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CESC

BSE: 500084  |  NSE: CESC  |  ISIN: INE486A01013  |  Power - Generation/Distribution

Explore CESC connections « Mar 08
Auditor's Report Year End : Mar '09
1.  We report that we have audited the attached Balance Sheet of CESC
 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, all of which we have signed under reference to this report.
 These financial statements are the responsibility of the Company’s
 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 misstatements. 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 the 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 (Auditor’s Report) Order, 2003 as
 amended by the Companies (Auditors’ Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of the Companies Act, 1956 of India (‘The Act’) and on
 the basis of such checks of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us during the course of our audit, we give in the
 attached Annexure, a statement on matters specified in paragraphs 4 and
 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that :
 
 i. We have obtained all the information and explanations, which, to the
 best of our knowledge and belief, were necessary for the purposes of
 the audit.
 
 ii. 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 books.
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 iv. In our opinion, the Balance Sheet and Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 requirements of the accounting standards referred to in sub-section
 (3C) of Section 211 of ‘The Act’
 
 v. On the basis of written representations received from the directors
 as at 31st March 2009, which have been taken on record by the Board of
 Directors, we report that none of the directors of the Company is
 disqualified as at 31st March 2009 from being appointed as a director
 in terms of clause (g) of sub-section (1) of Section 274 of ‘The Act’.
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, the Balance Sheet, Profit and Loss
 Account and Cash Flow Statement together with the notes thereon and
 attached thereto, 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 case of the Balance Sheet, of the state of the affairs of the
 Company as at 31st March, 2009;
 
 b.  in case of the Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 c.  in case of the Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure to the Auditors’ Report
 
 [Referred to in Paragraph 3 of our report of even date to the members
 of CESC Limited on the financial statements for the year ended 31st
 March 2009]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the Company, except those in the transmission
 and distribution system for which, we have been informed that, physical
 verification is not practicable, have been physically verified by the
 management according to a phased programme designed to cover all items
 over a period of three years, which in our opinion is reasonable having
 regard to the size of the company and nature of its assets. Pursuant to
 the programme, a portion of the fixed assets have been physically
 verified by the management during the year and no material
 discrepancies between book records and physical inventory have been
 noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  (a) The inventories (excluding inventories in transit) have been
 physically verified by the management during the year. In respect of
 inventories in transit, these were verified with reference to
 subsequent receipts. 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 inventory
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) The Company has not granted any loan, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under Section 301 of ‘The Act’.
 
 (b) The Company has not taken any loan, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of ‘The Act’.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for
 purchase of inventory, fixed assets and for sale of energy / 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 nor have been informed of any
 continuing failure to correct major weaknesses in the aforesaid
 internal control system.
 
 5.  In our opinion and according to the information and explanations
 given to us, there are no contracts or arrangements referred to in
 Section 301 of ‘The Act’ that need to be entered into the register
 required to be maintained under that section.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA of ‘The Act’ and the Companies (Acceptance of Deposits)
 Rules, 1975 with regard to the deposits accepted from the public.
 According to the information and explanations given to us, no order
 under the aforesaid Sections has been passed by the Company Law Board
 on the Company.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of product where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub- section (1) of Section 209 of ‘The
 Act’ and are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 provident fund, investor education and protection fund, employees’
 state insurance, income- tax, sales-tax, wealth tax, service tax,
 customs duty and other material statutory dues, as applicable, with the
 appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues as at
 31st March 2009 which have not been deposited on account of a dispute,
 are as follows :
 
 Name of the           Nature of dues
 statute
 
 West Bengal           Sales tax on
 Sales Tax Act,        meter rentals
 1994
 Water (Prevention     Water Cess and
 and Control of        interest thereon
 Pollution) Cess
 Act, 1977
 Same as above         Same as above
 
 Amount                Forum where
 (Rs.Crores)           dispute is pending
 
 0.30                  Hon’ble High
                       Court at Calcutta
 11.16                 Hon’ble High
                       Court at Calcutta
 0.31                  West Bengal
                       Pollution Control
                       Board  Appellate
                       Committee
 
 10.  The Company has no accumulated losses as at 31st March 2009 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations given to us, during the year the Company
 has not defaulted in repayment of dues to any financial institution or
 bank or debenture holders as at the balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion, and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  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’ during the year.
 
 19.  The Company has not issued any debentures during the year and
 accordingly the question of creation of security or charge does not
 arise.
 
 20.  The management has disclosed the end use of monies raised by
 public issue (refer Note 8 (a) in Schedule 13) and the same has been
 verified by us.
 
 21.  During the course of our examination of the books and 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, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management except in cases of
 theft of electricity reported by the loss control cell of the Company
 the amount for which is not ascertainable.
 
                                                     Prabal Kr. Sarkar
                                                     Partner
                                                 Membership No.: 52340
 
                                 For and on behalf of LOVELOCK & LEWES
 Kolkata, 22nd May, 2009                         Chartered Accountants
Source : Religare Technova

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