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Auditor Report of RTS Power Corporation Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of RTS Power Corporation Limited ('the Company') which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

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 Companies Act, 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 standalone 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 standalone 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

i. 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.

ii. 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.

iii. The Balance Sheet, the Statement of Profit and Loss and the Cash flow Statement dealt with this Report are in agreement with the books of account.

iv. 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.

v. On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

vi. 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 standalone financial statements as referred to in Note No. 32 to the standalone financial statements.

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

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

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF RTS POWER CORPORATION LTD. REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE.

i. a. The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

b. These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

ii. a. The inventories 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 explanation 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. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records were not material and have been properly dealt with in the books of accounts.

iii. The Company has not granted any loan secured or unsecured to any firm, Companies or parties covered in the register maintained under Section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

v. On the basis of our examination of books and records of the Company, in our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and therefore the directives issued by the Reserve bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. a. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other statutory dues applicable to it. There are no undisputed amount payable in respect of Income tax and other applicable Statutory dues which were in arrears as at 31.03.2015 for a period of more than six months from the date they became payable except as under:

Name of the Statute Nature of Amount (Rs.) Financial Year to Dues which the amount relates

Rajasthan Tax on Entry of Entry Tax 73,76,615/- 2012-2015 Goods in Local Area Act, 1999

b. According to the information & explanation give to us, there are no dues of Income tax and other applicable Statutory Dues which have not been deposited on account of any dispute except as under:

Name of the Statute Nature of Dues Amount (Rs.) Period

Rajasthan Tax on Entry Tax 2,09,184/- 2009-10 Entry of Goods in 4,44,532/- 2010-11 Local Area Act, 1999 4,41,408/- 2011-12

Rajasthan Tax on Entry Tax 2,14,420/- 2003-04 Entry of Goods in 72,167/- 2005-06 Local Area Act, 1999 2,41,894/- 2009-10 9,78,298/- 2010-11 10,18,427/- 2011-12

Rajasthan VAT VAT, Interest, 1,499,495/- F.Y. 2007-2008 Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 20,84,185/- F.Y. 2008-2009 Penalty on Freight and insurance recoered

Rajasthan VAT VAT, Interest, 19,44,064/- F.Y. 2009-2010 Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 2,412,822/- F.Y. 2010-2011 Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 4,972,531/- F.Y. 2011-2012 Penalty on Freight and insurance recovered

West Bengal VAT VAT 6,32,269/- 2008-09

West Bengal VAT VAT 40,46,172/- 2009-10

West Bengal VAT VAT 2,04,21,568/- 2010-11

West Bengal VAT VAT 7,91,326/- 2011-12

Name of the Statute Forum where dispute is pending

Rajasthan Tax on Entry of Goods Appeal and Stay from Supreme Court in Local Area Act, 1999 of India

Rajasthan Tax on Entry of Goods Appeal and Stay from Supreme Court in Local Area Act, 1999 of India

Rajasthan VAT Deputy Commissioner (Appeals) Jaipur

Rajasthan VAT Deputy Commissioner (Appeals) Jaipur

Rajasthan VAT Deputy Commissioner (Appeals) Jaipur

Rajasthan VAT Deputy Commissioner (Appeals) Jaipur

Rajasthan VAT Deputy Commissioner (Appeals) Jaipur

West Bengal VAT Appellate & Revision Board of Sales Tax

West Bengal VAT Appellate & Revision Board of Sales Tax

West Bengal VAT Joint Commissioner of Sales Tax

West Bengal VAT Joint Commissioner of Sales Tax

Name of the Statute Nature of Dues Amount (Rs.) Period

Central Sales Tax CST 10,89,625/- 2008-09

Central Sales Tax CST 5,11,027/- 2009-10

Central Sales Tax CST 18,96,071/- 2010-11

Central Sales Tax CST 15,00,753/- 2011-12

Name of the Statute Forum where dispute is pending

Central Sales Tax Appellate & Revision Board of Sales Tax

Central Sales Tax Appellate & Revision Board of Sales Tax

Central Sales Tax Joint Commissioner of Sales Tax

Central Sales Tax Joint Commissioner of Sales Tax

c. According to the information & explanation give to us, the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules there under has been transferred to such fund within time.

viii. The Company does not have any accumulated losses at the end of the financial year. It has not incurred cash losses during the financial year and in the immediately preceeding the financial year.

ix. Based on our audit procedures and as per the information & explanation given by the management, the Company has not defaulted in repayment of dues to financial Institution or Banks. The Company has not issued any debentures.

x. The Company has not given any guarantee for loan taken by others from banks and financial institution.

xi. In our opinion and according to the information and explanation given to us the term loan has been applied for the purpose for which it was obtained.

xii. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

For A.C. Bhuteria & Co. Chartered Accountants Firm Regn. No. 303105E

Rahul Sethia Place: Kolkata Partner Dated : 30th May, 2015 Membership No.: 303931




Mar 31, 2014

We have audited the accompanying financial statements of RTS Power Corporation Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant 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 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 Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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 conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued

by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give

in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge 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 the Company so far as 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. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable.

e. On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. The report on the accounts of the branch offices audited under section 228 by a person other than the company''s auditor has been forwarded to us as required by clause © of sub-section

(3) of section 228 and have been dealt with in preparing our report in the manner considered necessary by us.

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

(i) a. The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets on the basis of available information.

b. Fixed Assets have been physically verified by the management during the year. In our opinion, the procedures of physical verification of fixed assets followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. No material discrepancies were noticed on verification of the assets that are physically verified.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) a. The inventories 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 explanation 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. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records were not material have been properly dealt with in the books of accounts.

(iii) a. As informed, the Company has not granted any loan, secured or unsecured, to any firm, company or parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

b. The Company has taken unsecured loan from thirteen companies and three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 19,93,54,075/- and year-end balance of loan taken was Rs. 15,59,64,125/- (including interest).

c. In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions on which loans have been taken from companies and parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company.

d. The Company has paid the principal and interest as per stipulations, wherever made.

e. There is no overdue amount of loan taken from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business for purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) a. According to the information and explanations given to us, we are of the opinion that the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties.

(vi) On the basis of our examination of the books and records of the Company, in our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year and therefore, the provisions contained in Section 58A, 58AA or any other relevant provisions of the Act and Rules framed there under are not applicable to the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the nature and size of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

b. The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statute Nature of Dues Amount (Rs) Period

Rajasthan Tax on Entry Tax 1,134,451/- For Various Years Entry of Goods in Local Area Act, 1999

Rajasthan Tax on Entry Tax 605,643/- F.Y. 2012-2013 Entry of Goods in Local Area Act, 1999

Rajasthan Tax on Entry Tax 2,238,619/- For Various Years Entry of Goods in Local Area Act, 1999

Rajasthan Tax on Entry Tax 1,105,952/- F.Y. 2012-2013 Entry of Goods in Local Area Act, 1999

Rajasthan Tax on Entry Tax 20,54,081/- F.Y. 2013-2014 Entry of Goods in Local Area Act, 1999

Rajasthan Tax on Entry Tax 14,11,850/- F.Y. 2013-2014 Entry of Goods in Local Area Act, 1999

Income Tax Act, 1961 Income Tax 2,057,170/- A.Y. 2009-2010

Income Tax Act, 1961 Income Tax 3,73,269/- A.Y. 2008-2009

Rajasthan VAT VAT, Interest, 1,499,495/- F.Y. 2007-2008 Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 2,412,822/- F.Y. 2010-2011 Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 4,972,531/- F.Y. 2011-2012 Penalty on Freight and insurance recovered

UPST Penalty on 51,33,120/- F.Y. 2013-2014 Differences of UPST demand

West Bengal VAT VAT 2,51,00,009/- For Various Years

Central Sales Tax CST 34,96,723/- For Various Years





Name of the Statute Forum where dispute is pending

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Hon''ble Rajasthan High Court Goods in Local Area Act, 1999

Income Tax Act, 1961 Before Commissioner of Income Tax (Appeals

Income Tax Act, 1961 Before Commissioner of Income Tax (Appeals

Rajasthan VAT Deputy Commissioned (Appeals) Jaipur

Rajasthan VAT Deputy Commissioned (Appeals) Jaipur

Rajasthan VAT Deputy Commissioned (Appeals) Jaipur

UPST Commissioner (Appeal) Agra

West Bengal VAT C.T.O N.S. Charge

Central Sales Tax C.T.O N.S. Charge

(x) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash loss during the current financial year but has incurred cash losses in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to banks or financial institutions. The Company has no debenture holders.

(xii) As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund nidhi/mutual benefit fund/societies.

(xiv) Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause 4 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions during the period covered by the report and accordingly Clause 4 (xv) of the Order is not applicable

(xvi) Terms loans obtained by the Company were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) During the period covered by our audit report, the Company has not issued any debentures.

(xx) The Company has not raised any money from public issue during the year.

(xxi) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

For A. C. Bhuteria & Co. Chartered Accountants Firm Registration No: 303105E Mohit Bhuteria Partner Membership No. 056832

Place : 2, India Exchange Place Kolkata - 700 001

Dated : 30th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of RTS Power Corporation Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant 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 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 Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control 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 conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013; (ii) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Other Matter Paragraph

We state that Assets and Liabilities both amounting to Rs.113,45,68,880/- each and Profit Before Tax amounting to Rs. 80,17,444/- have not been audited by us and have been relied upon the report of the branch auditor. However, remarks of the branch auditor, if any, have been duly considered in our report. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge 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 the Company so far as 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. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

e. On the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Annexure to Independent Auditor’s Report

Referred to in Paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date.

(i) a. The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets on the basis of available information.

b. Fixed Assets have been physically verified by the management during the year. In our opinion, the procedures of physical verification of fixed assets followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. No material discrepancies were noticed on verification of the assets that are physically verified.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) a. The inventories 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 explanation 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. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records were not material have been properly dealt with in the books of accounts.

(iii) a. As informed, the Company has not granted any loan, secured or unsecured, to any firm, company or parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

b. The Company has taken unsecured loan from eleven companies and three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 183,596,673/- and year-end balance of loan taken was Rs.167,569,096/- (including interest).

c. In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions on which loans have been taken from companies and parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company.

d. The Company has paid the principal and interest as per stipulations, wherever made.

e. There is no overdue amount of loan taken from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business for purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) a. According to the information and explanations given to us, we are of the opinion that the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties.

(vi) On the basis of our examination of the books and records of the Company, in our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year and therefore, the provisions contained in Section 58A, 58AA or any other relevant provisions of the Act and Rules framed there under are not applicable to the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the nature and size of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

b. The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under :

Name of the Statute Nature of Dues Amount (Rs.)

Rajasthan Tax on Entry of Entry Tax 1,134,451/- Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Entry Tax 605,643/- Goods in Local Area Act, 1999

Rajasthan Tax on Entry of Entry Tax 2,238,619/- Goods in Local Area Act, 1999

Rajasthan Ta x on Entry of Entry Tax 1,105,952/- Goods in Local Area Act, 1999

Income Tax Act, 1961 Income Tax 2,057,170/-

Income Tax Act, 1961 Income Tax 22,104/-

Uttar Pradesh Sales Tax Penalty on 5,133,120/- difference of UPST demand

Rajasthan VAT VAT, Interest, 1,409,039/- Penalty on Freight and insurance recovered



Name of the Statute Forum where dispute Period is pending

Rajasthan Tax on Entry of Goods in local Area Act, 1999 For Previous Years Hon’ble Rajasthan High Court

Rajasthan Tax on Entry of Goods in Local Area Act, 1999 F.Y. 2012-2013 Hon’ble Rajasthan High Court

Rajasthan Tax on Entry of Goods in Local Area Act, 1999 For Previous Years Hon’ble Rajasthan High Court

Rajasthan Tax on Entry of Goods in Local Area Act, 1999 F.Y. 2012-2013 Hon’ble Rajasthan High Court

Income Tax Act, 1961 A.Y. 2009-2010 Before Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 A.Y. 2008-2009 Before Commissioner of Income Tax (Appeals)

Uttar Pradesh Sales Tax F.Y. 2012-2013 Commissioner (Appeals) Agra

Rajasthan VAT F.Y. 2007-2008 Deputy Commissioner (Appeals) Jaipur



Name of the Statute Nature of Dues Amount (Rs.)

Rajasthan VAT VAT, Interest, 2,412,822/- Penalty on Freight and insurance recovered

Rajasthan VAT VAT, Interest, 4,972,531/- Penalty on Freight and insurance recovered

Name of the Statute Forum where dispute Period is pending Rajasthan VAT F.Y. 2010-2011 Deputy Commissioner (Appeals) Jaipur

Rajasthan VAT F.Y. 2011-2012 Deputy Commissioner (Appeals) Jaipur

(x) The Company does not have any accumulated losses at the end of the financial year. The Company has incurred cash loss during the financial year covered by the audit but has not incurred cash loss during the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to banks or financial institutions. The Company has no debenture holders.

(xii) As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund nidhi/mutual benefit fund/societies.

(xiv) Since the Company is not dealing or trading in shares, securities, debentures and other investment, Clause 4 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions during the period covered by the report and accordingly Clause 4 (xv) of the Order is not applicable

(xvi) Terms loans obtained by the Company were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) During the period covered by our audit report, the Company has not issued any debentures.

(xx) The Company has not raised any money from public issue during the year.

(xxi) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.



For A. C. BHUTERIA & CO.

Chartered Accountants

Firm Registration No: 303105E

Place: 2, India Exchange Place, Mohit Bhuteria

Kolkata – 700 001 Partner

Dated :30th May, 2013 Membership No. 056832


Mar 31, 2012

1) We have audited the attached Balance Sheet of RTS POWER CORPORATION LIMITED ("the Company") as at 31st March, 2012 and also the annexed Profit & Loss Statement and Cash Flow Statement for the year ended on that date annexed hereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examination, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Sub Section (4a) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order as far as applicable:

4) Further to above -

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the books.

iii) The Branch Auditor's Report of branches not visited by us, have been properly dealt with in preparing our report.

iv) The Balance Sheet, the Profit & Loss Statement and Cash Flow Statement dealt with by the report are in agreement with the books of accounts of the Company.

v) In our opinion, the Profit and Loss Statement, Balance Sheet and Cash Flow Statement comply with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

vi) On the basis of written representations received from the Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies & notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with 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 31st March, 2012

b) In the case of the Profit & Loss Statement, of the Profit for the year ended on that date AND

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date

ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN OUR REPORT OF EVEN DATE

i) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. The management has physically verified fixed assets during the year- end and no discrepancy was noticed on such verification. In our opinion, the frequency of verification is reasonable. There was no substantial disposal of fixed assets during the year.

ii) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to books records, which were not material, have been properly dealt with in the books of accounts.

iii) a) As informed , the Company has not granted any loan, secured or unsecured, to companies, firms

or parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Order are not applicable

b) The Company has taken unsecured loan from a party and fifteen companies covered in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 1748.93 lacs & the year-end balance of such loan taken was Rs. 1277.49 lacs.

c) In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions on which loan has been taken from companies and a party listed in register maintained under Section 301 of the Companies Act 1956 are not prima facie prejudicial to the interest of the Company.

d) The Company is regular in repayment of principal as per stipulations, wherever made and is regular in payment of Interest.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v) a) In our opinion and according to the information and explanations given to us, the particulars of

contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been duly entered in the register required to be maintained under the Section.

b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in cases where comparison could not be made in absence of similar transactions with other parties.

vi) In our opinion & according to the information and explanations given to us, the Company has not accepted any deposit from public during the year and therefore, the provisions contained in Section 58A, 58AA or any other relevant provisions of the Act and Rules framed thereunder are not applicable to the Company.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) According to the information given to us, the Central Government has prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for products of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the

opinion, that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the same to determine whether they are accurate and complete.

ix) a) The Company is regular in depositing with appropriate authorities undisputed statutory dues

including provident fund, employees state insurance, income tax, sales tax, customs duty, service tax, cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax or cess were in arrears, as at the close of the year for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty, service tax and cess, which have not been deposited on account of any dispute except the following :

Name of Nature of Amount Period From where Statute Due (Rs.) dispute is pending

Rajasthan Tax Entry Tax 11,34,451/- For Previous Hon'ble on Entry of Years Rajasthan High Goods in Court Stayed Local Area 50% hence Act, 1999 50% deposited during the year.

Rajasthan Tax Entry Tax 22,38,619/- For Previous H'ble Rajasthan on Entry of Years High Court Goods in Judgement for Local Area 50% deposit Act, 1999

Income Tax Income Tax 20,57,170/- A.Y. 2009-2010 Before Act, 1961 Commissioner of Income Tax (Appeals)

Income Tax Income Tax 22,104/- A.Y. 2008-2009 Before Act, 1961 Commissioner of Income Tax (Appeals)

x) The Company does not have any accumulated losses. The Company has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

xi) As per the information and explanations furnished to us and our verification of records of the Company, the Company has made delays in repayment of dues to banks. The period and amount of delay are as follows :

Nature of dues Period of Delay Amount (Rs.)

Interest 30 to 90 Days 510,797

Interest 90 to 180 Days 149,512

The Company has no dues to financial institutions. The Company has no debenture holders.

xii) As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund/nidhi/mutual benefit fund/society.

xiv) The Company does not have any dealing or trading in shares, securities, debentures or other investments, and accordingly Clause (xiv) of Para 4 of the Order is not applicable.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) Term loans obtained by the Company were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

xviii) The Company has made preferential allotment of 3,80,000 Equity Shares of Rs 10/- each at a premium of Rs. 26 per share to a company covered in the Register maintained under Section 301 of the Companies Act, 1956.The Equity Shares have been issued based on the price determined as per SEBI Guidelines and are therefore not prejudicial to the interest of the Company..

xix) The Company has not issued any debenture during the year.

xx) The Company has disclosed the end use of money raised by issue of Equity Shares on Preferential basis and the same has been verified by us. (Refer Note No. 33)

xxi) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor we have been informed of any such case by the management.

For A. C. Bhuteria & Co. Chartered Accountants Firm Registration No. 303105E

2, India Exchange

Place Mohit Bhuteria

Kolkata - 700 001 Partner

Dated : 29th August, 2012 Membership No. 56832

 
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