| We have audited the accompanying consolidated financial statements of
Entegra Limited (the "Company") and its subsidiaries (collectively
referred to as "the Group"), which comprise the Consolidated Balance
Sheet as at March 31, 2015, the Consolidated Statement of Profit and
Loss and the Consolidated Cash Flow Statement for the year then ended
and a summary of significant accounting policies and other explanatory
information.
II. Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters 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 Standards referred to in
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014 and in accordance with the accounting principles generally
accepted in India. This responsibility also includes the maintenance of
adequate accounting records in accordance with the provision of the Act
for safeguarding of the assets of the Company and for preventing and
detecting the 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 internal financial control, 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.
III. Auditors' 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
there under.
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 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 true
and fair view 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 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 reasonable basis for our audit opinion.
IV. Qualified Opinion
As stated in the Note no as referred below of the financial statement:
1. As stated in Note No. 3(b) of the financial statements,
Non-provision of interest liability amounting to Rs. 1,741,943,789 of
M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL), who have been
absolutely assigned all rights and interests in the financial
assistance of the Company, vide Assignment Agreement dated 28.03.2014
in respect of the Loan which was taken in the earlier years by the
Company from Central Bank of India based on the estimates of the
management that the liability that exists in the books of accounts
would be sufficient to meet the proposed One Time Settlement(OTS)
amount, which will be negotiated with EARCL. On account of the
aforesaid non-provision towards interest, loss for the year and
borrowing have been has been understated by Rs. 1,741,943,789.
2. As explained in Note No.32 of the financial statements,
Non-provision in respect of Deposit given to one of the party which is
shown under the head Long term loans and advances amounting to Rs
20,00,00,000. The said deposit is given for occupying rent free area in
the proposed newly constructed building. However, the said project is
still on hold by the developer but the management is hopeful of its
performance in near future. On account of the aforesaid non-provision,
loss for the year has been understated and deposit have been has been
overstated by Rs 20,00,00,000.
3. As stated in Note No 25 of the financial statements, which states
that financials of one of the subsidiary Company are consolidated based
on management drawn accounts adopted by the board of directors of that
company. On account of the same assets amounting to Rs 535029 Lacs and
cash flow of Rs1.89 Lacs has been consolidated. We have neither
reviewed the said financial statements of the said subsidiary company
nor do we express any opinion on it.
4. As stated in Note No. 34 of the financial statements, in case of
one of the Company's subsidiary Ennertech Biofuels Limited regarding
granting interest free loan to its related party amounting to Rs
41,00,00,000/- there by overstating the loss for the year and
understating to an amount which is unascertainable.
5. As stated in Note No. 33 of the financial statements, in case of
one of the Company's Rajasthan Solar Power Company Private Limited
regarding non provision of amount given to advance to supplier which is
pending performance/ recovery amounting to Rs35,75,00,000 there by
understating the loss for the year and overstating short term Loans &
Advances to the said tune to an amount which is unascertainable.
V. 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 matter
described in the Basis for Qualified Opinion paragraph, 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 Consolidated Balance Sheet, of the state of
affairs of the Group as at March 31, 2015;
(b) in the case of the Consolidated Statement of Profit and Loss, of
the Loss of the Group for the year ended on that date and
(c) in the case of the Consolidated Cash Flow Statement, of the cash
flows of the Group for the year ended on that date.
Annexure to the Auditors' Report
(On the Financial Statements for the year ended 31st March 2015) As
stated in the Auditors report that the financial statement of one of
the subsidiary has been consolidated based on unaudited financials our
report does not include report of the said subsidiary company.
(i) Fixed Assets
In respect of the fixed assets of holding company and Subsidiary
companies,
a) The Company has maintained proper records pertaining to fixed assets
showing full particulars including quantitative details and situation
of fixed assets.
b) During the year, the fixed assets have been physically verified by
the management in a phased periodical manner, which in our opinion is
reasonable.
c) In case of one of the subsidiary Rajasthan Solar Power Company
Private Limited, the Company does not have fixed assets during the year
under review.
(ii) Inventories
The Company does not have any inventory during the year under review.
(iii) Loans & Advances either granted or taken
a) The Company has granted loan to two body corporate being the parties
covered under the register maintained under section 189 of the Act. The
maximum and closing balance of the said loan is Rs 59,90,33,623 /- and
Rs 58,20,09,861 / - respectively.
b) In our opinion, the rate of interest and other terms and conditions
for such loan is prima facie, prejudicial to the interest of the
Company.
c) In respect of the loan granted, the same is recoverable on demand
and hence we cannot comment on regulatory of payment.
(iv) Internal Controls
In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls in respect of these
areas.
(v) Public Deposits
According to the information and explanations given to us, the Company
has not accepted deposits as per the directives issued by Reserve Bank
of India and the provisions of Sections 73 to 76 or any other relevant
provisions of the Act and the rules framed there under.
(vi) Cost Records
In case of holding company the maintenance of cost records pursuant to
the Rules made by the Central Government under section 148 (1) of the
Companies Act, 2013 has been prescribed in respect of the class of the
Company (Electricity industry). However, the Company is exempt from
the maintenance of such records as the aggregate value of the machinery
and plant installed as on the last date of the preceding financial year
does not exceed the limits as specified for a small scale undertaking
under the provisions of the Industries (Development and Regulation) Act
1951 (65 of 91) i.e. Rs 100 Lakh. In case of subsidiary company the
Central Government has not prescribed maintenance of cost records for
other subsidiaries under section 148 (1) of the Companies Act, 2013.
Accordingly this clause is not applicable.
(vii) Statutory Dues
a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have not been regularly
deposited with the appropriate authorities, though there has been a
slight delay in a few cases. No undisputed amounts payable in respect
thereof were outstanding as at the yearend for a period of more than
six months from the date they became payable except Income Tax
amounting to Rs 560,975and Service Tax amounting to Rs 11913
(b) There are no dues in respect of income tax, sales tax, wealth tax,
service tax, customs duty, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute
(viii) Accumulated Losses
In our opinion, the Company's accumulated losses at the end of the
financial year are more than fifty per cent of its net worth. Further,
the Company has incurred cash losses of Rs 90,65,536 during the
financial year covered by our audit and Rs.238,782,951 in the
immediately preceding financial year.
(ix) Dues to Financial Institutions/Banks
The Company has not taken loan during the year under review.
(x) Guarantees given
As per the records verified by us and based on the explanations given
to us, during the year the Company has not given any guarantee for
loans taken by others from bank or financial institutions, the terms
and conditions, whereof, are in our opinion prejudicial to the interest
of the Company.
(xi) Application of Funds raised
According to the information and explanation given to us, in our
opinion, no term loans were raised during the year under review.
(xii) Frauds
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 such case by the management.
For Shyam Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Sd/-
Shyam Malpani
Place: Mumbai Proprietor
Dated: 14th November 2015 Membership No. F- 34171 | 