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RTS Power Corporation
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« Mar 12
Auditor's Report (RTS Power Corporation) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of RTS Power
 Corporation Limited (''the Company''), which comprise the Balance Sheet
 as at 31st March, 2013, the Statement of Profit and Loss and Cash Flow
 Statement for the year then ended and a summary of significant
 accounting policies and other explanatory information.
 
 Management’s Responsibility for the Financial Statements
 
 Management is responsible for 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
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956 (“the Act”). This responsibility includes the
 design, implementation and maintenance of internal control 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.
 
 Auditor’s Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India.  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 disclosures in the financial statements. The procedures
 selected depend on the auditor’s 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 control relevant to the Company’s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances. An audit also
 includes evaluating the appropriateness of accounting policies used and
 the reasonableness of the accounting estimates made by management, 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 audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid 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:
 
 (i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2013; (ii) In the case of the Statement of
 Profit and Loss, of the loss 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.
 
 Other Matter Paragraph
 
 We state that Assets and Liabilities both amounting to Rs.113,45,68,880/-
 each and Profit Before Tax amounting to Rs. 80,17,444/- have not been
 audited by us and have been relied upon the report of the branch
 auditor.  However, remarks of the branch auditor, if any, have been
 duly considered in our report. Our opinion is not qualified in respect
 of this matter.
 
 Report on Other Legal and Regulatory Requirements
 
 1. As required by the Companies (Auditor’s 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 Act, we give in the Annexure
 a statement on the matters specified in paragraphs 4 and 5 of the
 Order.
 
 2.  As required by Section 227(3) of the Act, 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 purpose of our
 audit;
 
 b.  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;
 
 c.  The Balance Sheet, the Statement of Profit and Loss 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, the Statement of Profit and Loss
 and the Cash Flow Statement comply with the Accounting Standards
 referred to in sub-section (3C) of Section 211 of the Companies Act,
 1956 to the extent applicable.
 
 e.  On the basis of written representations received from the directors
 as on 31st March, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2013, from
 being appointed as a director in terms of clause (g) of sub-section (1)
 of Section 274 of the Companies Act, 1956.
 
 Annexure to Independent Auditor’s Report
 
 Referred to in Paragraph 1 under the heading of “Report on Other Legal
 and Regulatory Requirements” of our report of even date.
 
 (i) a. The Company has maintained proper records showing full
 particulars including quantitative details and situation of its Fixed
 Assets on the basis of available information.
 
 b.  Fixed Assets have been physically verified by the management during
 the year. In our opinion, the procedures of physical verification of
 fixed assets followed by the management are reasonable and adequate in
 relation to the size of the Company and nature of its business. No
 material discrepancies were noticed on verification of the assets that
 are physically verified.
 
 c.  In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 (ii) a. The inventories 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 explanation
 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.  The Company is maintaining proper records of inventory.
 Discrepancies noticed on physical verification as compared to book
 records were not material have been properly dealt with in the books of
 accounts.
 
 (iii) a. As informed, the Company has not granted any loan, secured or
 unsecured, to any firm, company or parties covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 b.  The Company has taken unsecured loan from eleven companies and
 three parties covered in the register maintained under Section 301 of
 the Companies Act, 1956. The maximum amount involved during the year
 was Rs. 183,596,673/- and year-end balance of loan taken was
 Rs.167,569,096/- (including interest).
 
 c.  In our opinion and according to information and explanation given
 to us, the rate of interest and other terms and conditions on which
 loans have been taken from companies and parties listed in the register
 maintained under Section 301 of the Companies Act, 1956 are not prima
 facie, prejudicial to the interest of the Company.
 
 d.  The Company has paid the principal and interest as per
 stipulations, wherever made.
 
 e.  There is no overdue amount of loan taken from companies, firms or
 other parties listed in the Register maintained under Section 301 of
 the Companies Act, 1956.
 
 (iv) In our opinion and according to the information & explanation
 given to us, there is an adequate internal control system commensurate
 with the size of the Company & nature of its business for purchases of
 inventory, fixed assets and for the sale of goods and services. During
 the course of our audit, we have not observed any continuing failure to
 correct major weaknesses in internal control system.
 
 (v) a. According to the information and explanations given to us, we
 are of the opinion that the transactions made in pursuance of contracts
 or arrangements that need to be entered in the register maintained
 under Section 301 of the Companies Act, 1956 have been so entered.
 
 b. In our opinion and according to the information & explanations given
 to us, the transactions made in pursuance of contracts or arrangements
 entered in the register maintained under Section 301 of the Companies
 Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of any
 party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time
 except in cases where comparison could not be made in the absence of
 similar transactions with other parties.
 
 (vi) On the basis of our examination of the books and records of the
 Company, in our opinion & according to the information & explanations
 given to us, the Company has not accepted any deposit from public
 during the year and therefore, the provisions contained in Section 58A,
 58AA or any other relevant provisions of the Act and Rules framed there
 under are not applicable to the Company.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the nature and size of its business.
 
 (viii) We have broadly reviewed the cost records maintained by the
 Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(1)(d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed cost records have been maintained. We have, however, not
 made a detailed examination of the cost records with a view to
 determine whether they are accurate or complete.
 
 (ix) a. The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Investor education and Protection Fund, Employees State Insurance,
 Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
 Duty and other statutory dues applicable to it. According to the
 information and explanations given to us, no undisputed amounts payable
 in respect of the aforesaid dues were outstanding as at 31st March,
 2013 for a period of more than six months from the date they became
 payable.
 
 b.  The disputed statutory dues that have not been deposited on account
 of disputed matters pending before appropriate authorities are as under
 :
 
 
 Name of the Statute          Nature of Dues           Amount (Rs.)
 
 Rajasthan Tax on Entry of    Entry Tax              1,134,451/-
 Goods in Local Area Act, 
 1999
 
 Rajasthan Tax on Entry of    Entry Tax                605,643/-
 Goods in Local Area Act, 
 1999
 
 Rajasthan Tax on Entry of    Entry Tax              2,238,619/-
 Goods in Local Area Act, 
 1999
 
 Rajasthan Ta x on Entry of   Entry Tax              1,105,952/-
 Goods in Local Area Act, 
 1999
 
 Income Tax Act, 1961         Income Tax             2,057,170/-
 
 Income Tax Act, 1961         Income Tax                22,104/-
 
 Uttar Pradesh Sales Tax      Penalty on             5,133,120/-
                              difference of UPST 
                              demand 
 
 Rajasthan VAT                VAT, Interest,         1,409,039/-
                              Penalty on Freight 
                              and insurance 
                              recovered
 
 
 
 Name of the Statute                                Forum where dispute 
                               Period                  is pending
 
 Rajasthan Tax on Entry of 
 Goods in local Area Act, 
 1999                          For Previous Years   Hon’ble Rajasthan 
                                                        High Court
 
 Rajasthan Tax on Entry of 
 Goods in Local Area Act, 
 1999                          F.Y. 2012-2013       Hon’ble Rajasthan
                                                        High Court
 
 Rajasthan Tax on Entry of 
 Goods in Local Area Act, 
 1999                          For Previous Years   Hon’ble Rajasthan 
                                                        High Court
 
 Rajasthan Tax on Entry of 
 Goods in Local Area Act, 
 1999                          F.Y. 2012-2013       Hon’ble Rajasthan
                                                        High Court
 
 Income Tax Act, 1961          A.Y. 2009-2010       Before Commissioner
                                                      of Income Tax 
                                                       (Appeals)
 
 Income Tax Act, 1961          A.Y. 2008-2009       Before Commissioner
                                                      of Income Tax 
                                                       (Appeals)
 
 Uttar Pradesh Sales Tax       F.Y. 2012-2013          Commissioner
                                                      (Appeals) Agra
 
 Rajasthan VAT                 F.Y. 2007-2008       Deputy Commissioner
                                                     (Appeals) Jaipur
 
 
 
 Name of the Statute    Nature of Dues             Amount (Rs.)
 
 Rajasthan VAT          VAT, Interest,           2,412,822/-
                        Penalty on Freight 
                        and insurance 
                        recovered
 
 Rajasthan VAT          VAT, Interest,           4,972,531/-
                        Penalty on Freight 
                        and insurance 
                        recovered
 
  
 Name of the Statute                      Forum where dispute 
                           Period         is pending
   
 Rajasthan VAT         F.Y. 2010-2011     Deputy Commissioner 
                                         (Appeals) Jaipur
 
 Rajasthan VAT         F.Y. 2011-2012     Deputy Commissioner 
                                         (Appeals) Jaipur
 
 
 (x) The Company does not have any accumulated losses at the end of the
 financial year. The Company has incurred cash loss during the financial
 year covered by the audit but has not incurred cash loss during the
 immediately preceding financial year.
 
 (xi) The Company has not defaulted in repayment of dues to banks or
 financial institutions. The Company has no debenture holders.
 
 (xii) As informed and explained to us, the Company has not granted any
 loans and advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund nidhi/mutual benefit
 fund/societies.
 
 (xiv) Since the Company is not dealing or trading in shares,
 securities, debentures and other investment, Clause 4 (xiv) of the
 Order is not applicable.
 
 (xv) According to the information and explanations given to us, the
 Company has not given guarantees for loans taken by others from banks
 or financial institutions during the period covered by the report and
 accordingly Clause 4 (xv) of the Order is not applicable
 
 (xvi) Terms loans obtained by the Company were applied for the purpose
 for which the loans were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we are of
 the opinion that there are no funds raised on short-term basis that
 have been used for long-term investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 during the year to parties and companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 (xix) During the period covered by our audit report, the Company has
 not issued any debentures.
 
 (xx) The Company has not raised any money from public issue during the
 year.
 
 (xxi) 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 any such case by the management.
 
 
 
 
                                             For A. C. BHUTERIA & CO.
 
                                                Chartered Accountants
 
                                        Firm Registration No: 303105E
 
 Place: 2, India Exchange Place,                       Mohit Bhuteria
 
 Kolkata – 700 001                                            Partner
 
 Dated :30th May, 2013                          Membership No. 056832
Source : Dion Global Solutions Limited
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