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Surya Chakra Power Corporation Ltd.

BSE: 532874 Sector: Infrastructure
NSE: N.A. ISIN Code: INE274I01016
BSE LIVE 15:16 | 22 Sep 0.87 -0.04
(-4.40%)
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 0.95
PREVIOUS CLOSE 0.91
VOLUME 105173
52-Week high 3.88
52-Week low 0.87
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.87
Sell Qty 5832.00
OPEN 0.95
CLOSE 0.91
VOLUME 105173
52-Week high 3.88
52-Week low 0.87
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.87
Sell Qty 5832.00

Surya Chakra Power Corporation Ltd. (SURYACHAKPOW) - Auditors Report

Company auditors report

To The Members of

Suryachakra Power Corporation Limited

Report on Standalone Financial Statements

We have audited the accompanying Standalone financial statements of SuryachakraPower Corporation Limited ("the Company") which comprises the StandaloneBalance Sheet as at March 31 2016 the Statement of Standalone Profit and Loss andStandalone Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134 (5) of the Companies Act 2013 ("the Act") with respect to the preparationof these Standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting the fraud and other irregularities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and the matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and other operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by the Company’s Directorsas well 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 on the financial statements.

Basis for Qualified Opinion

Attention is invited to:

(a) Note - 33 to the financial statements regarding recognition of rejections /withheld amount by Andaman and Nicobar Administration (A&NA) - We are unable tocomment on the extent of ultimate recoverability of Rs.60093376 (Previous year:Rs.49344300) withheld by A & NA during the year ended March 31 2016 and totalreceivables as at March 31 2016 - Rs. 142601061 (as at March 31 2015 - Rs.230507685) which are subject to confirmation by the A&NA. Further the company inearlier years has also recognized interest aggregating to Rs. 127574329 on suchrejections / withheld amount which is also subject to confirmation by the A&NA.

b) Note - 34(b) to the financial statements regarding its investment in SuryachakraEnergy (Chhattisgarh) Private Limited a wholly owned subsidiary of the Company - Rs.365100725 (Previous year: Rs.364800725). Completion and implementation of the powerproject of Suryachakra Energy (Chhattisgarh) Private Limited depends on the ability of themanagement to infuse the requisite funds. Hence we are unable to comment on therecoverability of the carrying amounts of the said investment.

c) Note - 34(c) to the financial statements regarding advances to Suryachakra GlobalVentures Limited (SGVL) a wholly owned subsidiary of the Company incorporated in HongKong Rs. 705996278 (Previous Year - Rs. 705996278) which in turn has advanced thesaid amount to M/s Symphony Trading and Investment Limited(STIL) Hong Kong for acquiringcoal mines for the company/SGVL during the quarter ended June 2011. In the absence ofinformation regarding financial worthiness of STIL/securities in favour of the company weare unable to comment on the extent of recoverability of the advance.

d) Note - 35 to the financial statements regarding advances to Suryachakra ThermalEnergy (Andhra) Private Limited Rs. 28879652 (Previous Year - Rs.30661484) andSuryachakra Thermal Energy (Madhya Pradesh) Private Limited Rs.38101314 (Previous Year- Rs.38101314) which are considered good and fully recoverable for the reasons statedtherein. We are unable to comment on the extent of the ultimate recoverability.

e) Note - 36 to the financial statements regarding capital advances Rs. 88428238(Previous year: Rs. 103659272/-) considered good and fully recoverable for the reasonsstated therein. We are unable to comment on the extent of ultimate recoverability.

f) Note - 37 (a) to the financial statements regarding non-provision of interest onloans from certain lenders on account of legal cases filed by them for recovery of theirdues. We are unable to comment on the extent of interest expense and loss for the yearended March 31 2016 and the cumulative liability and cumulative reserves and surplus upto March 31 2016.

g) Note - 38 to the financial statements regarding the non-availability of confirmationof balances for secured and unsecured loans / borrowings availed by the Company tradepayables creditors for capital goods and loans and advances granted by the Company.

In the absence of confirmation of balances we are unable to comment on the impact ofadverse variances if any as at March 31 2016.

The consequential impact of the above matters on the loss for the year and the retainedearnings as at March 31 2016 is indeterminable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph above the aforesaid Standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2016 and its loss and its cash flows for the yearended on that date.

Emphasis of Matter

Without qualifying our opinion we draw attention to:

i) Note 34 (a) of the financial statements regarding disinvestment of stake insubsidiary Suryachakra Global Enviro Power Limited.

ii) Note 37 (b) of the financial statements regarding writing back of the unpaidinterest aggregating to Rs. 135951879 recognized prior to financial year 2012-13.

iii) Note 39 of the financial statements regarding winding up petition u/s 433 (1) (e)of the Companies Act 1956 before the Honourable High Court of Andhra Pradesh.

Our opinion is not modified in the regard.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the ‘Annexure A’ a statement on the mattersspecified in paragraphs 3 and 4 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 bestof our knowledge and belief were necessary for the purpose of our audit;

b. Except for the effects of the matters described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby 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 Statementdealt 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 QualifiedOpinion paragraph above in our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014; e. The matters described in the Basis forQualified Opinion paragraph above and matters described in the Emphasis of Mattersparagraph above in our opinion may have an adverse effect on the functioning of theCompany.

f. 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 Section 164 (2) ofthe Act.

g. 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

h. 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 ouropinion 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 financialposition in its financial statements - Refer Note 33 37 & 39 to the financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT (REFERRED TO IN PARAGRAPH 1 UNDER‘REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS’ SECTION OF OUR REPORT OFEVEN DATE TO THE MEMBERS OF SURYACHAKRA POWER CORPORATION LIMITED

(i) 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) According to the information and explanations given to us the fixed assets havebeen physically verified during the year by the Management in accordance with a programmeof verification which in our opinion provides for physical verification of all thefixed assets at reasonable intervals having regard to the size of the Company and thenature of their assets the discrepancies noticed on such verification were not materialand have been properly dealt with in the books of account.

(ii) In respect of its inventories:

a) The inventories consisting of raw materials stores spares and consumables havebeen physically verified during the year by the management. In our opinion the frequencyof verification is reasonable.

b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

c) In our opinion and according to the information and explanation given to us and onthe basis of our examinations of the inventory records the Company is maintaining properrecords. The discrepancies noticed on physical verification of inventory as compared tobook records were not material to the operations of the Company and the same have beenproperly dealt with in the books of account

(iii) According to the information and explanations given to us the Company hasgranted secured and unsecured loans and advances to companies covered in the registermaintained under section 189 of the Act.

a) According to the information and explanations given to us the terms of thearrangement 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 theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant to the rules made by the CentralGovernment for the maintenance of cost records prescribed under Section 148(1) of the Actand we are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we are not required to and have not carried out a detailedaudit of the same.

(vii)According to the information and explanations given to us and according to thebooks and records as produced and examined by us in accordance with the generally acceptedauditing practices in India in respect of statutory dues:

(a) The Company is not regular in depositing undisputed statutory dues includingProvident Fund Income Tax Sales Tax Service tax and material statutory dues applicableto it with the appropriate authorities. According to the information and explanationsgiven to us the provisions of employee’s state insurance wealth tax custom dutyexcise duty and cess are not applicable to the Company at present. The followingundisputed amounts were in arrears as at March 31 2016 for a period of more than sixmonths from the date they became payable.

Particulars Amount in Rs.
Tax Deduction at Source 3523124
Service Tax 887703
Provident Fund 142825
VAT 546250

(b) According to the information and explanation given to us there are no dues ofIncome Tax Sales Tax Service Tax Customs Duty Excise Duty or Value Added Tax whichhave not been deposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has defaulted in repayment of dues to banks. The period and the amount ofdefault have been set out in the Appendix to this report.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) During the course of our examination of the books and other records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year nor have we been informed of such case by the management.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company managerial remuneration has been paid /provided during the year in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Companies Act 2013.

(xii) According to the information and explanations given to us and based on ourexamination of the records the Company is not a nidhi company. Accordingly paragraph3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraphs 3(xiv) of the Order are not applicable

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him during the year.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

ANNEXURE B TO THE INDEPENDENT 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 SuryachakraPower Corporation Limited ("the Company") as of March 31 2016 inconjunction with our audit of the financial statements of the Company for the year endedon 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’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material 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.

Disclaimer of Opinion

According to the information and explanations given to us the company has notdocumented its system of internal financial control over financial reporting on thecriteria based on the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.Therefore we are unable to obtain sufficient appropriate audit evidence to express anopinion on the adequacy and operating effectiveness of internal financial controls overfinancial reporting. We have considered the disclaimer stated above in determining thenature timing and extent of audit tests applied in our audit of the financial statementsof the Company and the disclaimer does not affect our opinion on the financial statementsof the Company

for M. Bhaskara Rao & Co.
Chartered Accountants
Firm Registration No. 000459S
V K Muralidhar
Partner
Hyderabad May 28 2016 Membership No.201570