1. We have audited the accompanying financial statements of Indiabulls
Real Estate Limited (the Company) which comprise the Balance Sheet as
at March 31, 2012 and the Statement of Profit and Loss and the Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Company''s management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the Standards on Auditing
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
issued by the Central Government of 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 the matters specified in
paragraph 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement, dealt with by this report are in agreement with the books of
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement, dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
v) On the basis of written representations received from the directors,
as at March 31, 2012 and taken on record by the Board of Directors, we
report that none of the directors are disqualified as at March 31, 2012
from being appointed as a director in terms of Section 274 (1) (g) of
vi) In our opinion and according to the information and explanations
given to us, they said financial statements read with the notes thereon
give the information required by the Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of Balance Sheet, of the state of affairs of the
Company as at March 31,2012;
(b) In the case of Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
(c) In the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
REPORT OF EVEN DATE
Based on the Audit Procedures performed for the purpose of reporting a
true and fair view on the financial statements of the company and
taking into the consideration the information and explanation given to
us and the books of accounts and other records examined by us in the
normal course of audit, we report that:
i) In respect of Fixed Assets of the Company and in our opinion:
a. The Company has maintained proper records, showing full
particulars, including quantitative details and situation of fixed
b. The Company has a programmer of physical verification of its fixed
assets by which they are verified annually. In accordance with this
programmer, fixed assets were verified during the year and no
discrepancies were noticed on such verification. In our opinion, the
frequency of the physical verification is reasonable having regards to
the size of the company and nature of fixed assets.
c. The Company has not disposed off substantial part of any fixed
assets during the year. Therefore the going concern assumption is not
ii) In respect of Inventories of the Company and in our opinion:
a. Inventories have been physically verified by management during the
year and the frequency of verification is reasonable.
b. The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification of inventory.
iii) In respect of loans, secured or unsecured, granted to or taken
from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, in our opinion:
a. The Company has granted unsecured loans to seven parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount outstanding at any time during the year respectively
for each of the parties at any time during the year aggregated to Rs.
17,432,429,369/- and the balance outstanding at year end is Rs.
b. In our opinion rate of interest, where ever stipulated and other
terms and conditions of such loans are, in our opinion, prima facie not
prejudicial to the interest of the Company.
c. The payments of principal amount and interest where ever stipulated
in respect of such loans have been regular.
d. There is no overdue amount with regard to principal amount and
interest where ever stipulated.
e. The Company has taken loan from one party covered in the register
maintained under Section 301 of the Companies Act, 1956.The maximum
amount outstanding at any time during the year aggregated to Rs.
401,472,880/- and the balance outstanding at year end is Rs.
f. In our opinion rate of interest, where ever stipulated and other
terms and conditions of such loans are, prima facie not prejudicial to
the interest of the Company.
g. The payments of principal amount and interest where ever stipulated
in respect of such loans have been regular.
iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and nature of its business
with regard to purchase of inventory, fixed assets and the sale of
goods & services. We have not observed any major weakness in the
internal control system during the course of the audit.
v) In our opinion, the Company has not entered into any contracts or
arrangements referred to in Section 301 of the Companies Act, 1956, the
particulars of which are required to be entered in the register,
maintained section 301.
vi) In our opinion, the Company has not accepted any deposits from the
public within the meaning of section 58A and section 58AA or any other
relevant provisions of the Act and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public. No order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
viii) The maintenance of cost records prescribed under section 209(1
)(d) of the Companies Act,1956, is not applicable to the company.
ix) In respect of disputed and undisputed Statutory Dues of the Company
and according to information and explanations given to us and on the
basis of our examination of the records of the Company
a. Amounts deducted / accrued in the books of accounts in respect of
Provident Fund, Investor Education and Protection Fund, Employees''
State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and any other material Statutory Dues have
generally been regularly deposited during the year by the Company with
the appropriate authorities, to the extent applicable. 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
Central Government. According to the information and explanations
given to us, no undisputed amounts payable in respect aforesaid dues
were in arrears, as at March 31, 2012 for a period of more than six
months from the date they became payable, wherever applicable.
b. According to the information and explanations given to us, the
demand of Rs. 1,46,26,094 for the Assessment Year 2009-10 has not been
deposited on account of dispute on account of disallowances under
Section 14A of Income Tax Act, 1961 .The appeal for the same is pending
in front of Commissioner of Income Tax Appeals, New Delhi.
x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current year and
immediately preceding financial year as well.
xi) Based on our audit procedures and in our opinion, the Company has
not defaulted in repayment of dues to financial institutions or banks
or debenture holders.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, the provisions of paragraph 4 clause (xii) of the Order
are not applicable.
xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
fund/society. Accordingly, the provisions of paragraph 4 clause (xiii)
of the Order are not applicable.
xiv) In our opinion the company is not dealing or trading in shares,
debentures, securities and other investments. Accordingly, the
provisions of paragraph 4 clause (xiv) of the Order are not applicable.
The investments in shares of subsidiary and other companies are held by
the Company in its own name except to the extent exemption granted
under section 49 of the Companies Act, 1956.
xv) In our opinion, the terms and conditions of guarantees given by the
Company for loans taken by others from banks and financial
institutions, are not prima facie .prejudicial to the interests of the
xvi) In our opinion and to the best of our knowledge and belief,
proceeds of term loans taken were, prima facie, applied for the purpose
it was obtained and no fresh term loan was obtained during the year.
xvii) In our opinion and on an overall examination of the balance sheet
of the Company, no funds have been raised on short-term basis.
xviii) In our opinion, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix) In our opinion and the records examined by us, the Company has
created securities/charges in respect of debentures issued.
xx) The Company has not raised any monies by way of public issue during
the year. Accordingly, the provisions of paragraph 4 clause (xx) of the
Order are not applicable.
xxi) In our opinion, no material fraud on or by the Company has been
noticed or reported during the period covered by our audit.
For Sharma Goel & Co.
FRN No: 000643 N
Membership No. 017755
Date: April 25, 2012