Mar 31, 2015
We have audited the accompanying financial statements of GALADA POWER
AND TELECOMMUNICATION LIMITED, ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to 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 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 of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made
by the Company's Directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Basis for Qualified Opinion:
a. The Company has not provided for the liability amounting to Rs.6,077
lakhs due up to 31st March, 2014 on account of additional interest and
liquidated damages payable to the Financial Institutions for non
compliance with the terms of sanction of loans and / or repayment
schedules.
b. The Company has not provided for the liability on account of
interest on recalled bank working capital loans amounting to Rs.23,929
lakhs up to 31st March, 2014 and Rs.2,569 lakhs for the year.
Consequent to the above, the loss for the year and the liabilities as
at 31.03.2015 is understated by Rs.2,569 lakhs and Rs. 32,575 lakhs
respectively.
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, 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, of the
state of affairs of the Company as at 31st March, 2015, and its loss
and its cash flows for the year ended on that date.
Emphasis of Matter:
We draw attention to the following matters in the Notes to the
financial statements:
a. Note 1 to the financial statements regarding the preparation of the
financial statements on a going concern basis, despite substantial
erosion of the net worth, lower cash inflows from the existing business
activities and Continuous default in payment of dues to banks /
financial institutions and the legal proceedings initiated by the
Bankers of the Company for the recovery of the debts.
b. Note 30 to the financial statements on suitability of Equipment in
Transit for its intended use
c. Note 33 to the financial statements regarding the appointment and
payment of Managerial Remuneration.
d. Note 38 to the financial statements on non compliance with the
provisions of Sec-205-A (1) of the Companies Act, 1956 regarding
transfer of unpaid dividend to a special Bank Account.
Our opinion is not qualified in respect of these matters.
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.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraphabove, in our opinion, proper books of
account as required by law have been kept by the Company so far as it
appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraphabove, in our opinion, the aforesaid
financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, mayhave an adverse effect on the functioning of
the Company.
(f) 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.
(g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 48 to the
financial statements
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. According to the information and explanations given to us , there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
Annexure to the Auditor's Report:
The Annexure referred to in Para 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of our report of even date ,to
the members of GALADA POWER AND TELECOMMUNICATION LIMITED, HYDERABAD,
for the year ended March 31,2015.,
1. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. As explained to us, the management has physically verified the fixed
assets during the year and there is a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of the assets. No discrepancies were noticed on
such verification.
2. a. The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b. In our opinion, 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. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a. During the year, the Company has not granted any loans, secured
or unsecured to Companies, firms or other parties covered in the
register maintained under Section 189 of the Companies Act, 2013.
b. In view of our comment in paragraph (a) above, Clause (III) (a) and
(b) of paragraph 3 of the aforesaid order are not applicable to the
Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to 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 weaknesses in internal control
system.
5. The Company has not accepted any deposits from the public. Hence
the provisions of Sections 73 to 76 or any other relevant provisions of
the Companies Act, 2013, and the rules framed there under, do not apply
to this Company.
6. We have broadly reviewed the cost records maintained by the Company
pursuant to sub-section (1) of section 148 of the Companies Act, 2013
and are of the opinion that prime facie the prescribed accounts and
records have been made and maintained. We have however not made a
detailed examination of the cost records with a view to determine
whether they are accurate or Complete.
7. a. According to the records of the Company, the company regular in
depositing undisputed statutory dues including provident fund,
employees 'state insurance, income-tax, sales- tax, wealth tax, service
tax, duty of customs, duty of excise, value added tax , cess and any
other statutory dues with the appropriate authorities.
b. According to the records of the Company, no un disputed statutory
dues including provident fund, employees 'state insurance, income-tax,
sales-tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax , cess and any other statutory dues were in arrears as
at March 31, 2015 for a period of more than six months from the date
they became payable except the following.
Nature of Nature of Amount Period to which
Statute the Dues Rs. the amount relates
The Investor
Companies Education and 115,56,699 1996
Act, 1956 Protection Fund
IFST Loan 3,11,190 1988
APGSTAct Differed Sales 67,10,843 1996
Tax Sales tax 5,25,000 2000
9,84,920 1997 to 2011
2,07,075 2011 to 2012
2,07,075 2011 to 2012
Property Tax 2,07,075 2012 to 2012
AP
Municipalities 2,07,075 2012 to 2013
Act,1965 2,07,075 2013 to 2014
2,07,075 2013 to 2014
2,07,075 2014 to 2015
Customs Duty on 30,02,346
Act 1942 Imports
Name of Statute Due date Date of payment
The Companies Act,1956 Not yet
30.12.2003 pajd
APGST Act 25.07.1997 Not yet
01.04.2001
01.08.2001
AP Municipalities Act,1965 1997-2011
30.09.2011
31.03.2012
30.09.2012 Not yet
31.03.2013 pajd
30.09.2013
31.03.2014
30.09.2014
Customs Act,1942 Not yet paid
c. According to the records of the Company and the information and
explanations given to us, there were no dues of income tax or sales tax
or wealth tax or service tax or duty of customs or duty of excise or
value added tax or cess have not been deposited on account of any
dispute.
d. According to the information and explanations given to us , there
were no amounts which were required to be transferred to Investor
Education and Protection Fund. Therefore, the provisions of clause 3
(vii) (c ) of the Companies (Auditor's Report) Order, 2015 are not
applicable to the Company.
8. The accumulated losses of the Company as at the end of the
financial year under reference are more than fifty percent of net worth
of the Company. The Company has incurred cash losses during the year
covered by our audit and also in the immediately preceding financial
year.
9. In our opinion the company has defaulted in repayment of dues to
financial institutions, banks and debenture holders. However, the
period and amount of default is not furnished as the Company has
submitted its rehabilitation proposal to re schedule all dues payable
to the financial institutions, banks and debenture holders.
10. The Company has not given any guarantee for the loans taken by
others from banks and financial institutions.
11. During the year the Company has not obtained any term loans.
Therefore, the provisions of clause 3 (xi) of the Companies (Auditor's
Report) Order, 2015 are not applicable to the Company.
12. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
forBRAHMAYYA&CO;
Chartered Accountants
Firm's Registration Number: 000513S
(P. CHANDRAMOULI)
Place : Hyderabad Partner
Date : 30.05.2015 Membership Number: 025211
Mar 31, 2014
We have audited the accompanying financial statements of GALADA POWER
AND TELECOMMUNICATION Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, and 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 Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/ 2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act,2013. 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 Company''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.
Basis for Qualified Opinion:
a. In the absence of confirmation letters from the parties, we are
unable to ascertain whether the amounts shown under the heads Trade
receivables, Current Assets and Loans and Advances are realisable and
the payables shown under various heads of account are also subject to
confirmation by the respective institutions / parties. In the absence
of sufficient evidence, we are unable to comment on the recoverability
of these receivables and consequential effect on the financial
statements.
b. The Company has not complied with the provisions of Sec-205-A (1)
of the Companies Act, 1956 regarding transfer of unpaid dividend to a
special bank account and the interest payable for such non compliance
amounting to Rs. 235.45 lakhs up to 31st March, 2013 and Rs.13.87 lakhs
for the year is not provided in the Accounts.
c. The Company has not provided for the liability on account of
additional interest and liquidated damages payable to the Financial
Institutions and / or other financiers for non compliance with certain
terms of sanction of loans and / or repayment schedules amounting to
Rs.30,316.18 lakhs up to 31st March, 2013 and Rs.5,418.13 lakhs for the
year.
d. The Company has not provided for the liability on account of
interest on recalled bank working capital loans amounting to
Rs.20,313.31 lakhs up to 31st March, 2013 and Rs.3,616.13 lakhs for the
year.
Consequent to the above, the loss for the year and the liabilities as
at 31.03.2014 is understated by Rs.9,048.13 lakhs and Rs. 59,913.07
lakhs respectively.
Qualified Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion, the 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:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b. in the case of the Statement of Profit and Loss , of the loss 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
Emphasis of Matter:
a. Without qualifying our opinion, we draw attention to Note 1 to the
financial statements regarding the preparation of the financial
statements on a going concern basis, despite substantial erosion of the
net worth, lower cash inflows from the existing business activities and
continuous default in payment of dues to banks / financial institutions
and the legal proceedings initiated by the Bankers of the Company for
the recovery of the debts.
b. We draw attention to Note 27 to the financial statements also
regarding the appointment and payment of Managerial Remuneration. 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") 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. Except for the matters described in the Basis for Qualified
Opinion, 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, except for the matters described in the Basis for
Qualified 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, except for the matters described in the Basis for
Qualified Opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956; read with
the General Circular 15/2013 dated 13th September 2013 of the Ministry
of Corporate Affairs.
e. on the basis of written representations received from the directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 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. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441 A of the
Companies Act, 1956 nor has it issued any Rules under the said section
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure to the Auditor''s Report:
The Annexure referred to in Para 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of our report of even date ,to
the members of GALADA POWER AND TELECOMMUNICATION LIMITED, HYDERABAD,
for the year ended 31st March 2014.,
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, the management has physically verified most of
the fixed assets during the year and there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of the assets. No material
discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any substantial
part of fixed assets that would affect the going concern status of the
Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) During the year, the Company has neither granted nor taken any
loans, secured or unsecured to/from Companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d),
(e), (f) and (g) of paragraph 4 of the aforesaid order are not
applicable to the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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.
5. a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In our opinion and according to the information and 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 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public. Hence the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 are not applicable to
the Company for the time being.
7. In our opinion, the Company has an internal audit system, the scope
and coverage of which, in our opinion, needs to be enlarged so as to
make it commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the same.
9. a) According to the records, during the year, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess
and other material statutory dues applicable to it. However, the
Company is not regular in depositing the dues relating to Investor
Education and Protection Fund, Sales Tax and Property Tax
b) 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 and Cess were in arrears as at March 31,
2014 for a period of more than six months from the date they became
payable except the following
Nature of Nature of the Amount Period to
Statute Dues Rs. which the
amount
relates
The Investor 115,56,699 1996
Companies Education and
Act, 1956 Protection Fund
IFST Loan 3,11,190 1988
APGST Act Deferred Sales Tax 67,10,843 1996
Sales tax 8,25,000 2000
AP 9,84,920 1997 to 2011
Municipalities Property Tax 2,07,075 2011 to 2012
Act, 1965 2,07,075 2012 to 2012
2.07.075 2012 to 2013
2.07.075 2013 to 2014
Customs Duty on 227,50,002
Act 1942 Imports
Nature of Due date Date of
Statute payment
The 30.12.2003 Not yet
Companies paid
Act, 1956
25.07.1997 Not yet
APGST Act 01.04.2001 paid
01.08.2001
AP 1997- 2011 Not yet
Municipalities 30.09.2011 Paid
Act, 1965 30.09.2012
31.03.2013
30.09.2013
Customs Not yet
Act 1942 paid
c) According to the records of the Company and the information and
explanations given to us, there are no dues of Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have
not been deposited on account of any dispute.
10. The accumulated losses of the Company as at the end of the
financial year under reference are more than fifty percent of net worth
of the Company. The Company has incurred cash losses during the year
covered by our audit and also in the immediately preceding financial
year.
11. In our opinion the Company has defaulted in repayment of dues to
financial institutions, banks and debenture holders. However, the
period and amount of default is not furnished as the Company has
submitted its rehabilitation proposal to re-schedule all dues payable
to the financial institutions, banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
15. 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.
16. According to the information and explanations given to us, the
Company has not obtained any term loans during the year.
17. In our opinion and according to the information and explanations
given to us, the funds raised on short-term basis have not been used
for long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures,
therefore the question of creating security or charge in respect
thereof does not arise. However intrespect of the debentures issued to
Unit Trust of India in earlier years and outstanding as at this year
end, the security or charge is not yet created.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for BRAHMAYYA & CO.
Chartered Accountants
Firm''s Registration Number: 000513S
(P. CHANDRAMOULI)
Place: Hyderabad Partner
Date : May 30, 2014 Membership Number: 025211
Mar 31, 2013
Report on the Financial Statements:
We have audited the accompanying financial statements of GALADA POWER
AND TELECOMMUNICATIONS Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2013, and 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 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
agpxgoriate to provide a basis for our audit opinion.
Basis for Qualified Opinion:
a. In the absence of confirmation letters from the parties, we are
unable to ascertain whether the amounts shown under the heads Trade
receivables, Current Assets and Loans and Advances are realisable and
the payables shown under various heads of account are also subject to
confirmation by the respective institutions / parties. In the absence
of sufficient evidence, we are unable to comment on the recoverability
of these receivables and consequential effect on the financial
statements.
b. The Company has not complied with the provisions of Sec-205-A (1)
of the Companies Act, 1956 regarding transfer of unpaid dividend to a
special bank account and the interest payable for such non compliance
amounting to Rs. 221.58 lakhs up to 31st March, 2012 and Rs.13.87 lakhs
for the year is not provided in the Accounts.
c. The Company has not provided for the liability on account of
additional interest and liquidated damages payable to the Financial
Institutions and / or other financiers for non compliance with certain
terms of sanction of loans and / or repayment schedules amounting to
Rs.29,558.99 lakhs up to 31st March, 2012 and Rs.4,986.83 lakhs for the
year.
d. The Company has not provided for the liability on account of
interest on recalled bank working capital loans amounting to
Rs.17,162.06 lakhs up to 31st March, 2012 and Rs.3,151.25 lakhs for the
year.
Consequent to the above, the loss for the year and the liabilities as
at 31.03.2013 is understated by Rs.8,151.95 lakhs and Rs. 55,094.58
lakhs respectively.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion, the 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:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b. in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
yeafcgeded on that date
Emphasis of Matter:
a. Without qualifying our opinion, we draw attention to Note 1 to the
financial statements regarding the preparation of the financial
statements on a going concern basis, despite substantial erosion of the
net worth, lower cash inflows from the existing business activities and
Continuous default in payment of dues to banks / financial institutions
and the legal proceedings initiated by the Bankers of the Company for
the recovery of the debts.
b. We draw attention to Note 27 to the financial statements also
regarding the appointment and payment of Managerial Remuneration. 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") 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. Except for the matters described in the Basis for Qualified
Opinion, 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, except for the matters described in the Basis for
Qualified 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, except for the matters described in the Basis for
Qualified Opinion,
the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; /f^^Ws^s.
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441 A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure to the Auditor''s Report:
The Annexure referred to in Para 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of our report of even date ,to
the members of GALADA POWER AND TELECOMMUNICATION LIMITED, HYDERABAD,
for the year ended 31 March 2013.,
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, the management has physically verified most of
the fixed assets during the year and there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of the assets. No material
discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any substantial
part of fixed assets that would affect the going concern status of the
Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) During the year, the Company has neither granted nor taken any
loans, secured or unsecured to/from Companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d),
(e), (f) and (g) of paragraph 4 of the aforesaid order are not
applicable to the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknessesJrL|nternal
control system. /^SF^v
5. a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In our opinion and according to the information and 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 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public. Hence the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 are not applicable to
the Company for the time being.
7. In our opinion, the Company has an internal audit system, the scope
and coverage of which, in our opinion, needs to be enlarged so as to
make it commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the same.
9. According to the records, during the year, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess
and other material statutory dues applicable to it. However, the
Company is not regular in depositing the dues relating to Investor
Education and Protection Fund, Sales Tax and Property Tax, //<&^;/« >
c) According to the records of the company and the information and
explanations given to us, there are no dues of Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have
not been deposited on account of any dispute.
10. The accumulated losses of the Company as at the end of the
financial year under reference are more than fifty percent of net worth
of the Company. The Company has incurred cash losses during the year
covered by our audit and also in the immediately preceding financial
year.
11. In our opinion the company has defaulted in repayment of dues to
financial institutions, banks and debenture holders. However, the
period and amount of default is not furnished as the Company has
submitted its rehabilitation proposal to re schedule all dues payable
to the financial institutions, banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
15. 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.
16. According to the information and explanations given to us the
Company has not obtained any term loans during the year.
17. In our opinion and according to the information and explanations
given to us the funds raised on short-term basis have not been used for
long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures,
therefore the question of creating security or charge in respect
thereof does not arise. However introspect of the debentures issued to
Unit Trust of India in earlier years and outstanding as at this year
end, the security or Charge is not yet created.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for BRAHMAYYA & Co.,
Chartered Accountants
Firms'' Registration Number:
(P. CHANDR)
Place : Hyderabad Parter
Date : May 31, 2013 Membership Number: 025211
Mar 31, 2012
1. We have audited the attached Balance Sheet of GALADA POWER AND
TELECOMMUNICATION LIMITED, HYDERABAD (A P) as at 31st March, 2012 and
the Statement of Profit and Loss and also the Cash Flow Statement for
the year ended on that date annexed thereto 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 the 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 examining, 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 (as
amended} issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order
4. Without qualifying our opinion we draw attention to Note no: 1 of
the financial statements regarding the preparation of the financial
statements on a going concern basis.
5. in the absence of confirmation letters from the parties, we are
unable to ascertain whether the amounts shown under the heads Trade
receivables, Current Assets and Loans and Advances are realisable and
the payables shown under various heads of account are a/so subject to
confirmation by the respective institutions/parties
6. a} The Company has not complied with the provisions of Sec 205-A
(1) of the Companies Act, 19$$ regarding transfer of unpaid dividend to
a special bank account and the interest payable for such non compliance
amounting to Rs. 207.67 lakhs up to 31st March, 2011 and Rs. 13.91 lakhs
for the year is not provided in the Accounts.
b) The Company has not provided for the liability on account of
additional interest and liquidated damages payable to the Financial
institutions and/or other financiers for non compliance with certain
terms of sanction of loans and for repayment schedules amounting to Rs.
25,363.35 lakhs up to 31st March, 2011 and Rs. 4,195.04 lakhs for the
year,
c) The Company has not provided for the liability on account of
interest on recalled bank working capital loans amounting to Rs.
14,415.93 lakhs up to 31st March, 2011 and Rs. 2.746.13 lakhs for the
year. Consequent to The above, the loss for the year and the
liabilities as at 31.03.2012 understated by Rs. 6,955.68 lakhs and Rs.
46,942.63 lakhs respectively
7. Further to our comments in the Annexure referred to above, we report
that;
i) Except as discussed in paragraphs 4 to 6 above, we have 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, except as discussed in paragraphs 4 to 6 above.
proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books
iii) The Balance Sheet. Statement of Profit and Loss and Cash Row
statement dealt with by this report are in agreement with the books of
account.
iv) In our opinion, except as discussed in paragraphs 4 to 6 above, the
Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement
clean with by this report comply with the accounting standards referred
to in sub-section (3C) of Section 211 of the Companies Act 1956. 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 clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956,
vi) In our opinion and to the best of our information and according to
the explanations given to us, subject to our observations in paragraphs
4 1o 6 above and also Note no: 27 regarding payment of Managerial
remuneration the said accounts read in Conjunction with the other 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 statement of profit and loss,of the Loss of the
Company for the year ended on that date, and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditor's Report: referred to in paragraph 3 of our
report of even date.
Re: GALADA POWER AND TELECOMMUNICATION LIMITED. HYDERABAD
1. a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets
b) As explained to us, the management has physically verified most of
the fixed assets during the year and there is a regular programme of
verification which, in our opinion 15 reasonable having regard to the
size of the Company and the nature of the assets. No material
discrepancies were noticed on such verification
c) During the year the Company has not disposed off any substantial
part of fixed assets that would affect the going concern status of the
Company
2. a) The inventory has been physically verified during the year by the
management. In our opinion the frequency of verification is reasonable
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) During the year, the Company has neither granted nor taken any
loans, secured Or unsecured to/from Companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956
b) In view of our comment in paragraph 3(a) above (III) (b), (c), (d),
(e), (f) and (g) of paragraph 4 of the aforesaid order are not
applicable to the Company
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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
5. a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In our opinion and according to the information and 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 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public Hence the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules 1975 are not applicable to the
Company for the time being
7. In our opinion, the Company has an Internal audit system the scope
and coverage of which, in our opinion, needs to be enlarged so as to
make it commensurate with the size and nature of its business
8. We have broadly reviewed the books of account relating to materials,
labour and other items of cost maintained by the company pursuant to
the Rules made by the Central Government for the maintenance of cost
records under section 209 (1) (d) of the Companies Act. 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained However, we have not made a detailed
examination of the same
9. a) According to the records, during the year the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Provident Fund. Employees' State Insurance, income-tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. However. The Company is not
regular in depositing the dues relating 1o investor Education and
Protection Fund, Sales Tax and Property Tax,
b) 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 and Cess were in arrears as at March 31,
2012 for a period of more than six months from the date they became
payable except the following
Nature of Nature of the Amount Period to
Statute Dues Rs. which the
amount
relates
The Companies Investor Education 115,56,589 1996
Act, 1956 and Protection
Fund
APGST Act IFST Loan 3,11,190 1988
Differed Sales Tax 67,10,843 1996
Sales Tax 14,00,000 2000
AP Property Tax 9,84,920 1997 to 2011
Municipalities
Act, 1965 2,07,075 2011 to 2012
Customs Act Duty on imports 204,49,304
1942
Nature of Due date Date of Payment
Statute
The Companies 30.12.2003 Not yet paid
Act, 1956
APGST Act 25.07.1997 -
01.04.2001 -
01.08.2001 Rs. 75,000
paid up to
30.06.2012
AP 1997-2011 Not yet paid
Municipalities 30.09.2011
Act, 1965
Customs Act Not yet paid
1942
c) According to the records of the company and the information and
explanations given to us. there are no dues of Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have
not been deposited on account of any dispute.
10. The accumulated losses of the Company as at the end of the financial
year under reference are more than fifty percent of net worth of the
Company The Company has incurred cash losses during the year covered by
our audit and also in the immediately preceding financial year.
11. In our opinion the company has defaulted in repayment of dues to
financial Institutions, banks and debenture holders However the period
and amount of default is not furnished as the Company has submitted its
rehabilitation proposal to reschedule all dues payable to the financial
institutions banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore the provisions of clause 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
14. The Company is not dealing or trading in shares, securities
debentures and other investments. Therefore the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
15. 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
16 According to the information and explanations given to us the
Company has not obtained any term loans during the year
17. In our opinion and according to the information and explanations
given to us the funds raised on short-term basis have not been used for
long-term investment
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956
19. During the year the Company has not issued any debentures therefore
the question of creating security or charge in respect thereof does not
arise However introspect of the debentures issued to Unit Trust of
India in earlier years and outstanding as at this year end the security
or Charge is not yet created
20 During the year the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21 Based upon the audit procedures performed and according to the
information and explanations given to us. we report that no fraud on or
by the Company has been noticed or reported during the year
for BRAHMAYYA & Co.
Chartered Accountants
Firms' Registration Number 000513S
(P. CHANDRAMOULI)
Partner
Membership Number 025211
Place : Hyderabad
Date: June 30, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of GALADA POWER AND
TELECOMMUNICATION LIMITED, HYDERABAD (AP) as at31stMarch,2010andthe
Profit and Loss Account and also the Cash Flow Statement for the year
ended on that date annexed thereto. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the 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 examining, 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 (as
amended), issued by the Central Government of I ndia in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion we draw attention to Note no: 3 of
Schedule 20 to the financial statements regarding the preparation of
the financial statements on a going concern basis.
5. In the absence of confirmation letters from the parties, we are
unable to ascertain whether the amounts shown under the heads Sundry
Debtors, Other Current Assets and Loans and Advances are realisable and
the payables shown under various heads of account are also subject to
confirmation by the respective institutions / parties.
6. a) The Company has not complied with the provisions of Sec-205-A
(1) of the Companies Act, 1956 regarding transfer of unpaid dividend to
a special bank account and the interest payable for such noncompliance
amounting to Rs. 179.93 lakhs upto 31st March, 2009 and Rs. 13.87
lakhs for the year is not provided in the Accounts.
b) The Company has not provided for the liability on account of
additional interest and liquidated damages payable to the Financial
Institutions and / or other financiers for non compliance with certain
terms of sanction of loans and / or repayment schedules amounting to
Rs. 17,793.27 lakhs upto 31st March, 2009 and Rs.3,624.83 lakhs for the
year.
c) The Company has not provided for the liability on account of
interest on recalled bank working capital loans amounting to
Rs.9,937.39 lakhs upto 31st March, 2009 and Rs.2,085.44 lakhs for the
year.
Consequent to the above, the loss for the year and the liabilities as
at 31.03.2010 is understated by Rs.5,724.14 lakhs and Rs. 33,634.73
lakhs respectively.
7. Further to our comments in the Annexure referred to above, we
report that:
i) We have 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 appears from our examination of
those books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit and Loss account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
v) On the basis of written representations received from the Directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that, none of the Directors is disqualified as on 31st March,
2010 from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with the Schedules annexed therewith and subject to our comments in
para 5 and 6 above and also note no : 20 of Schedule 20 regarding
payment of Managerial remuneration the said accounts 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, 2010;
b) in the case of the profit and loss account, of the Loss of the
Company for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors Report: referred to in paragraph 3 of our
report of even date, Re: GALADA POWER AND TELECOMMUNICATION LIMITED,
HYDERABAD.
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, the management has physically verified most of
the fixed assets during the year and there is a regular programme of
verification which,in our opinion, is reasonable having regard to the
size of the Company and the nature of the assets. No material
discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any substantial
part of fixed assets that would affect the going concern status of the
Company.
2. a) The inventory has been physically verified during the year by
the management.
In our opinion, the frequency of verification is reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) During the year, the Company has neither granted nor taken any
loans, secured
or unsecured to/from Companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d),
(e), (f) and (g) of paragraph 4 of the aforesaid order are not
applicable to the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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.
5. a) In our opinion and according to the information and explanations
given to us,
we are of fhe opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 have been entered
in the register to be maintained under that section
b) In our opinion and according to the information and 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 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public. Hence the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 are not applicable to
the Company for the time being.
7. In our opinion, the Company has an internal audit system, the scope
and coverage of which, in our opinion, needs to be enlarged so as to
make it commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the maintenance
of cost records under section 209 (1) (d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of the same.
9. a) According to the records, during the year, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees State Insurance,
Income-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other material statutory dues applicable to it. However, the Company is not
regular in depositing the dues relating to Investor Education and
Protection Fund, Sales Tax and Property Tax,
b) 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 and Cess were in arrears as at March
31,2010 for a period of more than six months from the date they became
payable except the following.
Period
Nature of Nature of Amount to Due date Date of
Statute the Dues Rs. which payment
the
amount
relates
The Compan
ies Investor 115,56,699 1996 30.12.2003 Not
Act, 1956 Education yet paid
and
Protection
Fund
APGST Act IFSTLoan 3,11,190 1988 25.07.1997
Differed
Sales Tax 45,00,000 1996 01.04.2001
Salestax 19,75,000 2000 01.08.2001 Rs.25,000
paid up to
26.06.10
APMunicipal
ities Property
Tax 7,47,440 1997 to 1997 to Not
Act, 1965 2010 2010 yet paid
Income tax Tax Deduc
ted 17,14,887 Upto - Not
Act, 1961 at Source 2009 yet paid
Customer Act Duty on 181,48,606 Not
1942 Imports yet paid
c) According to the records of the company and the information and
explanations given to us, there are no dues of Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have
not been deposited on account of any dispute.
10. The accumulated losses of the Company as at the end of the
financial year under reference are more than fifty percent of net worth
of the Company. The Company has incurred cash losses during the year
covered by our audit and also in the immediately preceding financial
year.
11. In our opinion the company has defaulted in repayment of dues to
financial institutions, banks and debenture holders. However, the
period and amount of default is not furnished as the Company has
submitted its rehabilitation proposal to re schedule all dues payable
to the financial institutions, banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
15. 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.
16. According to the information and explanations given to us the
Company has not obtained any term loans during the year.
17. In our opinion and according to the information and explanations
given to us the funds raised on short-term basis have not been used for
long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures,
therefore the question of creating security or charge in respect
thereof does not arise. However introspect of the debetures issued to
Unit Trust of India in earlier years and outstanding as at this year
end, the security or Charge is not yet created.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for BRAHMAYYA&CO.
Chartered Accountants
Firms Registration Number: 000513S
(P.CHANDRAMOULI)
Place: Hyderabad Partner
Date : 26,th June, 2010 Membership Number: 025211