1. We have audited the attached Balance Sheet of Dalmia Bharat
Enterprises Limited (''the Company'') as at March 31,2011 and also the
Profit and Loss Account and the Cash Flow Statement for the year ended
on that date, annexed thereto. 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 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
3. As required by the Companies (Auditor''s Report) Order, 2003 (as
amended) (the Order) issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 and on
the basis of such checks as we considered appropriate and according to
information and explanations given to us, we enclose in the Annexure a
statement on the matters specified in paragraphs 4and 5 of the said
4. Further toourcomments in the Annexure referred toabove, we report
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
ii. 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
iii. 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
ofthe Companies Act, 1956;
iv. The Balance Sheet, Profit and Loss account and Cash Flow statement
dealt with by this report are in agreement with the booksof account;
v. On the basis of the written representations received from the
directors, as on March 31,2011 ,and taken on record by the Board of
Directors, we report that none ofthe directors is disqualified as on
March 31,2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 ofthe Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the
Accounting Policies and Notes thereon, give the information required by
the Companies Act, 1956,in the mannerso 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
b) in the case of Profit and Loss account, of the profit for
the yearendedon that date; and
c) in the case of Cash Flow statement, of the cash flows for
the yearendedon that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Dalmia Bharat Enterprises Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification as compared to book
(c) There was no disposal of a substantial part of fixed assets during
the year. Referring to note no. B-15 of Schedule-20, the assets and
liabilities of certain business undertakings transferred from DBSIL
have been transferred to and vested in DCB Land DPVLas per Scheme of
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year, except stocks lying
with third parties and in transit which have been verified with
reference to correspondence of third parties orsubsequent receipt of
goods. In ouropinion, the frequency of such 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 natureof its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material and have been properly dealt with in
the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4(iii) (a) to (d) of the Order are not applicable
to the Companyand hence not commented upon.
(b) The company has granted unsecured loan to a company which was not
covered under the register maintained under section 301 of the
Companies Act, 1956 at the time when loan was granted but got
subsequently covered under register maintained under section 301 of the
Companies Act, 1956. Apart from this loan, the company has not granted
any other loans, secured or unsecured, to companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956.the yearend balanceof such loan is Rs250.00 million.
(c) In our opinion, the rate of interest and other terms & conditions
of such loan are, prima facie, not prejudicial to the interest of the
(d) In respect of the aforesaid loans, the Company was regular in
payment of interest. We are explained that this loan is repayable on
demand and, therefore, there are no overdueamountsatthe yearend.
(iv) In our opinion and according to the information and explanations
given to us, 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. During the course of our audit carried out in accordance with
the generally accepted auditing practices in India, we have not
observed any major weakness or continuing failure to correct any major
weakness in the internal control system of the company in respect of
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs in respect of each
party have been entered into during the financial year at prices which
are reasonable having regard to the prevailing market pricesatthe
(vi) The company has not accepted any fixed deposits from public to
which the provisions of Section 58A and Section 58AA or any other
relevant provisions of the Companies Act 1956 including the Rulesframed
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government has not prescribed Rules for the
maintenance of cost records under clause (d) of sub-section (1) of
section 209 of the Companies Act, 1956 for any of the company''s
(ix) (a) 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
have generally been regularly deposited during the year with the
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other such undisputed statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to
us and as per the books and records examined by us,there are nodues in
respect of lncomeTax,Custom Duty,Wealth Tax, Excise Duty, Sales Tax,
Service Tax and Cess which have not been deposited on account of any
(x) The Company has no accumulated losses as at the end of the
financial year and has not incurred cash losses in the current year and
in the immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of
clause4(xiii) of the Order are not applicable to the Company.
(xiv) In respect of dealing/trading in shares, securities, debentures
and other investments, in our opinion and 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
therein. The shares, securities, debentures and other investments have
been held by the Company in its own name.
(xv) The Company has not given any guarantees against loans taken by
others from banks &financial institutions.
(xvi) In our opinion and on the basis of information and explanations
given to us, the company has not raised any term loan during the
financial year, hence the related reporting
requirement of the Order are not applicable.
(xvii)According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
(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 Companies Act, 1956.
(xix) The Company has not issued any debentures during the year nor are
there any debentures outstanding at the end of the year.
(xx) During the period covered by our audit report, the company has not
raised any money by way of public issue.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
For S.S. Kothari Mehta & Co.
Firm Registration No.: 000756N
per Arun K.Tulsian
Place: New Delhi
Date: May 26,2011