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Birla Power Solutions Ltd - Auditor's Report

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Code: 517001
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Code: BIRLAPOWER
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1 Month : Rs 0.11 (36.36%)
1 Year : Rs 0.20 (-25.00%)
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INDEPENDENT AUDITOR




To the Members of

BIRLA POWER SOLUTIONS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of BIRLA POWER SOLUTIONS 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 appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

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) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books ;

c) the Balance Sheet, 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, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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 441A 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.

For THAKUR VAIDYANATH AIYAR & Co.
CHARTERED ACCOUNTANTS
Firm Reg. No. 000038N
Place: Mumbai C V Parameswar
Date: 28th May, 2013 Partner
Membership No. 11541

ANNEXURE TO INDEPENDENT AUDITORS REPORT

(REFFERED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT" OF OUR REPORT OF EVEN DATE)

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year under a program of verification laid down and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. As informed to us no material discrepancies were noticed on physical verification.

3. (a) The Company has granted loans to four Companies covered in the register maintained under Section 301 of the Act. The maximum amount outstanding at any time during the year was Rs.1329.26 lacs and the year end balance is Rs 1244.31 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of the aforesaid loans, the Companies are repaying the principal amount wherever stipulated and are also regular in payment of interest.

(d) In respect of the aforesaid loans, there are no overdue amounts.

(e) The Company has taken unsecured loans from two Companies covered in the register maintained under Section 301 of the Act. The maximum amount outstanding at any time during the year was Rs.1037.89 lacs and the year end balance is Rs 1022.45 lacs.

(f) In our opinion the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of the aforesaid loans, the Company is regular in repaying the principal amount wherever stipulated and is also regular in payment of interest.

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required 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 such contracts or arrangements and exceeding the value of Rs five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, in respect of compliance by the Company with the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public, we have to state that these have not been complied with. The non compliance relates to non repayment of the deposits on the due date, non payment of interest which has become due for payment, non maintenance of liquid assets to the extent required by Rule 3A of the Companies(Acceptance of Deposits)Rules, 1975, acceptance of fresh deposits even after the Company defaulted in repayment of earlier deposits, non intimation to the Company Law Board regarding default in compliance with the provisions of Section 58AA of the Companies Act, 1956 as well as non compliance with the orders passed by the Company Law Board in regard to refund of certain deposits and interest thereon.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of Income Tax, Sales Tax and Service tax, the Company is generally regular in depositing the undisputed statutory dues including provident fund, Investors Education and Protection Fund, wealth tax, excise duty, custom duty, cess and other material statutory dues as applicable, with the appropriate authorities. The extent of the arrears of Income Tax, Sales Tax and Service

Tax, outstanding as at March 31, 2013, for a period of more than six months from the date they became payable are as follows:

Sr. No Name of the Statute Nature of dues

Amount (Rs lacs.)

Period to which the amount relates

1 Sales Tax Acts Sales Tax

45.42

Upto 30th September 2012

2 Income Tax Act, 1961 Dividend Distribution Tax (including interest)

321.38

2010-11

3 Service Tax Service provider/ Service receiver

20.78

2011-12

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of Income-tax, Wealth-tax, Service-tax, Custom duty, Excise duty and Cess. The particulars of dues of Sales-tax as at March 31, 2013, which have not been deposited on account of disputes, are as follows:

Sr. No. Name of Statute Nature of Dues Amount (Rs. in Lacs) Forum where dispute is pending.
1 Delhi Sales Tax Act Sales Tax 3.77 Jt. Commissioner / Dy. Commissioner
2 Uttar Pradesh Sales Tax Act Sales Tax 63.63 Tribunal
3 Kerala Sales Tax Act Sales Tax 79.98 Tribunal / Dy. Commissioner /
4 Tamilnadu Sales Tax Act Sales Tax 18.57 Tribunal
5 Bihar Sales Tax Act Sales Tax 7.69 Jt. Commissioner Appeals
6 West Bengal Sales Tax Act Sales Tax 9.42 Directorate of commercial taxes / Revisionary Board
7 Orissa Sales Tax Act Sales Tax 1.29 Jt. Commissioner / Commissioner
8 Gujarat Sales Tax Act Sales Tax 2.25 Dy. Commissioner
9 Uttarakhand Sales Tax Act Sales Tax 48.60 Commissioner
Total 235.20

10. The Company has no accumulated losses as at March 31, 2013 and it has not incurred cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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 provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. The Company has not obtained any term loans during the year.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. 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 THAKUR VAIDYANATH AIYAR & CO.
CHARTERED ACCOUNTANTS
Firm Reg. No. 000038N
Place: Mumbai C V Parameswar
Date: 28th May, 2013 Partner
Membership No. 11541
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