TO THE MEMBERS OF GENUS POWER INFRASTRUCTURES LIMITED
We have audited the attached Balance Sheet of Genus Power Infrastructures Limited as at31st March, 2010 and the Profit and Loss Account for the year ended on that date annexedthereto and Cash Flow Statement for the year ended on that date. These financialstatements are the responsibility of the Companys management. Our responsibility isto express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by the CentralGovernment of India, in terms of sub-section (4A) of section 227 of the Companies Act,1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs4 and 5 of the said order.
Further to our comments in the Annexure referred to above, we report that:
i) We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit;
ii) In our opinion, the Company has kept proper books of accounts as required by law sofar as appears from our examination of those books;
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to insub-section (3C) of section 211 of the Companies Act, 1956;
v) On the basis of written representations received from the directors, as on 31 stMarch, 2010 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31 st March, 2010 from being appointed as a director interms of Clause (g) of sub-section (i) of section 274 of the Companies Act, 1956;
vi) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read with significant accounting policies and other notesthereon give the information required by the Companies Act, 1956 in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India:
a) in the case of Balance Sheet, of the state of affairs of the Company as at 31 stMarch, 2010;
b) in the case of Profit & Loss Account, of the profit for the year ended on thatdate and
c) in the case of Cash Flow Statement, of the cash flows for the year ended on thatdate.
For D. Khanna & Associates
Firm Registration Number: 012917N
M. No. 092140
Jaipur, August 06, 2010
Annexure to the Auditors Reports referred to in Paragraph 3 of our Report of evendate
(i) (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) The Company has phased programme of physical verification of its fixed assets atreasonable intervals, which, in our opinion, is reasonable having regard to the size ofthe Company and nature of its assets. During the year, the management has physicallyverified fixed assets and no material discrepancies were noticed on such physicalverification.
(c) The Company has not disposed off a substantial part of the fixed assets during theyear and therefore the going concern status of the company is not affected.
(ii) (a) We are informed that the physical verification of inventory has been conductedduring the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventory. As explained to us, nomaterial discrepancies noticed on physical verification of inventory as compared to bookrecords.
(iii) In respect of loans, secured or unsecured, granted or taken by the Companyto/from companies, firms or other parties covered in the register maintained under Section301 of the Companies Act, 1956:
(a) The Company has not granted loans to any party but taken from one party aggregatingto Rs.1.40 lacs during the year.
(b) In our opinion and according to the information and explanations given to us, therate of interest wherever applicable and other terms and conditions are not, prima facie,prejudicial to the interest of the Company.
(c) The said loan is repayable on demand and there is no repayment schedule.
(iv) 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 Companyand the nature of its business with regard to purchase of inventory, fixed assets and alsofor the sale of goods. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in internal control.
(v) (a) According to the information and explanations given to us, we are of theopinion that the transactions that need to be entered into the register maintained underSection 301 of the Companies Act, 1956 for the year have been so entered.
(b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements entered into the registermaintained under Section 301 of the Companies Act, 1956 in excess of Rs. 5,00,000/- inrespect of each party during the year have been made at prices which are reasonable havingregard to prevailing market price at the relevant time.
(vi) The Company has not accepted deposits from public within the meaning of theprovisions of section 58A and 58AA of the Companies Act, 1956 and rules made there underand requisite compliance made.
(vii) In our opinion, the Company has an internal audit system commensurate with thesize of the Company and nature of its business.
(viii) We have been informed that the Central Government has prescribed maintenance ofcost records under section 209(1) (d) of the Companies Act, 1956, for the productsmanufactured by the Company and company is maintaining the same.
(ix) (a) According to the information and explanations given to us and on the basis ofrecords produced before us, the Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fund, investoreducation protection fund, employees state insurance, income tax, sales tax, wealthtax, custom duty, excise duty, cess and other material statutory dues applicable to it.According to the information and explanations given to us, no undisputed arrears ofstatutory dues were outstanding as at 31st March, 2010 for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us and the records of thecompany examined by us, the particulars of Income Tax, Excise Duty, Service Tax, CST, Vatand Custom Duty as at 31st March, 2010, which have not been deposited on account ofmatters pending before appropriate authorities, are as under:-
|Name of the Statute ||Nature of disputed dues ||Amount ||Forum where |
| || ||(Rs. In lacs) ||disputes are pending |
|Income Tax ||Disallowances of Exp. ||483.27 ||Honble High Court |
|Income Tax ||Disallowances of Exp. ||750.00 ||Commissioner Income Tax-III |
|Excise & Service Tax ||Disallowances of Cenvat credit taken ||354.16 ||Commissioner (Anti Evasion), Commissioner (Appeals) & CESTAT |
|CST & VAT ||Ex-parte & Disallowances ||1043.15 ||Honble High Court, Tax Board & Dy. Commissioner (Appeals) |
(x) The Company has no accumulated losses and has not incurred any cash losses in thecurrent financial year or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to financial institution and banks.
(xii) According to the information and explanations given to us, during the year theCompany has not granted any loan on the basis of security by way of pledge of shares.
(xiii) In our opinion, the Company is not a chit fund, nidhi, mutual benefit fund or aSociety. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order 2003 isnot applicable to the Company.
(xiv) According to the information and explanations given to us, the Company is notdealing or trading in shares, securities, debentures and other investments. Accordinglyclause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable.
(xv) According to the information and explanations given to us, the Company has givenguarantee of Rs.5000.00 lacs for loan taken by other from banks or financial institutions.
(xvi) The Company has not raised new term loan during the year. To the best of ourknowledge, belief and according to the information and explanation given to us, the termloan outstanding at the beginning of the year were prima facie, applied by the company forthe purpose for which the loan were raised.
(xvii) According to the cash flow statement and other records examined by us and theinformation and explanations given to us, on an overall basis, fund raised on short termbasis have, prima facie, not been used during the year for long term investments and viceversa, other than temporary deployment pending application.
(xviii) The Company has made preferential allotment of 1100000 warrants convertibleinto equity shares at a price, which is not prejudicial to the interest of the Company, toone party covered in the register maintained under Section 301 of the Companies Act, 1956during the year.
(xix) According to information and explanation given to us, the Company has not issuedany debentures during the year.
(xx) The Company has not raised any money through a public issue during the year.
(xxi) On the basis of our examination and according to the information and explanationgiven to us, no fraud, on or by the Company, was noticed or reported during the course ofour audit.
For D. Khanna & Associates
Firm Registration Number: 012917N
M. No. 092140
Jaipur, August 06, 2010