Omaxe

1.  We have audited the attached Balance Sheet of Omaxe Limited, as at
 March 31, 2009, the Profit and Loss Account and also the Cash Flow
 Statement for the year ended on that date annexed thereto. These
 financial statements are the responsibility of the Companys
 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 Auditing Standards
 Generally Accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material 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 management, as well as evaluating the overall financial statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by Companies (Auditor Report) (Amendment) Order 2004 (together
 the Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Companies Act, 1956 (the Act),
 and on the basis of such examination of the books and records of the
 Company as we considered appropriate and the information and
 explanations given to us during the course of the audit, we enclose in
 the Annexure a statement on the matters specified in paragraphs 4 and 5
 of the said Order.
 
 4.  Further to our comments in the annexure referred to in paragraph 3
 above, we report that:
 
 i) a) We have obtained all the information and explanations, which to
 the best of our knowledge and belief were necessary for the purposes of
 our audit;
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company, so far as appears from our examination of those
 books;
 
 c) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of section 211 of the Act;
 
 ii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account,
 
 iii) On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the board of
 directors, we report that none of the director is disqualified as on
 March 31, 2009 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act;
 
 5 In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 significant accounting policies and other 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:
 
 i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009;
 
 ii) In the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 iii) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Annexure to Director Report
 
 (Referred to in paragraph 3 of our report of even date to the members
 of Omaxe Limited on the accounts for the year ended March 31, 2009)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets have been physically verified by the management at
 reasonable intervals, which in our opinion, is considered reasonable
 having regard to the size of the Company and the nature of its assets.
 No material discrepancies were noticed on such verification.
 
 (c) The Company has not disposed off a substantial part of fixed assets
 during the year, and accordingly, going concern is not affected.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventories 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 has maintained proper records of inventory. As
 explained to us, there were no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 (iii) (a) The Company has/had granted interest bearing unsecured loans
 to two subsidiary companies and interest free loan to one subsidiary
 company listed in the register maintained under section 301 of the Act.
 The maximum amount involved during the year was Rs.2423.26 mio and the
 year-end balance of loans granted to such companies was Rs.2423.26 mio.
 
 (b) According to the information and explanations given to us, the rate
 of interest and other terms and conditions of the loans given wherever
 applicable, are not, prima facie, prejudicial to the interest of the
 Company.
 
 (c) The principal amount of loan along with interest in respect of loan
 granted to two subsidiary is repayable on call. The Company has not
 made any call in respect thereof. In respect of loan granted to another
 subsidiary, the repayment thereof is linked to repayment by the Company
 to the bank, which is not yet due. Accordingly, no comments are being
 offered on timely repayment of principal and on overdue amounts.
 
 (d) The Company has taken unsecured loan from one subsidiary company
 and two other companies listed in the register maintained under section
 301 of the Act. The maximum amount involved during the year was Rs.
 682.46 mio and the year end balance of such loan taken was Rs. 622.46
 mio.
 
 (e) According to the information and explanation given to us, the rate
 of interest and other terms and conditions of the loan taken are not
 prima facie, prejudicial to the interest of the Company.
 
 (f) The principal amount of loan taken along with interest is repayable
 on call. The Company has not received any call in respect thereof.
 Accordingly, no comments are being offered on timely repayment of
 principal / interest and on overdue amounts.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory, fixed assets and with regards to the sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weakness in internal
 controls.  
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the transactions that need to be entered into
 the register required to be maintained in pursuance of section 301 of
 the Act have been so entered.
 
 
 (b) In our opinion and according to the information and explanations
 given to us, transactions made in pursuance of contracts or
 arrangements entered into the register required to be maintained in
 pursuance of section 301 of the Act and exceeding the value of rupees
 five lacs in respect of any party during the year have been made, other
 than the transactions for which comparable prices are not available, at
 prices which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 
 (vi) In our opinion, the Company has complied with the provisions of
 sections 58A, 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.
 
 (vii) The Company has an internal audit system, which in our opinion,
 is commensurate with the size of the Company and the nature of its
 business.
 
 (viii) As informed to us, the maintenance of cost records has not been
 prescribed by the Central Government under clause (d) of sub-section
 (1) of section 209 of the Act in respect of the activities of the
 Company.
 
 (ix) (a) According to the records of the Company, provident fund,
 employees state insurance, income tax, sales tax, work contract tax,
 wealth tax, service tax, cess and other applicable material undisputed
 statutory dues have been deposited regularly during the year with the
 appropriate authorities except for delays in some cases and there are
 no arrears of outstanding statutory dues as at the last day of the
 financial year concerned, for a period of more than six months from the
 date they became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of provident fund, employees state insurance, income tax,
 sales tax, work contract tax, wealth tax, service tax, cess and other
 applicable material statutory dues which have not been deposited as on
 March 31, 2009 on account of any dispute except the followings:
 
 Name of             Nature of    Financial Year
 Statute             dues         to which the matter
                                  pertains
 Punjab General 
 Sales Tax Act, 1948   Sales tax       March 31, 2003
 Punjab General 
 Sales Tax Act, 1948   Sales tax       March 31, 2005
 Haryana General 
 Sales Tax Act, 1973   Sales Tax       March 31, 2003
 Himachal Pradesh 
 General  Sales tax    Sales Tax       March 31, 2000 to
 Act, 1968                             March 31, 2004
 Haryana General 
 Sales Tax Act, 1973   Sales Tax       March 31, 2005
 Haryana General
 Sales Tax Act, 1973   Sales Tax       March 31, 2006
 U .P Trade Tax 
 Act, 1948             Sales Tax       March 31,2007
 Finance Act, 1994     Service Tax     2004-05 to 2007-08
 Finance Act, 1994     Service Tax     2003-03 to 2007-08
 Income Tax Act, 1961  Income Tax      March 31, 2002
 
                                        (Rupees in mio)
 
 Forum where dispute is pending              Amount
 
 outstanding
 
 Punjab General        Deputy Excise & Taxation Officer,        1.50 
 Sales Tax Act 1948    Chandigarh
 Punjab General        Excise & Taxation Officer, Mohaii        0.05
 Sales Tax Act 1948
 Haryana General       joint Deputy Excise & Taxation           0.09
 Sales Tax Act 1948    Commissioner (Appeals)  Faridabad
 
 Himachal Pradesh      Deputy Excise & Taxation Commissioner    0.20
 General               (Appeals) Mandi
 Sales Tax Act 1968
 Haryana General       Appeal filed against assessment order    1.73
 Sales Tax Act 1973
 Haryana General       Joint Excise & Taxation Commissioner     1.55
 Sales Tax Act 1973    (Appeals), Faridabad
 
 U.P. Trade tax        Appeal to be filed before               83.40
                       Joint Commissioner (Appeals)  Noida
 
 Finance Act 1994      Show cause Notice issued by             15.00
                       commissioner Service Tax A.E.Delhi
 
 Finance Act 1994      Show cause Notice issued by             14.10
                       commissioner Service Tax A.E.Delhi
 
 Finance Act 1994      Appeal pending before Income             6.64
                       Tax Appellate Tribunal (ITAT) F Bench,
                       New Delhi                  
 
 (x) The Company does not have any accumulated losses as at March 31,
 2009 and has not incurred cash losses during the financial year covered
 by our audit and the immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has got rescheduled its term loan from banks
 and financial institutions, according to which repayment terms have
 been deferred to a future date.
 
 Considering such rescheduling, we are of the opinion that company has
 not defaulted in repayments of dues to financial institutions and
 banks.
 
 (xii) In our opinion and according to the information and explanations
 given to us, no loans and advances have been granted by the Company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The Company is not a chit fund or nidhi / mutual benefit fund /
 society.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities. The
 Company has invested some funds in mutual funds and other securities.
 According to the information and explanations given to us, proper
 records have been maintained of the transactions and contracts and
 timely entries have been made there in. The investments have been held
 by the Company in its own name.  
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee on behalf of subsidiaries and others, the
 terms and conditions whereof in our opinion are not prima-facie
 prejudicial to the interest of the Company.  (xvi) According to the
 information and explanations given to us and records examined by us,
 the term loans have generally been applied for the purpose for which
 they were raised.
 
 (xvii)On the basis of an overall examination of the balance sheet of
 the Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis, which have been used for long-term investment.  
 
 (xviii)The Company has not made preferential allotment of shares to the
 parties covered in register maintained under section 301 of the Act.  
 
 (xix) According to the information and explanations given to us and the
 records examined by us, security or charge has been created in respect
 of the secured debentures.
 
 (xx) The Company has not raised money by way of public issue during the
 year.
 
 (xxi) During the course of the audit carried out and according to the
 information and explanations given to us, we have neither come across
 any instance of fraud on or by the Company, noticed or reported during
 the year nor have we been informed of such case by the management.
 
 
 
                                           For Doogar & Associates
                                             Chartered Accountants
                                                       M.K. Doogar
                                                  Partner (F-80077)
 
 Place: New Delhi
 Date: 30th June 2009