1. We have audited the attached Balance Sheet of Mahindra Lifespace
Developers Limited as at 31st March 2009 and the Profit and Loss
Account and the Cash Flow Statement of the Company 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 statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we give 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:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
b) 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 the
c) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement comply with the Accounting Standards referred
to in sub- section (3C) of section 211 of the Companies Act, 1956.
e) Without qualifying our opinion, we draw attention to:
i. Note No. 7 (c) of Schedule 20 of the accounts, we have relied on
management representation, due to the resolution of matter being
dependent on future events whose outcome is not known, regarding
realisability of construction work in
progress, project advances and interest accrued thereon of Rs.6,873.11
lakhs on account of a project, where commencement of construction has
been delayed on account of a dispute between the land owner and the
Company, which is referred to arbitration.
ii. Note No. 9 of Schedule 20 regarding reliance on management owing to
the technical nature of estimates of the percentage of completion,
costs to completion and the projections of revenues expected from
projects and realisability of Construction work in progress.
iii. Note No. 4 of Schedule 20 regarding write back of deprecation of
Rs. 817.24 lakhs due to the change in the method of charging
depreciation from Written Down Value to Straight Line Method, due to
which profit for the year and reserves are higher by Rs. 870.06 lakhs.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the notes
thereon give the information required by the Companies Act, 1956, in
the manner so required, 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 31st March, 2009,
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date, and
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2009, and taken on record by the Board of
Directors, we report that, none of the Directors is disqualified as on
31st March, 2009 from being appointed as a Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT
Referred to in Paragraph (3) of the Auditors Report of even date to
the Members of Mahindra Lifespace Developers
Limited ended 31st March, 2009.
1) (i) The Company is maintaining proper records showing
full particulars, including quantitative details and situation of fixed
(ii) The Company has a program for physical verification of fixed
assets at periodic intervals. In our opinion, the period of
verification is reasonable having regard to the size of the Company and
the nature of its assets. Discrepancies reported on such verification
have been properly dealt in the accounts.
(iii) In our opinion, the disposal of fixed assets during the year does
not affect the going concern assumption.
2) The Management has conducted physical verification of inventory at
reasonable intervals. 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.
The Company is maintaining proper records of inventory and no material
discrepancies were noticed on physical verification.
3) The Company has not granted or taken any loans, secured or
unsecured, to or from companies, firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956.
Therefore, the provisions of sub- clause (b), (c), (d), (e), (f) and
(g) of sub-para (iii) of para 4 of the Order is not applicable.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchases of inventory, fixed assets and for the sale
of goods and services. In our opinion and according to the information
and explanations given to us, there is no continuing failure to correct
major weaknesses in internal control.
5) (i) In our opinion and according to the information and
explanations given to us, there were no transactions with any party
that needed to be entered in the Register maintained in pursuance of
section 301 of the Companies Act, 1956.
(ii) As there are no transactions in case of any party that need to be
entered in the Register maintained pursuant to section 301 of the
Companies Act, 1956, sub-clause (b) of sub-para (v) of Para 4 of the
Order is not applicable.
6) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of section 58A and 58AA of the Companies Act, 1956,
and the rules framed thereunder.
7) The Company has an internal audit system, which in our opinion is
commensurate with the size of the Company and nature of its business.
8) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under section 209(1)(d) of the
Companies Act, 1956, in respect of the activities carried on by the
9) (i) According to the records of the Company, the
Company is generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, cess and other statutory dues
applicable to it with the appropriate authorities. According to the
information and explanations given to us, no undisputed amounts payable
in respect of Income tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty and Excise Duty were outstanding, at the year end for a period of
more than six months from the date they became payable.
(ii) According to the information and explanations given to us, there
are no dues of Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise
Duty or Cess outstanding on account of any dispute, other than four
cases of disputed Income Tax demands as under:
Sr. Assessment Nature of Amount Forum where
No. Year Dues Rs. in lacs case is pending
1 2004-05 Income tax 664.79 Commissioner of
Income Tax(Appeals) -
appeal being filed
2 2006-07 Penalty 181.16 Commissioner of
Income Tax (Appeals)
10) The Company does not have accumulated losses at the end of the
financial year and it has not incurred any cash losses in the current
year and in the immediately preceding financial year.
11) According to the information and explanations given to us and based
on the documents and records produced before us, the Company has not
defaulted in repayment of dues to banks.
12) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares and other securities.
13) In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
14) In our opinion, the Company has maintained proper records of the
transactions and contracts of the investments dealt in by the Company
and timely entries
have been made therein. The investments made by the Company are held in
its own name except to the extent of the exemption under section 49 of
15) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the terms and conditions whereof are
prejudicial to the interest of the Company.
16) As informed to us, the term loans were applied for the purpose for
which the loans were obtained.
17) According to the information and explanations given to us on an
overall examination of the Balance Sheet and Cash Flows of the Company,
we report that the Company has not utilized funds raised on short-term
basis for long term investment.
18) There is no preferential allotment of shares during the year.
19) The Company did not issue any debentures during the year.
20) The management has disclosed in the annual accounts, the end use of
monies raised through the issue of shares to Qualified Institutional
Buyers and the same has been verified by us.
21) Based on the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For and on behalf of For and on behalf of
Kalyaniwalla & Mistry B. K. Khare & Co.
Chartered Accountants Chartered Accountants
Viraf R. Mehta Padmini Khare Kaicker
M. No. 32083 M. No. 44784
Mumbai: 24th April, 2009 Mumbai: 24th April, 2009