TO THE MEMBERS OF SURYACHAKRA POWER CORPORATION LIMITED,
Report on Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Suryachakra
Power Corporation Limited ("the Company"), which comprises the Standalone
Balance Sheet as at March 31, 2017, the Statement of Standalone Profit and Loss and
Standalone Cash Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to 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
principles generally accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, 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.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. 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
the disclosures in the financial statements. The procedures selected depend on the
auditors 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 financial controls relevant to the Companys preparation of the
financial statements that give a true and fair view in order
to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Companys Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion on the financial statements.
Basis for Qualified Opinion
Attention is invited to:
a) Note - 32 to the financial statements regarding recognition of rejections /
withheld amount by Andaman and Nicobar Administration (A&NA) - We are unable to
comment on the extent of ultimate recoverability of Rs.1,80,68,236/- (Previous year: Rs.
6,00,93,376) withheld by A & NA during the year ended March 31, 2017 and total
receivables as at March 31, 2017 - Rs. 16,06,69,297/-(as at March 31, 2016 - Rs.
14,26,01,061) which are subject to confirmation by the A&NA. Further, the company, in
earlier years, has also recognized interest aggregating to Rs. 12,75,74,329 on such
rejections / withheld amount which is also subject to confirmation by the A&NA.
b) Note - 35 to the financial statements regarding capital advances Rs. 8,52,65,723/-
(Previous year: Rs. 8,84,28,238 /-) considered good and fully recoverable for the reasons
stated therein. We are unable to comment on the extent of ultimate recoverability.
c) Note - 36 to the financial statements regarding non-provision of interest on loans
from lenders due to legal cases filed by them for recovery of their dues. We are unable to
comment on the extent of interest expense and loss for the year ended March 31, 2017 and
the cumulative liability and cumulative reserves and surplus up to March 31, 2017.
d) Note - 37 to the financial statements regarding the non-availability of confirmation
of balances for secured and unsecured loans / borrowings availed by the Company, trade
payables, creditors for capital goods and loans and advances granted by the Company. In
the absence of confirmation of balances, we are unable to comment on the impact of adverse
variances, if any, as at March 31, 2017.
The consequential impact of the above matters on the loss for the year and the retained
earnings as at March 31, 2017 is indeterminable.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matters described in the Basis for
Qualified Opinion paragraph above, the aforesaid Standalone 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, of the state of
affairs of the Company as at March 31, 2017 and its loss and its cash flows for the year
ended on that date.
Emphasis of Matter
Without qualifying our opinion, we draw attention to:
i) Note 33 and 34 to the financial statements regarding provisioning for investments
and advances given to subsidiaries and related parties and
ii) Note 38 of the financial statements regarding winding up petition u/s 433 (1) (e)
of the Companies Act, 1956 before the Honourable High Court of Andhra Pradesh.
Our opinion is not modified in the regard.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3
and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit;
b. Except for the effects of the matters described in the Basis for Qualified Opinion
paragraph above, 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 those books;
c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement
dealt by this Report are in agreement with the books of account;
d. Except for the possible effects of the matters described in the Basis for Qualified
Opinion paragraph above, in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e. The matters described in the Basis for Qualified Opinion paragraph above, and
matters described in the Emphasis of Matters paragraph above in our opinion, may have an
adverse effect on the functioning of the Company.
f. On the basis of written representations received from the directors as on March 31,
2017, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2017, from being appointed as a director in terms of Section 164 (2) of
the Act.
g. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in Annexure B; and
h. With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements - Refer Note 32 and 35to 38 to the financial
statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in financial statements as to the
holdings as well as dealings in Specified Bank Notes during the period from 08th November
2016 to 30th December 2016 and these are in accordance with the books of
account maintained by the Company. Refer Note 31 to the financial statements
|
M Bhaskara Rao & Co |
|
Chartered Accountants |
|
Firm Registration Number: 000459S |
|
V K Muralidhar |
|
Partner |
|
Membership Number: 201570 |
| Hyderabad, May 29, 2017 |
|
Annexure A to the Independent Auditors Report
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements
section of our report of even date to the members of Suryachakra Power Corporation
Limited)
(i) In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of its fixed assets.
(b) According to the information and explanations given to us, the fixed assets have
been physically verified during the year by the Management in accordance with a programme
of verification, which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals having regard to the size of the Company and the
nature of their assets, the discrepancies noticed on such verification were not material
and have been properly dealt with in the books of account.
(ii) In respect of its inventories:
a) The inventories consisting of raw materials, stores, spares and consumables have
been physically verified during the year by the management. In our opinion, the frequency
of verification is reasonable.
b) In our opinion and according to the information and explanations given to us, the
procedures of physical verification of inventories followed by the management are
reasonable and adequate in relation to the size of the company and the nature of its
business.
c) In our opinion and according to the information and explanation given to us, and on
the basis of our examinations of the inventory records, the Company is maintaining proper
records. The discrepancies noticed on physical verification of inventory as compared to
book records were not material to the operations of the Company and the same have been
properly dealt with in the books of account
(iii) According to the information and explanations given to us, the Company has
granted secured and unsecured loans secured or unsecured loans and advances to companies
covered in the register maintained under section 189 of the Act.
a) According to the information and explanations given to us, the terms of the
arrangement do not stipulate any repayment schedule for principal and interest.
b) Hence, there is no overdue amount in respect of the above loans.
(iv) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of section 185 and 186 of the Act, with respect
to the loans and investments made.
(v) According to the information and explanations given to us, the Company has not
accepted any deposits from the public. Accordingly paragraph 3(v) of the Order is not
applicable to the Company.
(vi) We have broadly reviewed the books of account relating to materials, labour and
other items of cost maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records prescribed under Section 148(1) of the Act
and we are of the opinion that, prima facie, the prescribed accounts and records have been
made and maintained. However, we are not required to and have not carried out a detailed
audit of the same.
(vii) According to the information and explanations given to us and according to the
books and records as produced and examined by us in accordance with the generally accepted
auditing practices in India, in respect of statutory dues:
(a) The Company is not regular in depositing undisputed statutory dues including
Provident Fund, Income Tax, Sales Tax, Service tax and material statutory dues applicable
to it with the appropriate authorities. According to the information and explanations
given to us, the provisions of employees state insurance, wealth tax custom duty, excise
duty and cess are not applicable to the Company at present. The following undisputed
amounts were in arrears as at March 31, 2017 for a period of more than six months from the
date they became payable.
| Particulars |
Amount (in Rs.) |
| Tax Deduction at Source |
69,19,263 |
| Service Tax |
11,85,339 |
| Provident Fund |
3,40,115 |
| VAT |
5,39,050 |
(b) According to the information and explanation given to us, there are no dues of
Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty or Value Added Tax which
have not been deposited on account of any dispute.
(viii) In our opinion and according to the information and explanations given to us,
the Company has defaulted in repayment of dues to banks. The period and the amount of
default have been set out in Note 5.3 and Note 7.2 to the Financial Statements.
(ix) The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments) and term loans during the year. Accordingly,
paragraph 3 (ix) of the Order is not applicable.
(x) During the course of our examination of the books and other records of the Company
carried out in accordance with the generally accepted auditing practices in India and
according to the information and explanations given to us, no material fraud by the
Company or on the Company by its officers or employees has been noticed or reported during
the year, nor have we been informed of such case by the management.
(xi) According to the information and explanations give to us and based on our
examination of the records of the Company, managerial remuneration has been paid /
provided during the year in accordance with the requisite approvals mandated by the
provisions of Section 197 read with Schedule V to the Companies Act 2013.
(xii) According to the information and explanations given to us and based on our
examination of the records, the Company is not a nidhi company. Accordingly, paragraph
3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
(xiv) According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year. Accordingly, paragraphs 3(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him during the year.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
|
For M. Bhaskara Rao & Co., |
|
Chartered Accountants |
|
Firm Registration No. 000459S |
|
V K Muralidhar |
|
Partner |
| Hyderabad, May 29, 2017 |
Membership No.201570 |
Annexure B to the Independent Auditors report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Suryachakra
Power Corporation Limited ("the Company") as of March 31, 2017 in
conjunction with our audit of the financial statements of the Company for the year ended
on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities
include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to companys policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
Because of the matter described in Disclaimer of Opinion paragraph below, we were not
able to obtain sufficient appropriate audit evidence to provide a basis for an audit
opinion on internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Disclaimer of Opinion
According to the information and explanations given to us, the company has not
documented its system of internal financial control over financial reporting on the
criteria based on the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.
Therefore we are unable to obtain sufficient appropriate audit evidence to express an
opinion on the adequacy and operating effectiveness of internal financial controls over
financial reporting.
We have considered the disclaimer stated above in determining the nature, timing, and
extent of audit tests applied in our audit of the financial statements of the Company, and
the disclaimer does not affect our opinion on the financial statements of the Company
|
for M. Bhaskara Rao & Co., |
|
Chartered Accountants |
|
Firm Registration No. 000459S |
|
V K Muralidhar |
|
Partner |
|
Membership No.201570 |
| Hyderabad, May 29, 2017 |
|
+91-9892691696
