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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

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. Auditor''s Responsibility: 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 financial statements. 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 the advance. (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 ultimate recoverability. (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. Qualified Opinion 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 Company. 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 Act. 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 losses. 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 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) 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 Act. 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 company. (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: Rupees Tax Deduction at Source 47,32,154 Service Tax 5,90,280 Provident Fund 53,966 VAT 5,46,250 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 year. (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 obtained. (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 the management. for M BHASKARA RAO & CO. Chartered Accountants Firm Registration No. 000459 S V.K. MURALIDHAR PARTNER Hyderabad, May 27, 2015 Membership No.201570