Report on the Financial Statements
We have audited the accompanying financial statements of The
Amalgamated Electricity Company Limited (the Company), which
comprise the Balance Sheet as at March 31, 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
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 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.
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.
In our opinion and to the best of our information , subject to above
qualification and according to the explanations given to us, the
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013.
(b) in the case of the statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matters
We draw your attention to the note 2 (xvii) (ii) of financial statement
in respect of contingent liability which states that the company is
liable to pay rent / compensation of Rs. 3,52,16,875/- from 1st
September, 2007 to 31st March, 2013 together with interest of Rs.
87,19,514/- consequent to the judgment of Hon''ble Bombay High Court
dated 13th March 2013. No provisions for the same has been made in the
books of accounts towards the referred liability due to which
the-expenses for current year have been understated by Rs.
4,39,36,389/-. We qualify the report accordingly.
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
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
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
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;and
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Referred to in Paragraph 3 of our Report of even date.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fixed
(b) All the assets have been physically verified by the management
during the year. No material discrepancies were noticed on such
(c) The Company has not disposed off substantial part of the fixed
assets during the year,
(ii) Considering the activity carried out during the year, in our
opinion the provision of clause 4(ii) of the Companies (Auditors''
Report) Order, 2003 are not applicable.
(iii) The Company has not granted or taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
registered maintained U/s. 301 of the Act. Hence the provision of
clause 4 (iii) (a), (b), (c), (d), (e) & (f) of the Companies (Auditors
Report) Order 2003 are not applicable.
(iv) In our opinion and according to the information and explanations
given to us and in view of the activities carried on by the Company,
the provision of clause 4(iv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
(v) According to the information and explanations given to us, we are
of the opinion that there were no contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956. Hence the provision of clause 4(v) (a) & (b) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
(vi) The Company has not accepted any deposits from the public during
the year, therefore, in our opinion the question of applicability of
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Act and the rules framed there under does
(vii) Considering the size of business and number of transactions as
carried out, the management is of the opinion that the company did not
require internal audit system.
(viii) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government U/s. 209(1 )(d) of the Companies
Act, 1956, in respect of the activities carried on by the company.
(ix) (a) The Company did not have any undisputed statutory dues except
Income Tax and Tax Deducted at source under
Income Tax Act, 1961 as under:
Nature of Dues Assessment Year Amount Rs. Due Date
Income Tax 2001 -02 3,80,360/- 27/10/2009
2002 - 03 4,12,659/- 27/10/2009
However, the company has made a claim for waiver interest on delayed
income tax refund to the extent of Rs. 3,65,056/- and Rs. 7,16,342
(inclusive of the Interest on delayed refund) have remained unadjusted
against above demand.
(b) According to the information and explanation given to us, there are
no dues of sales tax, income tax, customs duty, wealth tax, excise duty
and cess, which have not been deposited on account of any dispute.
* (x) In our opinion, the accumulated losses of the Company are not
more than fifty percent of its net worth. The company has incurred cash
loss during the current financial year but not in the immediate
(xi) The Company has no dues payable to financial institutions, banks
or debenture holders during the year.
(xii) 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, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause 4
(xiii) of the companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(xiv)The Company has maintained proper records of the transactions and
contracts in respect of shares and debentures and other securities and
timely entries have been made therein.
(xv) As per the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
(xvi)The Company has not taken term loans during the year.
(xvii)The Company has not raised any fund either short term or long
term during the year. Accordingly the clause 4(xvii) of the Companies
(Auditor''s Report) Order, 2003 is not applicable to the company.
(xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained U/s. 301 of
the Act during the year.
(xix)The Company has not issued any debentures and hence the question
of creating securities thereof does not arise.
(xx) The Company has not raised money by public issue during the year.
(xxi) According to the information and explanation given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For Ganesh & Rajendra Associates
Firm Reg no.103055W
Place: Mumbai Partner
Dated: 31st May, 2013 Membership no. 32939