| 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 |