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Bil Energy System Ltd.

BSE: 533321 Sector: Metals & Mining
NSE: BILENERGY ISIN Code: INE607L01029
BSE LIVE 15:14 | 28 Apr 0.67 -0.03
(-4.29%)
OPEN

0.67

HIGH

0.67

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0.67

NSE 14:43 | 07 Oct Stock Is Not Traded.
OPEN 0.67
PREVIOUS CLOSE 0.70
VOLUME 5800
52-Week high 1.19
52-Week low 0.58
P/E 4.47
Mkt Cap.(Rs cr) 7.08
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.73
Sell Qty 5000.00
OPEN 0.67
CLOSE 0.70
VOLUME 5800
52-Week high 1.19
52-Week low 0.58
P/E 4.47
Mkt Cap.(Rs cr) 7.08
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.73
Sell Qty 5000.00

Bil Energy System Ltd. (BILENERGY) - Auditors Report

Company auditors report

To the Members of BIL ENERGY SYSTEMS LIMITED.

Report on the Financial Statements : We have audited the accompanying financialstatements of Bil Energy Systems Limited ("the Company") which comprise theBalance Sheet as at March 31 2016 the Statement of Profit and Loss and Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information.

Management’s Responsibility for the Financial Statements : Management isresponsible for the preparation of these financial statements that give a true and fairview of the financial position financial performance and cash flows of the Company inaccordance with the Accounting Principles generally accepted in India including AccountingStandards referred to in Section 133 of the Companies Act 2013 read with Rule 7 of theCompany (Accounts) Rules 2014. This responsibility includes the design implementationand maintenance of internal control relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility : Our responsibility is to express an opinion onthese financial statements based on our audit. We conducted our audit in accordance withthe Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion.

Basis for Qualified opinion :

a) With regard to pending conformation of balances

The company has sent letters to customers in respect of trade receivables forconfirming balances outstanding as at March 31 2016 but in most of the cases thecustomers have not sent written confirmation confirming the balance outstanding as atMarch 31 2016. In the absence of confirmation any provision to be made for adversevariation in the carrying amounts of trade receivable is not quantified.

b) Regarding non provision of demand of Rs.215.82 Crores received from State Bank ofIndia in respect of Corporate Guarantee given by the company in respect of Loan Facilitiesavailed by Bil Power Limited

The lender Bank of Bilpower Limited has pursuant to certain corporate guarantees givenby the company demanded from the company their dues from Bilpower Limited amounting toRs.215.82 crores. No provision has been made in the accounts for the probable loss thatmay arise on account of above demand of Rs.215.82 crores.

c) Regarding non provision of Interest on various loans availed from State Bank ofIndia for the financial year 2015-16

The Company has not provided for interest payable to State Bank of India amounting toRs 1179.54 Lakhs for the year ended 31st March 2016. The Company has not made anyprovision for penal interest claimed by the bank. As a result the loss for the year ended31st March 2016 is understated by Rs. 1179.54 Lakhs & current liabilities as at 31stMarch 2016 are also understated by Rs. 1179.54 Lakhs and also reserves are overstated byRs.1179.54 Lakhs. The amount of penal interest cannot be quantified as the details havenot been received from the bank. Also the company has not provided for interest amountingto Rs. 1045.12 Lakhs for the financial year 2014-15 as a result the accumulated losses ason 31st March 2016 are understated by Rs. 2224.68 lakhs and also current liabilities areunderstated by Rs.2224.68 lakhs. The amount of penal interest cannot be quantified as thedetails have not been received from the bank.

d) Regarding interest free loan given by the company.

Loan and advances given includes 4 parties to whom interest free loans given of Rs.630.19 Lakhs.

Qualified Opinion : In our opinion and to the best of our information and accordingto the explanations given to us except for the effects of the matters described in thebasis for qualified opinion paragraph the said financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith 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 March31 2016; and

b) in the case of the Profit and Loss Account of the Loss for the year ended on thatdate.

c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Sub-Section (11) of Section 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 of the Order.

2. As required by section 143(3) of the Act we report that:

a) We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss dealt with by this Report are inagreement with the books of account;

d) Except for the effects of the matters described in the basis for qualified opinionparagraph in our opinion the Balance Sheet the Statement of Profit and Loss comply withthe Accounting Standards Section 133 of the Companies Act 2013 With Rule 7 of Companies(Accounts) Rules 2014;

e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of clause of Section164(2) of the Companies Act 2013;

f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. There are pending litigations against the company but the impact of such litigationon the financial position of the company is undetermined.

ii. The company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Bansal Bansal & Co.
Chartered Accountants
FRN: 100986W
Manoj Agarwal
Place : Mumbai Partner
Date : 30th May 2016 Membership No.: 107624

Annexure A to Independent Auditor’s Report

The annexure referred to in our report to the member of Bil Energy System Limited forthe year ended 31st March 2016 we report that :

1. In respect of its Fixed Assets :

a. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b. As informed to us by the management the Company has a policy of physicallyverifying fixed assets in a phased manner over a period which in our opinion isresponsible having regard to the size of the Company and the nature of its assets. We areinformed that there were no material discrepancies noticed on such verification and thesame has been properly dealt in the books of account.

c. According to the information and explanations given to us the title deeds ofimmovable properties of the Company are held in the name of Company.

2. In respect of its inventories:

a. As explained to us that inventory has been physically verified during the year bythe management at regular intervals during the year.

b. In our opinion and according to the information given to us the procedures ofphysical verification of inventories followed by the management were reasonable andadequate in relation to the size of the entity and nature of their business.

c. In our opinion and according to the information given to us proper record ofinventories has been maintained and no material discrepancies were noticed on physicalverification.

3. According to information and explanation given to us the company has grantedinterest free unsecured loans and advances to four parties covered in the registermaintained under section 189 of the Companies Act.

a. Except for the fact that these loans and advances are interest free in our opinionand according to the information and explanation given to us the other terms andconditions of loans given are not prima facies prejudicial to the interest of the company.

b. The principle amount is repayable over the period of two to three years. c. Inrespect of the aforesaid loans there is no overdue amount.

4. In our opinion in respect of loans investments guarantees and security theprovisions of section 185 & sec 186 have not been complied. The details of same aregiven below :

Name of Party Relationship Balance as on Nature of Transaction
Tarapur Transformers Limited Associate Rs. 243.97 Lakhs Loans given
Bilpower Limited Associate Rs. 0.01 Lakhs Loans given
Rajendra Kumar Choudhary Relative of Director Rs. 6.12 Lakhs Loans given
Choudhary Global Limited Associate Rs. 380.00 Lakhs Loans given
Bilpower Limited Associate Rs. 215.82 Crores Guarantee given

5. The company has not accepted any deposits from the public. No order has been passedby Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal.

6. As per information & explanation given by the management maintenance of costrecords has been prescribed by the Central Government under sub-section (1) of section 148of the Companies Act 2013 and we are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

7. a. Undisputed amounts payable in respect of Sales Tax of Rs. 22832603/- (relatingto Financial Year 2011-12- Rs. 2901565/- relating to Financial Year 2012-13 Rs.9378242/- related to Financial Year 2013-14 Rs. 6824514/- & related to FinancialYear 2014-15 Rs. 3728282/- ) Interest on Sales Tax of Rs.10755287/- (relating toFinancial Year 2010-11 Rs. 387364/- relating to Financial Year 2011-12 Rs. 1891274/-relating to Financial Year 2012-13 Rs. 4768409/- relating to Financial Year 2013-14Rs. 2677067/- & relating to Financial Year 2014-15 Rs. 1031173/-) Service Tax Rs.311523/- (relating to Financial Year 2015-16) TDS Rs. 112618/- (relating to FinancialYear 2015-16) were outstanding for a period of more than six months from the date theybecame payable. The due dates for these amounts are as per the respective statutes.

b) The disputed statutory dues aggregating to Rs. 303.07 Lakhs that have not beendeposited on account of matters pending before appropriate authorities are as under :-

Sr. No. Name of Statute Natures of Dues Period for which the amount relates Forum where dispute is pending Amount in Lacs
1 Central Excise Act Excise Duty F.Y.2010-11 2011-12 2012-13 & 2013-14 Office of Commissioner of Central Excise Thane-I 1545.11
2 Sales Tax VAT F.Y. 2010-11 Deputy/Joint Commissioner of Sales Tax (Appeal) 86.69
3 Sales Tax CST F.Y. 2010-11 2011-12 Deputy/Joint Commissioner of Sales Tax (Appeal) 216.38

8. Based on our audit procedures and according to the information and explanation givento us by the management the company has defaulted in repayment of loans and interest tobank.

The company has defaulted in repayment of dues to State Bank of India on its variousfund facilities availed outstanding at the year end amounting to Rs.79.69 Crores. Theestimated unpaid interest on the above loans amounts to Rs. 17.11 crores.

9. According to the information and explanations given to us the Company has notraised any moneys by way of initial public offer or further public offer and has not takenany term loan during the year.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor we have been informed of any such case by theManagement.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid orprovided in accordance with the requisite approval mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties areincompliance with sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired under Accounting Standard 18 "Related Party Disclosure".

14. According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xii) of the Order is not applicableto the Company.

15. In our opinion and according to the information and explanation given to us theCompany has not entered into non-cash transactions with directors or persons connectedwith him. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

16. In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

For Bansal Bansal & Co.
Chartered Accountants
FRN: 100986W
Manoj Agarwal
Place : Mumbai Partner
Date : 30th May 2016 Membership No.: 107624

Annexure B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of Bil EnergySystems Limited ('the Company') as of 31 March 2016 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the 'Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of the Management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Bansal Bansal & Co.
Chartered Accountants
Firm Regn. No. 100986W
Manoj Agarwal
Place : Mumbai Partner
Date : 30th May 2016 Membership No. 10762