We have audited the accompanying financial statements of Regaliaa
Realty Limited (the Company), which comprise the Balance Sheet as at
March 31, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements 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 the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b) In the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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 appears from our examination of those
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
The Annexure referred to in paragraph 3 of our report of even date:
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the 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
(c) During the year, the company has not disposed off a major part of
the plant and machinery.
2. During the year the Company has taken unsecured loans, from a party
listed in the register maintained under section 301 of the Companies
Act, 1956. The terms and conditions of such advances granted are not
prima facie prejudicial to the interests of the Company. The Company
has not granted any loans, secured or unsecured, to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
3. 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 with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls.
4. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions 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 contracts or
arrangements entered in the registers maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
5. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
58A and 58AA of the Companies Act 1956 and the companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
6. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
7. The Central Government has not prescribed maintenance of cost
records under Section 209(l)(d) of the Companies Act, 1956 for the
8. (a) According to the records of the company, the company has not
been regular in depositing the provident fund dues with the appropriate
(b) According to the records of the company, there are no dues of sale
tax, income-tax, customs tax/wealth-tax, excise duty/cess which have
not been deposited on account of any dispute.
(c) According to the information and explanations given to us,
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and excise duty were outstanding, as at 31st March
2014 for a period of more than six months from the date they became
S. Nature of the statute Nature of Amount
No. the Dues (Rs. in lacs)
1. Income Tax Act, 1961 Income Tax 24.29
2. Income Tax Act, 1961 TDS 2.87
3. Employees State Insurance Act, 1948 ESI 1.86
4. Provident Fund Act, 1952 PF 0.52
5. Chapter V of Finance Act, 1994 Service Tax 6.38
The Company has accumulated losses at the end of the financial year and
it has also incurred cash losses in the current and immediately
preceding financial year.
10. Based on our audit procedures and on 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 and debenture holders, in accordance with freshly
negotiated terms and conditions of borrowings.
11. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditors'' Report) Order 2003 is not applicable to the Company.
13. In our opinion and according to the information and explanations
given by the management, the company is not dealing or trading in
14. According to the information and explanations given by the
management, the Company has not given any guarantee for loans taken by
others from bank or financial institutions.
15. According to the information and explanations given to us, the
Company has not taken any term loan during the year.
16. In our opinion, the funds raised on short-term basis have not been
used for long-term investment and vice-versa.
17. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act.
18. During the period covered by our audit report, the Company has not
issued any debentures.
19. The company has not raised any money by way of public issues
during the year.
20. Based upon 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 course of our
21. In our opinion, clause (ii) of para 4 of the Companies (Auditors''
Report) Order 2003 are not applicable to the Company at present.
For M/s. B. B. Naidu & Co.,
Firm Regn. No. 002291S
30th May 2014
Mem. No. 201168