1. We have audited the attached Balance Sheet of Puravankara Projects
Limited, (the ''Company'') as at 31 March 2011, and also the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date, annexed thereto (collectively referred as the ''financial
statements''). 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 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 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 (the
''Order'') (as amended), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956
(the ''Act''), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to above, we
report that
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. The financial statements dealt with by this report are in agreement
with the books of account;
d. On the basis of written representations received from the
directors, as on 31 March 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 March 2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Act;
e. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements dealt with by
this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act and the Rules framed there
under and 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, in the case of:
i) the Balance Sheet, of the state of affairs of the Company as at 31
March 2011;
ii) the Profit and Loss Account, of the profit for the year ended on
that date; and
iii) the Cash Flow Statement, of the cash flows for the year ended on
that date.
Annexure to the Auditors'' Report of even date to the members of
Puravankara Projects Limited, on the financial statements for the year
ended 31 March 2011.
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 consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during theyear.
(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 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) There are nine wholly-owned subsidiary companies and one
associate companies covered in the register maintained under Section
301 of the Act to which the Company has granted unsecured loans. The
maximum amount outstanding during the year was Rs2,396,616,448 and the
year-end balance was Rs2,013,868,975.
(b) In our opinion, the rate of interest and the interest-free nature,
where applicable, and other terms and conditions of such loans are not,
prima facie, prejudicial to the i nterest of the Company.
(c) The principal amounts, are repayable on demand and there is no
repayment schedule, the payment of interest,
where applicable, has been regular.
(d) In respect of the said loans, the same are repayable on demand and
there are no overdue amounts.
(e) The Company had taken interest-free loans from three parties
covered in the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year was Rs669,934,795 and the
year-end balance was Rs324,765,078.
(f) In our opinion, the interest-free nature and other terms and
conditions for such loans are not, prima facie, prejudicial to the
interest of the Company.
(g) The principal amounts, are repayable on demand and there is no
repayment schedule.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be entered into the register maintained under
Section 301 of the Act have been so entered.
(b) Owing to the unique and specialized nature of the items involved
and in the absence of any comparable prices, we are unable to comment
as to whether the transactions made in pursuance of such contracts or
arrangements have been made at prevailing market prices at the relevant
ti me.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) To the best of our knowledge and belief, the Central Government
has not prescribed maintenance of cost records under clause (d) of
sub-section (1) of Section 209 of the Act, in respect of the services
rendered by the Company. Accordingly, the provisions of clause 4(viii)
of the Order are not applicable.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have generally been
regularly deposited with the appropriate authorities, though there has
been a slight delay in a few cases. No undisputed amounts payable in
respect thereof were outstanding at the year-end for a period of more
than six months from the date they became payable.
b) The dues outstanding in respect of sales-tax, income-tax, custom
duty, wealth-tax, excise duty, cess on account of any dispute, are as
follows:
Name of the
statute Nature of dues Amount (Rs) Period to which the Forum
where
dispute
amount relates is
pending
Karnataka
Value Added
Tax Act, Value Added Tax
(including 22,322,464 2005 to 2006 Joint
Commis-
sioner
interest &
penalty on (Rs 11,162,122
is (Appeals)
an approximate
basis) paid under
protest)
The Kerala
Value Added
Tax Act, Value Added
Tax (including 619,292 2005-2006 Joint
Commis-
sioner
2003 interest) (Appeals)
Chapter V of
the Finance
Act, Service Tax
payable
(including 46,430,204 2002 to 2008 Customs,
Excise &
Service
1994 interest &
penalty) Tax
Appell-
ate
Tribunal
(x) In ouropinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
and the immediately preceding financial year.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to a financial institution or banks or debenture holders during the
year.
(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 clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Accordingly, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) The Company has not given any guarantees for loans taken by others
from banks or financial institutions. Accordingly, the provisions of
clause 4(xv) of the Order are not applicable.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which the loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Act. Accordingly, the provisions of clause 4(xviii)
of the Order are not applicable.
(xix) The Company has created a security in respect of debentures
outstanding during the year.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No. 001076N
per Aashish Arjun Singh
Bengaluru Partner
13May2011 Membership No. 210122
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