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Suryachakra Power Corporation Ltd.

BSE: 532874 | NSE: | Series: NA | ISIN: INE274I01016 | SECTOR: Power - Generation & Distribution

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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Auditor's Report

Report on the financial statements We have audited the accompanying financial statements of Suryachakra Power Corporation 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 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 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. Basis for Qualified Opinion Attention is invited to: (a) Note - 33 to the financial statements regarding revenue from Andaman & Nicobar Administration (A&N Administration) - pending final agreement with A&N Administration, we are unable to comment on the extent of ultimate recoverability of Rs.5,25,87,325/- withheld by A&N Administration for the year ended March 31, 2013 (year ended 30.06.2012: Rs.10,13,89,890) and the total receivables including interest as at March 31, 2013 of Rs.25,40,07,355/- (30.06.2012: Rs.30,52,52,497) on account of amounts withheld which are subject to confirmation by the A&N Administration. (b) Note - 34 to the financial statements, relating to coal trading receivables (discontinued operation) regarding which we are unable to comment on the extent of realisability of the dues. (c) Note 35(a) regarding the company''s assessment that no provisioning is required against the carrying amounts of its long term investments and loans extended to its subsidiary Suryachakra Global Enviro Power Limited Rs.1,030,215,096/- is presently necessary, for the reasons stated in the said note. We are unable to comment on the recoverability of the carrying amounts of the said investment or advances. (d) Note 35(b) to the financial statements regarding its investment in Suryachakra Energy (Chhattisgarh) Private Limited, a wholly owned subsidiary of the company - Rs.35,67,30,725/-. Completion and implementation of the power project of Suryachakra Energy (Chhattisgarh) Private Limited depends on the ability of the management to infuse the requisite funds. Hence, we are unable to comment on the recoverability of the carrying amounts of the said investment. (e) Note 35(c) to the financial statements regarding advances to Suryachakra Global Ventures Limited (SGVL), a wholly owned subsidiary of the company incorporated in Hong Kong Rs. 85,01,25,542 which in turn has advanced the said amount to M/s Symphony Trading and Investment Limited (STIL), Hong Kong for acquiring coal mines for the company/SGVL during the quarter ended June 2011. In the absence of information regarding financial worthiness of STIL / securities in favour of the company, we are unable to comment on the extent of recoverability of the advance. (f) Note 38 regarding review/reconciliation/confirmation of balances relating to borrowings (other than those from banks), receivables, loans and advances, advances on capital accounts and payables. In the absence of completion of such review/reconciliation/confirmation, we are unable to comment on the impact of the same on the financials The consequential impact of the above matters on the loss for the year and the retained earnings as at March 31, 2013 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 effects of the matters described in the Basis for Qualified Opinion paragraph, 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: i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 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. Emphasis of Matter We draw attention to Note - 36 to the financial statements regarding winding up petition filed by one of the unsecured creditors which is pending for hearing before the Honourable High Court of Andhra Pradesh. 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) 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: i) 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; 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and 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. v) 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 Act. SURYACHAKRA POWER CORPORATION LIMITED ANNEXURE TO THE AUDITORS'' REPORT (STATEMENT REFERRED TO IN 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. b) According to the information and explanations given to us, the management has conducted physical verification of major fixed assets during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were noticed on such verification. c) According to the information and explanations given to us, the Company, during the year, has not disposed off substantial part of fixed assets. Hence, the provisions of clause 4 (i) (c) of the Order is not applicable to the company. (ii) 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) a) According to the information and explanations given to us, the Company has granted unsecured loan to seven parties covered in the register maintained under Section 301 of the Act.The maximum amount involved during the year was Rs. 119,19,92,546 and the year-end balance of the loan granted to such parties was Rs.105,28,21,997. b) In our opinion and according to the information and explanations given to us, the terms and conditions on which the loans have been granted are not prima facie prejudicial to the interests of the Company. c) According to the information and explanations given to us, the terms of the arrangement do not stipulate any repayment schedule for principal and interest. d) There is no overdue amount in respect of the above loans. e) According to the information and explanations given to us, the Company has not taken any loans secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 3 (e), (f) and (g) of the Order are not applicable to the company. (iv) 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 with regard to purchase of inventories and fixed assets and for sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control system. (v) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements (except unsecured loans taken from the parties stated in para (iii) above), referred to under section 301 of the Act, that need to be entered into the register maintained under section 301 of the Act have been so entered. (vi) According to the information and explanations given to us, the Company has not accepted any deposits from public. Accordingly, the provisions of clause 4(vi) of the Order is not applicable to the company. (vii) In our opinion and according to the information and explanations given to us, the scope and coverage of the internal audit system needs to be strengthened to make it commensurate with the size and the nature of its business. (viii) 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 209(1)(d) 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. (ix) a) The company is not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, the following undisputed amounts were in arrears as at March 31, 2013 for a period of more than six months from the date they became payable: Rupees Tax Deduction at Source 69,37,541 Service Tax 3,10,904 Provident Fund 3,20,180 VAT 5,46,250 Professional Tax 1,400 b) According to the information and explanations given to us, there were no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess which have not been deposited on account of any dispute. (x) Subject to the effects of the matters described in the Basis for Qualified Opinion paragraph of our report of even date, the accumulated losses at the end of the year does not exceed 50% of its net worth at the end of the year. The company has incurred cash losses in the financial year under report; however, the company has not incurred cash losses in the immediately preceding financial year. (xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to banks. Details of the same are stated in the Appendix to this report. (xii) According to the information and 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 and other securities. (xiii) In our opinion, the Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the company. (xiv) In our opinion and according to information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company. (xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company for loans taken by one of its subsidiaries from banks or financial institutions are prima facie not prejudicial to the interests of the Company. (xvi) To the best of our knowledge and belief and according to information and explanations given to us, in our opinion, the term loans availed during the earlier years by the Company were, prima facie, applied by the Company for the purposes for which the loans were obtained. (xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds were raised on short term basis which have been used for long term purposes. (xviii) During the year under report, 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) According to the information and explanations given to us, no debentures have been issued by the Company. Hence, the provisions of clause 4(xix) of the Order are not applicable to the Company. (xx) In our opinion and according to the information and explanations given to us, the Company has not raised any money by public issue during the year. Hence, the provisions of clause 4(xx) of the Order are not applicable to the Company. (xxi) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us, no instance of fraud on or by the Company was reported during the year, nor have we been informed of such case by the management. For M.BHASKARA RAO & CO; Chartered Accountants Firm Registration No. 000459 S V.K. MURALIDHAR Partner Membership No. 201570 Hyderabad, May 24, 2013