1. Purpose of the Audit Report:
   • Transparency: The audit report ensures that developers are financially sound and are using the funds collected from buyers appropriately.
   • Compliance: It ensures that developers are complying with the provisions of RERA and other applicable regulations.
   • Financial Health: It assesses the financial position of the real estate developer, including revenue from sales, costs, and liabilities, helping the authority monitor the builder’s financial stability.
2. Key Components:
   • Balance Sheet: A statement of assets and liabilities, showing the financial position of the developer.
   • Profit & Loss Account: A report of the developer's revenues and expenses over the audit period.
   • Cash Fow Statement: A breakdown of the developer's cash inflows and outflows.
   • Capital Expenditure: Details regarding major expenses incurred on the development or construction of the project.
   • Completion Status of Projects: A detailed report on the progress of projects and their completion timelines, ensuring they align with what was promised to buyers.
   • Utilization of Advance Funds: A key area of focus for the audit is to ensure that any advance payments made by buyers are used strictly for the construction of the particular project and not diverted for other purposes.
3. Who Prepares the Report:
   • The audit report must be prepared by a chartered accountant (CA) or a certified auditor.
   • The developer or builder is responsible for providing the necessary documentation and financial details for the audit.
4. Submission to RERA:
   • Developers are required to submit the annual audit report to the respective RERA authority in their state.
   • The report is typically submitted at the end of the financial year, usually within six months from the end of the financial year (i.e., by September 30th for the year ending March 31st).
   • If there are any discrepancies or non-compliance issues found during the audit, RERA can take necessary actions, such as penalties, suspension of registration, or other legal actions.
5. Importance of the Report for Homebuyers:
   • Protection of Interests: The audit report safeguards the interests of homebuyers by ensuring that the developers are not misusing the funds or delaying projects unnecessarily.
   • Trust and Transparency: By making the audit report public or accessible to interested parties, it enhances trust and transparency between developers and buyers.
   • Regulatory Compliance: Ensures developers are adhering to RERA rules, including timely project completion, proper use of funds, and adherence to agreements.

Consequences of Non-Compliance:

Failure to submit an annual audit report on time or providing misleading or false information can lead to:

• Penalties imposed by RERA.
• Suspension or cancellation of the developer's registration.
• Legal action or penalties as per the Real Estate (Regulation and Development) Act, 2016.

Timeline and Process:

• Prepare Financials: Developer prepares the necessary financial statements at the end of the financial year (March 31st).
• Audit: A qualified auditor conducts the audit and prepares the report.
• Submission to RERA: The audited financials are submitted to RERA by the due date (usually by September 30th).
• Review and Compliance Check: RERA reviews the audit and may ask for clarification or take action if discrepancies are found.