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The Members of SJVN LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SJVN LIMITED ("the Company") , which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income) , the Statement of Cash Flows, the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone Ind AS financial statements") .
Managements Responsibility for the Standalone Ind AS Financial Statements
The Companys 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 standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position) , profit or loss (financial performance including other comprehensive income) , cash flows and statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its profit/loss (financial performance including other comprehensive income) , its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the standalone Ind AS financial statements:
a) Note No. 2.31 to the standalone Ind AS financial statements in respect of accounting of sales on provisionally approved tariff.
b) Note No. 2.38 to the standalone Ind AS financial statements, regarding the uncertainty related to the outcome of the claims/ arbitration proceedings and lawsuit filed by/against the Company on/ by contractors and others. In some of the cases the arbitration award has been decided against the Company/ lost in lower courts and the company is pursuing the matter in higher courts. Management does not envisage any possible outflow in respect of decisions against the company other than those already provided for in the books of account.
c) Note 2.41 to the Ind AS financial statements, which describes that a fire break out at Charanka Solar Power Project on 14 Feb, 2018 which resulted into shut down of whole plant for almost 69 days, causing loss of revenue to the company.
d) Note 2.42 to the Ind AS financial statements, regarding the certain balances which are subject to reconciliation / confirmation and respective consequential adjustments.
Our opinion is not modified in respect of these matters.
The audit of prior period financial statements was performed by another auditor and law or regulation permits us being the auditor for the current period to refer to the report of the predecessor auditor on corresponding figures. Accordingly we state:
a) That the audit of prior period financial statements was performed by another auditor.
b) That the predecessor auditors had expressed Modified Opinion based on the excessive payments (Hydro Allowance) being made by the company against the capital works which leads to overstatement of Property Plant and Equipment and correspondingly understatement of Profits due to enhanced depreciation. However, the same is resolved in the current year.
c) The date of audit report on prior period financial statements is 29th May, 2017.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. We are enclosing our report in terms of Section 143 (5) of the Act on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the "Annexure-B" on the directions issued by Comptroller and Auditor General of India.
3. 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, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Ind AS Financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with the relevant rules issued there under.
e) In view of the exemptions given vide Notification No. G.S.R. 463 (E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, the provisions of Section 164 (2) of the Companies Act, 2013 regarding disqualification of directors, are not applicable to the company.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to the separate Report in "Annexure C".
g) 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, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company have disclosed the impact of pending litigations on its financial position in Note No.2.38 to standalone Ind AS 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 has been no delay in transferring amounts which were required to be transferred to Investor Education and Protection Fund by the Company.
|For A P R A & Associates LLP|
|(Arun Kumar Gupta)|
|Place: New Delhi||Partner|
|Date: 28th May 2018||M.No.089657|
"ANNEXURE- A" TO THE AUDITORS REPORT
(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of SJVN LIMITED for the year ended 31st March, 2018)
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets except for inter unit transfers.
(b) As explained to us all the assets were got physically verified during the year by the management from outside agency. We were informed that no material discrepancies were noticed on such verification.
(c) Title deed of immovable properties were not shown to us except those which were acquired through acquisition order of Govt. At RHEP neither any conveyance deed nor any lease deed has been executed for forest land. Similarly neither any conveyance deed nor any lease deed has been executed for Land acquired at Sadla project of the company.
ii. The inventories of the company consists of stores and spare parts. We were informed that these have been physically verified during the year by the management through outside agencies. We were informed that no material discrepancies were noticed on such verification.
iii. According to the information and explanations given to us, 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. Accordingly, the provisions of clause 3 (iii) (a) , (b) and (c) of the order are not applicable
iv. In our opinion and according to the information and explanations given to us, the company has complied with provisions of section 185 and 186 of the Companies Act, 2013, with respect to the loans, investments, guarantees and securities.
v. In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from public in terms of section 73 to 76 or any other provisions of the Companies Act, 2013 and rules made there under.
vi. The company has made and maintained cost accounts and records as specified by the Central Government under section 148 (1) of the Companies Act 2013. However, we have not made a detailed examination of these accounts and records with a view to determine whether they are accurate and complete.
vii. a) According to the information and explanations and records
of the Company, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Income tax, GST, Service tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues with the appropriate authorities. There are no outstanding statutory dues for a period of more than six months from the date they became payable as on 31st March, 2018. We are informed that the provisions of Employees State Insurance Act are not applicable to the company.
Further as per our observation, the Company has not accounted for and paid Service Tax/ GST on the following transactions during the year under audit:
|Name of the Statute||Nature of the Transaction||Taxable Amount (Rs Lakh)|
|Service Tax||Liquidated damages recovered from contractors/ vendors from 01.04.2017 to 30.06.2017||3037.82|
|Service Tax / GST||Forfeiture of Security Deposit of contractors/ vendors||1.75|
|GST||Food expenses recovered from employees||43.73|
|GST||Supply of laptop to employees||6.74|
|GST||Recovery towards private use of vehicles by employees||4.28|
b) According to the information and explanations given to us, dues of income tax, GST, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other material statutory dues that have not been deposited on account of any dispute are given below:
|Name of the Statute||Nature of the Dues||Amount (Rs in Lakh)||Forum where dispute is pending|
|The Central Excise Act, 1944||Excise Duty Penalty||1.00||CESTAT|
viii. Based upon the audit procedure performed and information and explanation given to us by the management, the company has not defaulted in repayment of loans and borrowing to any financial institution, banks, government or dues to debenture holders.
ix. The company has not raised money by way of initial public offer or further public offer and the term loans. However, The Board of Directors of the Company approved a proposal for buy back of equity shares at its meeting held on 8th January 2018.As per approval, the Company completed buy back of 206831325 shares of Rs 10 each (representing 5% of total paid up equity capital) on 12th March 2018, from the shareholders on a proportionate basis by way of a tender offer at a price of Rs 38.75 per equity share for an aggregate amount of Rs 80147 lakh in accordance with the provisions of the Companies Act 2013 and the SEBI regulations.
x. Based upon the audit procedure performed and information and explanation given to us, we report that financial irregularities were committed by one of the Company executives in Arunachal Pradesh which were detected during the financial year 2014-15 and recovery was initiated during the year 2016-17. However, no accounting entries were passed to recognize the same. On insistence, Company booked Rs 8.13 Lakh as recoverable from employee but recovery of interest on the same is yet to be accounted for.
xi. In view of the exemptions given vide in terms of Notification No. G.S.R. 463 (E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, the provisions of Section 197 read with schedule V to the Companies Act, 2013 regarding managerial remuneration, are not applicable to the company.
xii. The company is not a Nidhi Company.
xiii. All the transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable and the details have been disclosed in the Note No. 2.46 to the financial statements, as required by the applicable accounting standards.
xiv. The company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures during the year.
xv. In our opinion and according to the information and explanations given to us, the company has not entered into any non-cash transaction with Directors or persons connected with him.
xvi. The company is not required to be registered under schedule 45-1A of the Reserve Bank of India Act 1934.
|For A P R A &Associates LLP|
|(Arun Kumar Gupta)|
|Place: New Delhi||Partner|
|Date: 28th May 2018||M.No.089657|