To the Members of Bil Power Limited.
Report on the Financial Statements
We have audited the accompanying financial statements of Bilpower Limited ("theCompany") which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant 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 atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Principles generally accepted in India includingAccounting Standards referred to in Section 133 of the Companies Act 2013 read with Rule7 of the Company (Accounts) Rules 2014. This responsibility includes the designimplementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatements.
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 the preparation of financial statements on going concern
The financial statements of the company have been prepared on a going concern basisnotwithstanding the fact that its net worth is fully eroded due to high losses for thefinancial years 2011-2012 2012-2013 20132014 2014-2015 2015-2016 and also for the yearended 31st March 2017 . The appropriateness of the said basis is interalia dependent onthe company's ability to infuse requisite funds for meeting its obligations reschedulingof debt and resuming normal operations.
b) With regard to pending confirmation of balances
The company has sent letters to customers in respect of trade receivables forconfirming balances outstanding as at March 31 2017 but in most of the cases thecustomers have not sent written confirmation confirming the balance outstanding as atMarch 31 2017. In the absence of confirmation any provision to be made for adversevariation in the carrying amounts of trade receivables is not quantified.
c) Regarding non provision of demand of Rs. 89.84 Crores received from State Bank ofIndia in respect of Corporate Guarantee given by the company in respect of Loan Facilitiesavailed by Bil Energy Systems Limited
The lender Bank of Bil Energy Systems Limited has pursuant to certain corporateguarantees given by the company demanded from the company their dues from Bil EnergySystems Limited amounting to Rs. 89.84 crores. No provision has been made in the accountsfor the probable loss that may arise on account of above demand of Rs. 89.84 crores.
d) Regarding non provision of Interest from financial year 2013-14 on various loansavailed from State Bank of India
The company has not provided for interest payable to State Bank of India amounting toRs 3373.71 Lakhs (on various loans from State Bank of India) for the financial year2016-17. The company has also not made any provision for penal interest claimed by thebank. As a result the loss for the year ended 31st March 2017 is understated by Rs.3373.71 Lakhs. Also from the Financial Year 2013-14 to 2015-16 the company has notprovided for interest payable to State Bank of India accumulating to Rs 7993.46 and as aresult the accumulated losses as on 31PstP March 2017 are understated by Rs.11367.17 Lakhs and also current liabilities are understated by Rs. 11367.17 Lakhs. Theamount of penal interest cannot be quantified as the details have not been received fromthe bank.
e) Regarding interest free loan given by the company.
Loan and advances given includes 6 parties to whom interest free unsecured loans givenof Rs. 909.72 Lakhs.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion Paragraph the aforesaid financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2017;
b) in the case of the Statement of Profit and Loss of the Profit for the year ended onthat date; and
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 matter decided in the Basis for Qualified OpinionParagraph In our opinion the Balance Sheet the Statement of Profit and Loss and theCash Flow Statement comply with the Accounting Standards referred to in Section 133 of theCompanies Act 2013 With Rule 7 of Companies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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. Unclaimed dividends for the year 2008-09 are pending to be transferred to theInvestor Education and Protection Fund by the Investor Company as at March 31 2017.
3. The Company has provided requisite disclosures in its standalone financial statementas to holdings as well as dealings in Specified Bank Notes during the Period from 8PthPNovember 2016 to 30PthP December 2016 and these are in accordance with thebooks of accounts maintained by the Company - Refer Note 48 to the Standalone financialstatements
| ||For Bansal Bansal & Co. |
| ||Chartered Accountants |
| ||FRN: 100986W |
| ||Manoj Agrawal |
|Place : Mumbai ||Partner |
|Date : 30PthP May 2017 ||Membership No.:107624 |