests of the Company.
14. To the best of our knowledge and belief and according to the information andexplanations given to us, in our opinion, term loans were, prima facie, applied for thepurposes for which such loans were obtained.
15. According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, funds raised on short-term basis, primafacie, have not been used for the long-term investment by the Company.
16. According to the information and explanations given to us, the Company has not madeany preferential allotment of shares to parties or companies covered in the registermaintained under Section 301 of the Companies Act, 1956.
17. The Company has not raised any monies by way of public issue during the year.
18. According to the information and explanation given to us, no material fraud on orby the Company has been noticed or reported during the year.
For Sharma Goel & Co.
Chartered Accountants FRN No:-000643N
Amar Mittal
Partner Membership No. 017755 Mumbai, April 29, 2010