SJVN Ltd Auditors Report.
The Members of SJVN Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SJVN Limited (the Company), which comprise the Balance Sheet as at 31st March 2016,the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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 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 auditors 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 Companys preparation of the financial statements that give a true & 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 accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016, and its profit and its cash flows for the year ended on that date.:
Emphasis of Matter
"We draw attention to Note No. 2.24 to the financial statements in respect of accounting of sales on provisionally approved tariff for 2009-14 period, arrear billing being contested by HP Govt. and Note no. 2.33 regarding contingent liability which describes the uncertainty related to the outcome of the claims/arbitration proceedings and cases filed in courts by/ against the Company on/by contractors and others". Pending approval of tariff by CERC in respect of Nathpa Jhakri Hydro Power Station, Sales have been booked in accordance with the tariff approved & applicable as on 31.03.2014 as provided in Tariff Regulations, 2014.
GoHP has contested the arrear billing of NJHPS for the period 2009-14 on the basis that the tariff is provisional & not finally determined. However, it is expected that the final tariff will not be less than the provisional tariff.
The contingent liability, will be dealt in accordance with the outcome of the cases, if required.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure-I, 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-2 on the directions issued by Comptroller and Auditor General of India.
3. As required by section143(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 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) With respect to adequacy of Internal Financial Controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-3" in our opinion the internal financial controls system is adequate but the operating effectiveness of such controls need be improved.
f) This being government company, Section 164 (2) of the Act is not applicable.
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 has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 2.33 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts as at 31.03.2016 which were required to be transferred to the Investor Education and Protection Fund by the Company.
|For Soni Gulati & Co.|
|(Suresh Chand Soni)|
|Date: 27th May, 2016||M.No. 083106|
ANNEXURE 1 TO THE AUDITORS REPORT
Annexure referred to in our report of even date to the members of SJVN LIMITED on the accounts for the year ended 31st March 2016.
(i) (a) The company has generally maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
(b) As explained to us all the assets were got physically verified by the management from outside agency during the year. 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. At NJHPS some Land was decapitalised last year being disputed, but no conveyance deeds were available.
(ii) The inventory of the company consisting of stores and spare parts. We were informed that these have been physically verified by the management through outside agency during the year. However, in our opinion this need be strengthen, during audit we have observed that certain items which were shown as consumption in accounts were actually lying in stores during May 2016 and were in stores even on 31.03.2016.
(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. In view of above, the clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable.
(iv) In respect of loans, investments, guarantees and security, the company has complied with provisions of section 185 and 186 of the Companies Act,2013.
(v) The company has not accepted any deposits from the public in terms of section 73 to 76 or any provisions of the Companies Act, 2013 and rules there under.
(vi) We have broadly reviewed the accounts and cost records maintained by the company under Section 148(1)of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.
(vii) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues applicable to it, and there are no undisputed dues outstanding as on 31st March 2016 for a period of more than six months from the date they became payable. We are informed that the provisions of Employees State Insurance Act are not applicable to the company. (b) According to the information and explanations given to us, dues of income tax, sales tax, 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|
|Finance Act, 1994||Service Tax||1236.00||Commissioner, Excise & Service Tax, Chandigarh|
(viii) The Company has not defaulted any repayment of loans or borrowing to any financial institution or bank or Government or dues to debenture holders.
(ix) No money was raised by way of initial public offer or further public offer during the year.
(x) As per information provided to us no fraud by the company or any fraud by officers and employees of the company has been noticed/ reported during the year.
(xi) This being a government company Section 197 of the Act is not applicable.
(xii) Company is not a Nidhi Company.
(xiii) As per information available to us all transactions with related parties are in compliance with Section 177 & 188 of the Companies act 2013, wherever applicable and the details have been disclosed in the Financial Statements etc as required by the applicable Accounting Standards.
(xiv) As informed to us, the company has not made any preferential allotment to private placement of shares or fully convertible debentures during the year under review.
(xv) As informed to us the company has not entered in to any non-cash transaction with directors or persons connected with him.
(xvi) Section 45-IA of the Reserve Bank of India Act, 1934 is not applicable to the company.
|For Soni Gulati & Co.|
|Firm Regn.No. 008770N|
|(Suresh Chand Soni)|
|Date: 27th May, 2016||M.No. 083106|