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BGR Energy Systems

BSE: 532930  |  NSE: BGRENERGY  |  ISIN: INE661I01014  |  Engineering - Heavy

Explore BGR Energy connections « Mar 08
Auditor's Report Year End : Mar '09
1.  We have audited the attached Balance Sheet of BGR ENERGY SYSTEMS
 LIMITED as at 31st March 2009 and the related Profit and Loss account
 and Cash Flow Statement for the year ended on that date annexed
 thereto. These financial statements are the responsibility of the
 Companys 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 for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (the
 Order), as amended, issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956
 (the Act), we enclose in the Annexure a Statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the report referred to in paragraph 3
 above, 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 purposes of our
 audit;
 
 b) 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, Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and the
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 e) On the basis of the written representations received from the
 directors, as on 31sl March 2009, and taken on record by the Board of
 Directors, we report that none of the directors are disqualified as on
 31st March 2009 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Act;
 
 f) In our opinion, there were no dues, on account of cess under Section
 441A of the Act, since the aforesaid section has not yet been made
 effective by the Central Government of India as on 31st March 2009; and
 
 g) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2009;
 
 (ii) in the case of the Profit and Loss account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Annexure referred to in paragraph 3 of the Auditors Report to the
 Members of BCR ENERGY SYSTEMS LIMITED for the year ended 31st March
 2009. We report that:
 
 (i) (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation of fixed
 assets;
 
 (b). The Company has conducted physical verification of fixed assets at
 reasonable intervals and no material discrepancies were noticed on such
 verification; and
 
 (c) In our opinion, the fixed assets disposed off during the year were
 not substantial and therefore, do not affect the going concern
 assumption.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year;
 
 (b) In our opinion, 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 nature of its business; and
 
 (c) The company is maintaining proper records of inventory. There are
 no major material discrepancies noticed on physical verification
 between book stock and physical stock.
 
 (iii) (a) The company has granted interest free unsecured loans to 2
 parties covered in the register maintained under Section 301 of the
 Act. The maximum amount involved during the year and the
 year-end-balance of these loans amounts to Rs.1272.87 lakhs and
 Rs.1151.70 lakhs respectively;
 
 (b) In our opinion and as per the information and explanations given to
 us, the terms and conditions of the said loans are not prima facie
 prejudicial to the interest of the company;
 
 (c) In our opinion and on verification of the books of account, in
 respect of the above mentioned loans, there has been no regular
 repayment of the principal amount during the year;
 
 (d) Inour opinion, in respect of the above mentioned loans, reasonable
 steps have been taken by the company for recovery of the principal
 amount due. The outstanding principal amount as on 31st March 2009 is
 Rs.1151.70 lakhs;
 
 (e) The company has availed unsecured loans from 2 parties covered in
 the register maintained under Section 301 of the Act. The maximum
 amount involved during the year and the year-end-balance of such loans
 amounts to Rs.64.25 lakh and Rs.41.47 lakh respectively;
 
 (f) In our opinion, the terms and conditions of the loans availed are
 not prejudicial to the interest of the company; and
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists 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. Further, on the basis of our examination of
 the books and records of the company, and according to the information
 and explanations given to us, we have neither come across or have been
 informed of any continuing failure to correct major weaknesses in
 aforesaid internal control system.
 
 (v) (a) As perthe information and explanation furnished by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in Section 301 of the Act that need to be
 entered into the register maintained u/s 301 have been so entered; and
 
 (b) The transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) The company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and rules framed under.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size of the company and nature of its business.
 
 (viii) There is no order or notification by the Central Government
 prescribing maintenance of cost records by the Company u/s 209(1 )(d)
 of the Companies Act, 1956.
 
 (ix) (a) In our opinion and according to the information given to us
 and on the basis of our examination of the records of the Company,
 amounts deducted/accrued in the books of account in respect of
 undisputed statutory dues including Provident Fund, Employees State
 Insurance, Profession Tax, Income-tax, Sales-tax, Wealth Tax, Service
 tax, Customs Duty, Excise Duty, Cess and other dues have generally been
 regularly deposited during the year by the company with the appropriate
 authorities. As explained to us, the Company did not have any dues on
 account of Investor Education and Protection Fund.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Employees
 State Insurance, Profession Tax, Income- tax, Sales-tax, Wealth Tax,
 Service Tax, Customs Duty, Excise Duty, Cess dues were in arrears as at
 31st March 2009 for a period of more than six months from the date they
 became payable; and
 
 (b) As per the information and explanations provided to us, the
 following are the details of Disputed Tax Liabilities and the forum in
 which they are pending:
 
 Financial       Amount        Type of Tax    Forum in which the Appeal
 year            Rs. in Lakh   Liability      is lying in
 
 1997-98          39.23        Sales Tax      Honorable High Court,
                                              Andhra Pradesh
 
 1998-99           0.12        Sales Tax      Commercial Tax Officer,
                                              Andhra Pradesh
 
 1999-00           0.11        Sales Tax      Commercial Tax Officer,
                                              Tamilnadu
 
 2003-04           5.00        Sales Tax      Appellate Deputy
 	                                     Commissioner (CT), 
                                              Gunlur(AP)
 
 2006-07           2.59       Sales Tax       Appellate Deputy
                                              Commissioner (CT), 
                                              Gunlur(AP)
 
 2007-08           7.43       Sales Tax       Appellate Deputy
                                              Commissioner (CT), 
                                              Guntur(AP)
 
 2005-06          39.98       Sales Tax       Deputy Commissioner
                                              Appeals, Ernakulam 
                                              (Kerala)
 
 2007-08          61.76       Sales Tax       Honorable High Court,
                                              Kerala
 
 TOTAL           156.22    
 
 (x) The company does not have any accumulated losses at the end of the
 financial year. The company has not incurred cash losses during the
 financial year covered by the audit and in the immediately preceding
 financial year.
 
 (xi) In our opinion and according to the information given to us, the
 company has not defaulted in repayment of dues to any financial
 institution or banks.
 
 (xii) In our opinion and according to the explanations given to us, the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures or other securities.
 
 (xiii) The company is not a chit fund / nidhi / mutual benefit fund /
 society. Therefore, the provisions of clause (xiii) of paragraph 4 of
 the Order are not applicable to the company.
 
 (xiv) The company is not dealing or trading in shares, securities,
 debentures and other investments.
 
 (xv) The company has given guarantee for loans taken by others from
 banks or financial institutions, the terms and conditions whereof, in
 our opinion, are not prejudicial to the interest of the company.
 
 (xvi) During the year, the company has availed term loans for acquiring
 various fixed assets. As per the information and explanations provided
 to us, we are of the opinion that these loans were applied for the
 purpose for which the same were availed.
 
 (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
 investment by the company.
 
 (xviii) 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.
 
 (xix) The company has not issued any debentures.
 
 xx) The Company has raised a sum of Rs. 20,736 lakhs by way of initial
 public offering during the year ended 31st March 2008. As on 31st March
 2009, the company has deposited the net proceeds of initial public
 offering amounting to Rs. 19,012 lakhs in Fixed Deposits with banks
 pending utilization towards the objects of the issue.
 
 (xxi) In our opinion and according to explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                For MANOHAR CHOWDHRY & ASSOCIATES
 
                                Chartered Accountants
 
                                G R HARI
 Place : Chennai                Partner
 Date : June 22, 2009           Membership No.206386
Source : Religare Technova

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