Jaiprakash Power Ventures Auditors Report


To the Members of Jaiprakash Power Ventures Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Jaiprakash Power Ventures Limited ("the Company"), which comprise the Balance sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the effects / possible effects of our observations stated in "Basis for Qualified Opinion"section below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit (including other comprehensive income),changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

Attention is drawn to:

(a) As stated in note no. 44(e) of the standalone financial statements for the year ended 31st March, 2023, the Company has given/provided corporate guarantee of USD 1,500 lakhs (31st March, 2022 USD 1,500 lakhs) for loans granted by the lender to Jaiprakash Associates Limited (JAL) (the party to whom the Company is an associate) of amounting to Rs. 70,333 lakhs (31st March,2022 Rs. 70,333 lakhs) for which fair valuation has not been done as per the applicable IND-AS as of 31st March, 2023 and also no provision there against has been made in these standalone financial statements (in the absence of fair valuation impact unascertained).

(b) As stated in note no. 46 and 53(a) of the standalone financial statements for the year ended 31st March, 2023, no provision for diminution in value against long-term investments made in subsidiaries amounting to Rs. 78,089 lakhs including amount of Rs.55,212 lakhs investment in SPGCL (31st March,2022 Rs. 78,795 lakhs and including amount of Rs. 55,207 lakhs investment in SPGCL) (Book Value) has been made by the management as in the opinion of the management such diminution is temporary in nature considering the intrinsic value of the assets, future prospects and settlement of claims as stated in note no.53(d) of the standalone financial statements (impact unascertainable).

Having regard to the above, management of the Company has concluded that no provision against diminution in value of investment made, as stated above, in subsidiary companies is necessary at this stage.

Matters stated in para (a) and (b) above had also been qualified in our report on preceding year standalone financial statements.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under Section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the ‘Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters

We draw attention to the following matters:

(a) As stated in note no. 54 of the standalone financial statements for the year ended 31st March, 2023 regarding outstanding of DMG of Rs. 21,690 lakhs (approx.) (excluding interest, amount not ascertained) (including GST) for which the Company is responsible as principal contractor. As stated in the said note, sand contracts have been sub-contracted on back -to -back basis. Further, as stated, sub-contractor has also submitted required bank guarantees to the DMG (Rs.120 crores) and as per the sub-contracts signed, the sub-contractor is liable to pay due instalments amount including delay charges to DMG. Further, Rs. 3,556 lakhs also due and recoverable from sub-contractor. Balances of sub-contractor and DMG are subject to confirmation and reconciliation. Purchase, sale and inventory of sand have been accounted for as per the statement of the sub-contractor. As stated in note no. 54 and as per contract terms signed with sub-contractor, management believes that there will not be any material impact on these financial statements on this account and amount recoverable from sub-contractor Rs. 25,246 lakhs (Including payable to DMG Rs. 21,690 lakhs) is considered good.

(b) Attention is invited to note no.47 of the standalone financial statements for the year ended 31st March, 2023 regarding dues of Rs. 42,442 lakhs being the amount excess paid to the Company as assessed and estimated by the UPPCL as stated in note including carrying cost (excess payment made to the Company towards income tax and secondary energy charges for financial years

2007-08 to 2019-20 and 2014-15 to 2019-20 respectively) against which UPPCL has also hold back Rs. 22,500 lakhs (including carrying cost of Rs. 13,581 lakhs up to March 2023). As stated in the note in the opinion of the management, Company has credible case in its favour and disallowance made by the UPPCL on account of income tax and secondary energy charges are not in line with the terms of PPA signed with UPPCL. Accordingly, as stated in the said note, no provision against the stated amount and carrying cost has been considered necessary by the management at this stage and the amount deducted / retained by UPPCL of amounting to Rs. 22,500 lakhs and shown as recoverable is considered good by the management.

(c) As stated in note no. 48 (i) of the standalone financial statements for the year ended 31st March, 2023, no provision has been considered necessary by the management against Entry Tax in respect of Unit- Nigrie STPP (including Nigrie Cement Grinding Unit) amounting to Rs. 10,871 lakhs (31st March, 2022 Rs. 10,871 lakhs) and interest thereon (impact unascertainable). In respect of the stated unit, receipts of approval for extension of the time for eligibility for exemption from payment of entry tax is pending from concerned authority, as stated in the said note, for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the above entry tax demand, till date of Rs. 6,685 lakhs (31st March, 2022 Rs. 6,085 lakhs) has been deposited and shown as part of other non-current assets which in the opinion of the management is good and recoverable.

(d) As stated in note no. 59(a) & 59(c) of the standalone financial statements for the year ended 31st March, 2023 regarding pending confirmations/reconciliation of balances of certain secured and unsecured borrowings (current & non-current), banks (including certain fixed deposits), trade receivables/payables (including MSME parties) and others (including capital creditors and of Sub-contractors, CHAs and receivables/payables from/to related parties), liabilities, loans & advances and inventory lying with third parties/in transit. In this regard, as stated in the note, internal control is being strengthened through process automation (including for as stated in note no.59(b) regarding of fuel procurement and consumption processes which are in process of further strengthening).

The management is confident that on confirmation/ reconciliation there will not be any material impact on the state of affairs as stated in said notes.

(e) For deferred tax assets (net) on unabsorbed depreciation & business losses and of MAT credit entitlement as on 31st March 2023 of amounting to Rs. 2,216 lakhs and Rs. 2,049 lakhs respectively, the Management is confident about its realisability. Accordingly, these are considered good by the management as stated in Note no. 66(c) of the audited standalone financial statements for the year ended 31st March, 2023.

(f) As stated in the note no. 52 of the standalone financial statements for the year ended 31st March 2023 regarding the pending recovery of capacity charges of amounting to Rs. 17,706 lakhs (31st March, 2022 Rs. 17,706 lakhs), which have been disputed by MPPMCL. Company is contesting with MPPMCL and had filed petitions with MPERC as stated in the said note, which partially allowed the claim of the Company and Company has filed an appeal with APTEL and also MPPMCL has filed an appeal with APTEL against Order of MPERC. As stated in note, in the opinion of the management, above stated amount (and also delayed payment surcharge of Rs. 3795 lakhs till Oct21) is good and fully recoverable and hence no provision has been considered necessary by the management at this stage.

Our opinion is not modified in respect of above stated matters in para (a) to (f).

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the "Basis for Qualified Opinion" and "Emphasis of Matters" section we have determined the matters described below to be the key audit matter to be communicated in our report. For each matter below, our description of how our audit addressed the matter is provided in that context:

Description of Key Audit Matters Audit procedure to address the key audit matters
Accounting for revenue
Companys power sales revenues are accounted for in accordance with provisional/ multi-year tariff orders and sometime based on past provisional approved/notified tariff rates determined by regulator which are subject to true up. The method of determining such tariff is complex and judgmental and requires estimates and assumptions with respect to the annual capacity charges consisting of depreciation, interest on loan, return on equity, interest on working capital and operation & maintenance expenses etc. which may vary and require adjustments at the time of true up and may have significant impact on the revenue(Note no. 31 and 61 of the standalone financial statements). Our procedures included:
1. Considering the Companys accounting policies with respect to accounting of the true up adjustments;
2. Reviewed past completed assessment/ final price determination;
3. Assessing the appropriateness of the Companys revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and the testing thereof.
4. Where relevant internal assessment, reading external legal advice obtained by management;
5. Meeting with Sr. management/officials and reading subsequent correspondence including regulatory orders issued by the concerned authority from time to time;
6. Verification of basis for the raising invoices (including for the earlier period) and realization made against the same with the orders of the regulators; and
7. Reading the loan agreements with the lenders to assess applicable interest rate and other charges and/or other terms/ conditions of such agreements.
8. Performing analytical procedures on current year revenue based on the monthly/seasonal trends and where appropriate, conducting further enquiries and testing.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this Auditors Report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position/state of affairs, financial performance, total comprehensive income,changes in equity andcash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.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 the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current periodand are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the "Annexure A"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) 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 including Other Comprehensive Income,Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account;

(d) In our opinion,except for the effect / possible effect of the matters described in ‘Basis for Qualified Opinion section above, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Companies Act,2013;

(e) The matters described in ‘Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company; (f) On the basis of the written representations received from the directors as on March 31st, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31st, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report. Our report express modified opinion on the adequacy and operation effectiveness of the companys internal financial controls over financial reporting;

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 itsfinancial statements Refer Note no. 44to the standalone financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii) There were no amount which required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2023.

iv) a) The management has represented that to the best of its knowledge and belief, no funds (which are material either individually or in aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. b) The management has represented that, no funds (which are material either individually or in aggregate) have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c) Based on such audit procedures that we have considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above as required by Rule11(e) of Companies (Audit & Auditors) Rules, 2014, as amended, contain any material mis-statement.

v) The Company has not declared or paid dividend during the year, accordingly the provisions of section 123 of the Companies Act, 2013 are not applicable.

vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from 1st April, 2023, and accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.

(i) In our opinion and to the best of our information and according to the explanation given to us, the managerial remuneration for the year ended 31st March, 2023 has been paid/ provided for by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act.

For LODHA & CO.

Chartered Accountants

ICAI Firm Registration Number: 301051E

(N K Lodha)

Partner

Membership Number:085155

UDIN : 23085155BGXASO2974

Place: New Delhi

Date: 9th May, 2022

Annexure "A" referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the standalone financial statements of Jaiprakash Power Ventures Limited for the year ended 31st March 2023.

i. (a) (A) As per the information, explanation and records provided to us, the Company has maintained proper records of Property, Plant and Equipment(however in the process of compiling full records component-wise/department-wise) showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) As informed to us, the Company is in the process of compiling location wise full records, showing full particulars of its Intangible assets.

(b) As per the physical verification programme, certain Property, Plant and Equipment were physically verified during the year by the management according to the phased programme of periodical verification (to cover all the property, plant and Equipment over the period of three years) which in our opinion is reasonable having regard to the size of the Company and the nature of its Property, Plant and Equipment. Based on information and records provided, no material discrepancies noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of the property tax receipts and lease agreements and/ or registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds of all the immovable properties disclosed (except properties where the Company is the lessee and lease agreements are duly executed in the favour of the Company) in the financial statements and included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date, except for the following:

Description of property Gross carrying value (Rs. In Lakhs) Held in name of Whether promoter, director or their relative or employee Period held – indicate range, where appropriate Reason for not being held in name of company
Land Rs. 4.34 Lakhs Bina Power Supply Company Limited No 25th July, 2011 Situated at Bina (Bina power plant) which is in the name of the erstwhile company which had been merged with the company vide Order dated 25th July 2011 of the Honble High Court of Himachal Pradesh. As explained, management is in process of getting it transferred in the name of the Company.

(d) The Company has not revalued any of its property, plant and equipment (including Right of Use assets) and intangible assets during the year.

(e) According to the information and explanations given to us and records provided, no proceedings have been initiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has disclosed the details in its standalone financials statements does not arise.

ii. (a) The inventories of the Company [except stock lying with the third parties and in transit, for which confirmations have been received/material received and this is to be read with note no. 54 and 59 (a)&(b)] has been physically verified by the management/outside agencies at reasonable intervals and in respect of inventory of stores & spares there is perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. Discrepancies noticed were not of 10% or more in the aggregate for each class of inventories on such physical verification of inventories when compared with books of account and have been properly adjusted in the books of accounts.

(b) According to the information and explanations given to us and as per the records verified, the Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, from banks on the basis of security of current assets. In our opinion and according to the information and explanations given to us, the quarterly stock statements/ returns filed by the Company with such banks are generally in agreement with the unaudited books of account of the Company of the respective quarters of current financial year except the following:

Quarter ended Particulars of Securities Provided Amount as reported in the quarterly return/ stock statement (Rs. Lakhs) Amount as per books of account (Rs. Lakhs) Amount of difference (Rs. Lakhs) Reason for material discrepancies
June22 For Security provided related to working capital, refer note no. 21.2(c) and 21.3(c). 41,226 42,512 1,286 Advances to supplier of materials and liabilities payable towards material, not been considered in the provisional data/information/ returns submitted with banks.
Sept22 41,414 45,893 4,479
Dec22 37,777 42,330 4,553
Mar23 28,458 26,207 (2,251)

[Refer note no. 68(viii)of the standalone financial statements] iii. The Company has made investment in one of its subsidiary companies during the current year and has not provided guarantee or security and granted loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year.

(a) The Company has not granted loans or advances in the nature of loans,secured or unsecured, or stood guarantee or provided security to companies, firms, Limited Liability Partnerships or any other parties during the year and hence reporting under clause 3 (iii) (a) of the order is not applicable.

(b) The investments made during the year are, in our opinion, prima facie, not prejudicial to the Companys interest.

(c) Company has not granted any loans or advances in the nature of loans during the year and is not having any outstanding balance of any loans or advances in the nature of loans at the beginning of the current year and end of the year. Hence, reporting under clause 3 (iii) (c), (d), (e)& (f) of the Order is not applicable.

iv. According to the information, explanations and representations provided by the management and based upon audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security, the Company has complied with the provisions of the Section 185 and 186 of the Companies Act, 2013.

v. In our opinion and according to the information and explanations given to us, the Company has complied with the directive issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed there under (to the extent applicable). Based on the records and information and explanations provided to us, the company has not accepted any deposit or amounts which are deemed to be deposits from the public during the year. We have been informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other Tribunal in this regard.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, 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.

vii. a. According to the records of the Company, undisputed statutory dues including goods and service tax, provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, wherever applicable, have generally been deposited though with delays with the appropriate authorities during the year in some cases which have been paid with applicable interest and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2023 except Interest on VAT of Rs. 264 lakhs and Interest on Electricity duty/Development cess of Rs. 2199 lakhs, TCS Rs. 14 lakhs, Interest on TCS Rs. 3 lakhs and Interest on GST Rs. 585 lakhs b. According to the records and information & explanations given to us, details of statutory dues referred to in sub-clause (a) above which have not been deposited as on 31st March 2023 on account of disputes are given below: -

Name of Statute Nature of dues Period to which amount relates Forum where dispute is pending Amount in Rs. Lakhs
Income Tax Act, 1961 Income Tax Assessment year 2005-06 Commissioner of Income Tax (Appeals), Mumbai 172
Assessment year 2015-16 Commissioner of Income Tax (Appeals), Jabalpur 99
Assessment year 2016-17 & 2021-22 Commissioner of Income Tax (Appeals), New Delhi 70,633
Diversion Tax and Land Cess Diversion Tax and Land Cess FY 1998-99 Board of Revenue, Gwalior 8
Entry Tax under the M.P. VAT Act, 2002 Entry Tax # FY 2012-13, 2013- 14 and 2016-17 Additional Commissioner of Commercial Tax, Bhopal 3,156
FY 2014-15 and 2015-16 Madhya Pradesh High Court, Jabalpur 6,972
FY 2014-15 to FY Appellate Authority and Additional 4,186
2017-18 Commissioner of Commercial Tax, Jabalpur
M.P. VAT Act, 2002 VAT FY 2015-16 Appellate Authority and Additional Commissioner of Commercial Tax, Jabalpur 108
The Central Sale Tax Act, 1956 CST FY 2016-17 Appellate Authority and Additional Commissioner of Commercial Tax, Jabalpur 13
Electricity Duty Act Electricity Duty November 2016 to September 2019 Honble High Court, Jabalpur, Madhya Pradesh 95
The Uttarakhand Water Tax on Electricity Generation Act, 2012 Water Tax FY 2015-16 to July 2022. Honble High Court, Nainital 5,808
The Uttarakhand Green Energy Cess Tax Act, 2014 Green Energy Cess FY 2015-16 to 2022-23 Honble High Court, Nainital 12,431
Building and Other Construction Workers Welfare Cess Building and Other Construction Workers Welfare Cess Upto FY 16-17 Honble High Court, Jabalpur, Madhya Pradesh 7,185

[ # read with note no.48 of the standalone financial statement for the year ended 31st March 2023]

[The above is to be read with note no. 59 (a) of the standalone financial statement for the year ended 31st March 2023]

viii. There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) that has not been recorded in the books of accounts.

ix. (a) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in the repayment of loansduring the year (after taking into account the restructuring plan which was sanctioned under the provisions of applicable guidelines/ framework of RBI in the earlier year) or other borrowings or in the payment of interest thereon to any lender during the year [Read with note no. 21.8, 21.9 (i), 21.10 and 59 (a)].

(b) As per the information, records provided and representation made by the management, the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) On the basis of information and explanation given to us, the Company has not raised money through term loan during the current year. Hence, reporting under clause 3 (ix)(c) of the Order is not applicable.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) On an overall examination of the financial statements of the Company and based on the representations of the Company, we report that the Company has not taken any funds from any entity or person (or ofthe funds raised through issue of shares or borrowings) on account of or to meet the obligations of its subsidiaries.

(f) The Company has not raised loans during the year on the pledge of securities held in its Subsidiaries.

x. (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3 (x)(a) of the Order is not applicable. (b) During the year the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause (x)(b) of the Order is not applicable to the Company.

xi. (a) During the course of our examination of books and records of the Company, carried out in accordance with 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 by the Company or material fraud on the Company, noticed or reported during the year, nor we have been informed of any such case by the management.

(b) To the best of our knowledge, no report under subsection (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

(c) As represented to us by the Management, there were no whistle blower complaints received by the Company during the year which remained unattended by the competent authorities. xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company and hence reporting under clause 3(xii) of the Order is not applicable. xiii. According to the information and explanations and records made available by the management of the Company and audit procedure performed, for transactions with the related parties during the year, the Company has complied with the provisions of Section 177 and 188 of the Act. As explained and as per records, details of related party transactions have been disclosed in the standalone financial statements as per the applicable Indian Accounting Standards

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

(b) We have considered, the internal audit reports issued to the Company during the year and till date in determining the nature, timing and extent of our audit procedures. xv. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with themduring the year and hence, provisions of section 192 of the Act are not applicable to the Company. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and hence reporting under clause 3 (xvi)(a), (b) and (c) of the Order is not applicable.

(b) As per the information and representation provided by the management, there is no core investment company within the group (as defined in Core

Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3 (xvi) (d) of the Order is not applicable. We have not, however, separately evaluated whether the information provided by the management is accurate and complete.

xvii. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of the Company during the year.

xix. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities (as per the payment schedule/ rescheduled), implementation of debt restructuring vide Framework Agreement dated April 18, 2019 under the provisions of applicable guidelines/framework of RBI (Note no. 21.8 of the standalone financial statements for the year ended 31st March 2023), other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company and/ or certificate with respect to meeting financial obligations by the Company as and when they fall due. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. xx. The Company is not required to spent amount towards Corporate Social Responsibility (CSR) during the year. Accordingly, reporting under clause (xx) of the Order is not applicable for the year. xxi. The reporting under clause 3 (xxi) of the Order is not applicable in respect of audit of the standalone financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

For LODHA & CO.

Chartered Accountants

Firms Registration No. 301051E

(N.K. LODHA)

Partner

Membership No: 085155

Place : New Delhi Date: 9th May 2023

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF JAIPRAKASH POWER VENTURES LIMITED

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 ("the Act"))

We have audited the internal financial controls over financial reporting of JAIPRAKASH POWER VENTURES LIMITED

("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting with reference to these Financial Statements

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition ,use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent limitations of Internal Financial Controls Over Financial Reporting with reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future are subject to the risk that the internal financial control over financial reporting may be come in adequate because of changes in conditions ,or that the degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2023:

(i) Fair valuation of corporate guarantee provided by the company against loans granted by the lender to Jaiprakash Associates Limited as stated in note no. 44 (e) (the party to whom the company is associate) as per applicable IND-AS as on 31 March 2023, has not been carried out which could potentially have material impact on the financial statements.

(ii) Evaluation and assessment of recoverability [including provision has not been made against investments as stated in note no. 46 and 53(a)] in respect of certain investments made by the Company were not carried out which could potentially result in not making provision in books against these investments resulting in higher value of investments in Books and higher statement of profit and net worth carried over.

A ‘Material weakness is a deficiency, or a combination of deficiencies in internal financial controls over financial, such there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2023 standalone financial statements of the Company, and these material weaknesses affect our opinion on the standalone financial statements of the Company for the year ended 31st

March 2023.

Emphasis of matters:

Attention is drawn to:

(a) As stated in note no. 54 of the standalone financial statements for the year ended 31st March, 2023 regarding outstanding of DMG of Rs. 21,690 lakhs (approx.) (excluding interest, amount not ascertained) (including GST) for which the Company is responsible as principal contractor. As stated in the said note, sand contracts have been sub-contracted on back -to -back basis. Further, as stated, sub-contractor has also submitted required bank guarantees to the DMG (Rs. 120 crores) and as per the sub-contracts signed, the sub-contractor is liable to pay due instalments amount including delay charges to DMG. Further, Rs. 3,556 lakhs also due and recoverable from sub-contractor. Balances of sub-contractor and DMG are subject to confirmation and reconciliation. Purchase, sale and inventory of sand have been accounted for as per the statement of the sub-contractor. As stated in note no. 54 and as per contract terms signed with sub-contractor, management believes that there will not be any material impact on these financial statements on this account and amount recoverable from sub-contractor Rs. 25,246 lakhs (Including payable to DMG Rs. 21,690 lakhs) is considered good.

(b) Attention is invited to note no.47 of the standalone financial statements for the year ended 31st March, 2023 regarding dues of Rs. 42,442 lakhs being the amount excess paid to the Company as assessed and estimated by the UPPCL as stated in note including carrying cost (excess payment made to the Company towards income tax and secondary energy charges for financial years 2007-08 to 2019-20 and

2014-15 to 2019-20 respectively) against which UPPCL has also hold back Rs. 22,500 lakhs (including carrying cost of Rs. 13,581 lakhs up to March 23). As stated in the note in the opinion of the management, Company has credible case in its favour. that (c) As stated in note no. 48 (i) of the standalone financial statements for the year ended 31st March, 2023, no provision has been considered necessary by the management against Entry Tax in respect of Unit- Nigrie STPP (including Nigrie Cement Grinding Unit) amounting to Rs. 10,871 lakhs (31st March, 2022 Rs. 10,871 lakhs) and interest thereon (impact unascertainable). In respect of the stated unit, receipts of approval for extension of the time for eligibility for exemption from payment of entry tax is pending from concerned authority, as stated in the said note, for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the above entry tax demand, till date of Rs. 6,685 lakhs (31st March, 2022 Rs. 6,085 lakhs) has been deposited and shown as part of other non-current assets which in the opinion of the management is good and recoverable.

(d) As stated in note no. 59(a) & 59(c) of the standalone financial statements for the year ended 31st March, 2023 regarding pending confirmations/reconciliation of balances of certain secured and unsecured borrowings (current & non-current), banks (including certain fixed deposits), trade receivables/payables (including MSME parties) and others (including capital creditors and of Sub-contractors, CHAs and receivables/payables from/to related parties), liabilities, loans & advances and inventory lying with third parties/in transit. In this regard, as stated in the note, internal control is being strengthened through process automation (including for as stated in note no.59(b) regarding of fuel procurement and consumption processes which are in process of further strengthening).

The management is confident that on confirmation/ reconciliation there will not be any material impact on the state of affairs as stated in said notes.

(e) For deferred tax assets (net) on unabsorbed depreciation & business losses and of MAT credit entitlement as on 31st March 2023 of amounting to Rs. 2,216 lakhs and Rs. 2,049 lakhs respectively, the Management is confident about its realisability. Accordingly, these are considered good by the management as stated in Note no. 66(c) of the audited standalone financial statements for the year ended 31st March, 2023.

(f) As stated in the note no. 52 of the standalone financial statements for the year ended 31st March 2023 regarding the pending recovery of capacity charges of amounting to Rs. 17,706 lakhs (31st March, 2022 Rs. 17,706 lakhs), which have been disputed by MPPMCL. Company is contesting with MPPMCL and had filed petitions with MPERC as stated in the said note, which partially allowed the claim of the Company and Company has filed an appeal with APTEL and also MPPMCL has filed an appeal with APTEL against Order of MPERC. As stated in note, in the opinion of the management, above stated amount (and also delayed payment surcharge of Rs. 3795 lakhs till Oct21) is good and fully recoverable and hence no provision has been considered necessary by the management at this stage.

Our opinion is not modified in respect of above stated matters in para (a) to (f).

For LODHA & CO.

Chartered Accountants

Firms Registration No. 301051E

(N.K. LODHA)

Partner

Membership No: 085155

Place : New Delhi

Date: 9th May 2023