We have audited the accompanying standalone financial statements of
Suryachakra Power Corporation Limited (the Company), which
comprise the standalone Balance Sheet as at March 31,2015, standalone
the Statement of Profit and Loss,standalone the Cash Flow Statement and
a summary of significant accounting policies and other explanatory
information for the year then ended.
Management''s Responsibility for the Standalone Financial Statements:
The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the CompaniesAct, 2013 (the Act) with
respect to the preparation of these standalone 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 the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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 have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, 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 qualified audit opinion on the
Basis for Qualified Opinion
Attention is invited to:
(a) Note - 33 to the financial statements regarding revenue from
Andaman & Nicobar Administration (A&N Administration) -pendingfinal
agreement with A&NAdministration, we are unable to comment on the
extent of ultimate recoverability ofRs.49,344,300/- withheld by A&N
Administration during the year ended March 31, 2015(year ended
31.03.2014: Rs.5,32,99,282)and the total receivables including interest
accrued thereon as at March 31, 2015of Rs.35,80,82,014/ - (31.03.2014:
Rs.30,87,37,714) on account of amounts withheld which are subject to
confirmation by the A&N Administration.
(b) Note 34(a) to the financial statements regarding the company s
assessment that no provisioning is required against the carrying
amounts of its investments in subsidiary Suryachakra Global Enviro
Power Limited Rs. 22,27,79,241, despite the complete erosion of its net
worth and continued suspension of operations 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.
(c) Note 34(b) to the financial statements regarding its investment in
Suryachakra Energy (Chhattisgarh) Private Limited, a wholly owned
subsidiary of the company - Rs. 36,48,00,725. 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.
(d) Note 34(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. 70,59,96,278 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
(e) Note 35 to the financial statements regarding advances to
Suryachakra Thermal Energy (Andhra) Private Limited Rs.3,06,61,484 and
Suryachakra Thermal Energy (Madhya Pradesh) Private Limited
Rs.3,81,01,314 which are considered good and fully recoverable for the
reasons stated therein. We are unable to comment on the extent of the
(f) Note 36 to the financial statements regarding capital advances
considered good and fully recoverable for the reasons stated therein.
We are unable to comment on the extent of ultimate recoverability.
(g) Note 37to the financial statements regarding non-provision of
interest on loans from certain lenders on account of legal cases filed
by them for recovery of their dues. We are unable to comment on the
extent of interest expense and loss for the year ended March 31, 2015
and the cumulative liability and cumulative reserves and surplus up to
March 31, 2015.
(h) Note 39to the financial statements regarding the non-availability
of confirmation of balances for secured loans, trade payables,
creditors for capital goods and loans and advances. In the absence of
confirmation of balances, we are unable to comment on the impact of
adverse variances, if any, as at March 31, 2015.
The consequential impact of the above matters on the loss for the year
and the retained earnings as at March 31,2015 is indeterminable.
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis for Qualified Opinion paragraph above,
the aforesaid standalone 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, of the state of affairs of the Company as atMarch 31, 2015 and
its loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention toNote - 38 to the financial statements regarding the
winding up petition filed by one of the unsecured creditors of the
Company, which is pending for hearing before the Honourable High Court
of Andhra Pradesh.
Our opinion is not modified in respect of this matter.
Report Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order, 20015
(the Order) issued by the Central Government of India in terms of
Section 143 (11) of the Companies Act, 2013, we give in the Annexure a
statement on the matters specified in paragraph3 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) Except for the effects of the matters described in the Basis for
Qualified Opinion paragraph above, 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, 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) Except for the possible effects of the matters described in the
Basis for Qualified Opinion paragraph above, in our opinion, the
aforesaid standalone financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
e) The matters described in the Basis for Qualified Opinion paragraph
above, and matters described in the Emphasis of Matters paragraph above
in our opinion, may have an adverse effect on the functioning of the
f) On the basis of the written representations received from the
directors as on 31 March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2015
from being appointed as a director in terms of Section 164 (2) of the
g) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 37 & 38 to
the financial statements
ii) The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii) The following are the instances of delay in transferring amounts,
required to be transferred, to the Investor Education and Protection
Fund by the Company
(i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The management has conducted physical verification of major assets
during the year, which in our opinion is reasonable having regard to
the size of the Company and the nature of the assets. According to the
information and explanations given to us, no material discrepancies
were noticed on such verification
(ii) In respect of its inventories:
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
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) According to the information and explanations given to us, the
Company has granted secured and unsecured loans and advances to
companies covered in the register maintained under Section 189 of the
a) According to the information and explanations given to us, the terms
of the arrangement do not stipulate any repayment schedule for
principal and interest.
b) Hence, there is no overdue amount in respect of the above loans.
(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) According to the information and explanations given to us, the
Company has not accepted any deposits from public. Accordingly, the
provisions of clause 3(v) of the Order are not applicable to the
(vi) 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 148(1) 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.
fvu) a) The company is not regular in depositing undisputed statutory
dues including Provident Fund, Income tax, Sales tax , Service Tax and
material statutory dues applicable to it with the appropriate
authorities. According to the information and explanations given to us,
the provisions of employees state insurance, wealth tax custom duty,
excise duty and cess are not applicable to the company at present. The
following undisputed amounts were in arrears as at March 31, 2015 for a
period of more than six months from the date they became payable:
Tax Deduction at Source 47,32,154
Service Tax 5,90,280
Provident Fund 53,966
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.
c) In our opinion and according to the information and explanations
given to us, the amounts required to be transferred to investors
education and protection fund, in accordance with the relevant
provisions of the companies Act-1956 ( 1 to 1956) and rules made there
under has been transferred to such fund within time.
(viii) Subject to the effects of the matters described in the Basis for
Qualified Opinion paragraph of our report of even date, the accumulated
losses of the Company at the end of the financial year are not less
than 50% of its net worth and it has incurred cash losses in the
financial year under report and in the immediately preceding financial
(ix) In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to banks.
The period and the amount of default have been set out in the Appendix
to this report.
(x) In our opinion and according to the information and explanations
given to us, the Company has given guarantees for loans taken by its
subsidiary from banks or financial institutions. The terms and
conditions of the guarantees given by the company for loans taken by
one of its subsidiaries from Bunge Emissions Fund Limited are prima
facie not prejudicial to the interests of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans availed by the Company during the earlier
years have been applied for the purpose for which the loans were
(xii) 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 has been noticed
or reported during the year, nor have we been informed of such case by
for M BHASKARA RAO & CO.
Firm Registration No. 000459 S
Hyderabad, May 27, 2015 Membership No.201570