We have audited the accompanying standalone Ind AS financial statements of Power Grid Corporation of India Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS Financial Statements”).
Management’s Responsibility for the Standalone Ind AS Financial Statements
The Company’s 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the 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 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 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.
Auditors’ Responsibility
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 auditor’s 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 Company’s 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s 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.
Opinion
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 2017, its 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. 37 (b) (ii) in respect of recognition of revenue from transmission assets for which final tariff orders are yet to be issued by the CERC; and
(b) Note No. 47(a) in respect of Balance confirmation, reconciliation and consequential adjustments, if any, of Trade Receivable and Recoverable and Trade and Other Payables.
Our opinion is not modified in respect of these matters.
Other Matters
(a) The comparative financial information of the company for the transition date opening balance sheet as at 1st April 2015, included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditors whose report dated 30th May 2015, for the year ended 31st March 2015, expressed a qualified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the company on the transition to the Ind AS, which have been audited by us.
(b) The comparative financial information of the company for the year ended 31st March 2016, included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us and our report expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the company on the transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the Annexure Rs.1’ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. In terms of sub section (5) of section 143 of the Companies Act, 2013, we give in the Annexure Rs.2’ a statement on the directions issued under the aforesaid section by the 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 (including Other Comprehensive Income), the Statement of Cash Flows, and the 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 Accounting Standards specified under section 133 of the Act, read with the relevant rules issued thereunder;
(e) In view of exemption given vide notification no. G. S. R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act 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 our separate report in Annexure Rs.3’.
(g) With respect to the other matters to be included in the Auditor’s 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 standalone Ind AS financial statements - Refer Note 49 and 63 to the standalone Ind AS 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The company has provided requisite disclosures in the standalone Ind AS financial statements as to holding as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016, on the basis of information available with the company. Based on audit procedures, and relying on management’s representations we report that disclosures are in accordance with books of accounts maintained by the company and as produced to us by the management. Refer Note 16.
As referred to in our Independent Auditors’ Report to the members of the Power Grid Corporation of India Limited, on the standalone Ind AS financial statements for the year ended 31st March, 2017, we report that:
(i) a) The Company has generally maintained records, showing full particulars including quantitative details and situation of Fixed Assets (Property, Plant & Equipment).
b) The fixed assets (Property, Plant & Equipment) have been physically verified by external agencies during the year. In our opinion, frequency of verification is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification.
c) In our opinion and according to information and explanations given to us and on the basis of an examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except:
|
No. of Cases
|
Cost (Rs.In crores)
|
Net Block (Rs.in crores)
|
Leasehold Land
|
10
|
51.86
|
42.15
|
Freehold Land
|
22
|
159.75
|
159.75
|
Buildings (Flats in Mumbai)
|
28
|
2.95
|
2.31
|
(ii) The inventories have been physically verified by external agencies during the year. In our opinion, frequency of verification is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us, the Company has granted unsecured loans to wholly owned subsidiaries covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act”).
a) The terms and conditions on which loans have been granted to the borrower companies covered under section 189 of the Act are not, prima facie, prejudicial to the interest of the company.
b) The schedule of repayment of principal and payment of interest has been stipulated and the repayments and receipts are regular.
c) There are no overdue amounts of more than 90 days in respect of loans granted to the companies listed in the register maintained under section 189 of the Act.
(iv) In our opinion and according to information and explanation given to us, the company has complied with provisions of section 185 and 186 of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from the public in accordance with the provisions of the sections 73 to 76 or any other relevant provisions of the Act, and the rules framed thereunder. Accordingly, paragraph 3(v) of the order is not applicable to the company.
(vi) We have broadly reviewed the cost records maintained by the company specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013, in respect of Transmission & Telecom Operations of the Company and we are of the opinion that prima facie the prescribed records have been made and maintained. However, we have not made detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues with appropriate authorities including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other statutory dues applicable to the Company and that there are no undisputed statutory dues outstanding as at 31st March, 2017 for a period of more than six months from the date they became payable. As informed, provisions of the Employees State Insurance Act are not applicable to the Company.
b) According to information and explanations given to us, there are no disputed dues of Duty of Customs or Duty of Excise which have not been deposited. However, following disputed demands of Income Tax or Sales Tax or Service Tax or Value Added Tax or Cess dues have not been deposited:
Name of the Statute
|
Nature of dues
|
Amount* (Rs. in crore)
|
Period to which the amount relates
|
Forum where dispute is pending
|
Income Tax Act, 1961
|
Income Tax
|
4.00
|
For the F.Y. 2004-05, 2005-06 & 2010-11
|
ITAT, Delhi
|
Income Tax Act, 1961
|
Income Tax
|
2.37
|
For the F.Y. 2012-13 & 2013-14
|
CIT (A) Delhi
|
Income Tax Act, 1961
|
Income Tax
|
6.16
|
|
Jurisdictional Assessing Officers of TANs
|
Income Tax Act, 1961
|
Income Tax
|
0.03
|
|
Jurisdictional Assessing Officer, Delhi
|
Chhattisgarh Entry Tax Act, 1976
|
Entry Tax
|
67.94
|
For the F.Y. 2012-13, 2013-14, 2014-15, 2015-16 & 2016-17
|
Asst. Commissioner, Commercial Tax, Durg
|
Finance Act, 1994
|
Service Tax
|
1.57
|
For the F.Y. 2003-04
|
CESTAT, Kolkata
|
Goa Building & Other Construction Workers Act & Rules thereunder
|
BOCW
|
0.04
|
For the F.Y. 2014-15 & 201516
|
---
|
Building and Other Construction Workers Welfare Cess Act, 1996
|
BOCW
|
4.23
|
For the F. Y. 2007-08
|
Hon’able High Court, Himachal Pradesh, Shimla
|
Income Tax Act, 1961
|
Interest on TDS on Perks
|
0.03
|
For F.Y.2010-11, 2011-12
|
CIT (Appeal), Shillong
|
J&K GST Act, 1962
|
Sales Tax
|
47.87
|
From F.Y.1996-97 to 2001-02
|
Sales Tax Appellate Tribunal, J&K
|
J&K GST Act, 1962
|
Sales Tax
|
115.38
|
From F.Y.2002-03 to 2011-12
|
Dy. Commissioner of Sales Tax (appeals) Jammu, J&K
|
Punjab Vat Act, 2005 (Entry Tax)
|
Entry Tax
|
9.64
|
From F.Y.2011-12 to 2013-14
|
Hon’able High Court Punjab & Haryana,
|
UP VAT
|
Sales Tax Demand
|
0.10
|
For F.Y. 2016-17
|
Hon’able Allahabad High Court
|
Total
|
|
259.36
|
|
|
* Demand amount including interest, net of amount paid under protest.
(viii) In our opinion and according to the information and explanations given to us the Company has not defaulted during the year in repayment of loans to its financial institutions, bankers and dues to the Bond holders.
(ix) In our opinion on an overall basis and according to the information and explanations given to us, the company has applied the term loans including funds raised through bonds for the purpose they were obtained. The company has raised funds by issuance of debt instruments (bonds) during the year. The company has not raised money by way of initial public offer or further public offer during the year.
(x) According to the information and explanations given to us and as represented by the management, we have been informed that no case of fraud has been committed on or by the company during the year.
(xi) In view of exemption given vide notification no. G. S. R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Company. Accordingly, paragraph 3(xi) of the order is not applicable to the company.
(xii) The company is not a Nidhi Company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the order is not applicable to the company.
(xiii) According to the information and explanations given to us and as represented by the management, all transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and the details have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) is not applicable to the company.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) is not applicable to the company.
(xvi) According to the information and explanations given to us the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) is not applicable to the company.
For S. K. Mittal & Co. For Parakh & Co. For Kothari & Co. For R. G. N. Price & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FRN : 001135N FRN : 001475C FRN : 301178E FRN : 002785S
(CA S. K. Mittal) (CA Indra Pal Singh) (CA Manaswy Kothari) (CA R. Rangarajan)
Partner Partner Partner Partner
M. No. 008506 M. No. 410433 M. No. 064601 M. No. 041883
Place : New Delhi
Date : 29th May, 2017
We have audited the accompanying standalone financial statements of
Power Grid Corporation of India Limited ("the Company"), which comprise
the Balance Sheet as at 31st March, 2016, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information,
Management''''s Responsibility for the Standalone Financial Statements
The Company''''s 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 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 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.
Auditors'''' Responsibility
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 the disclosures in the financial statements. The
procedures selected depend on the auditor''''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2016;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date;
(c) in the case of the Cash Flow Statement, of the cash lows for the
year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
Financial Statements:
(a) Note No. 2.25(b) in respect of provisional recognition of revenue
from transmission charges.
(b) Note No. 2.34(a) in respect of Balance confirmation, reconciliation
and consequential adjustments, if any, of Trade Receivable and
Recoverable and Trade and Other Payables.
Our opinion is not modified in respect of these matters. Report on
Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''''s Report) Order, 2016 ("the
Order"), issued by the Central Government of India in terms of sub-
section (11) of Section 143 of the Act, we give in the Annexure ''''1'''' a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. In terms of sub section (5) of section 143 of the Companies Act,
2013, we give in the Annexure''''2'''' a statement on the directions issued
under the aforesaid section by the 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 and the 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. On the basis of the written representations received from the
directors as on 31st March, 2016, and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2016, from being appointed as a director in terms of section 164(2) of
the Act.
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 our separate report in Annexure ''''3''''.
g. With respect to the other matters to be included in the Auditor''''s
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 2.38 and
2.52 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 has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors'''' Report
Annexure 1''''
As referred to in our Independent Auditors'''' Report to the members of
the Power Grid Corporation of India Limited (''''the Company''''), on the
standalone financial statements for the year ended 31st March, 2016, we
report that:
(i) a) The Company has generally maintained records, showing full
particulars including quantitative details and situation of Fixed
Assets.
b)The fixed assets have been physically verified by external agencies
during the year. In our opinion, frequency of verification is
reasonable having regard to the size of the Company and nature of its
business. No material discrepancies were noticed on such verification.
c) In our opinion and according to information and explanations given
to us and on the basis of an examination of the records of the Company,
the title deeds of immovable properties are held in the name of the
Company except:
No. of Cases Gross Block Net Block Remarks
Leasehold Land 12 49.57 42.39 -
Freehold Land 36 212.60 212.60 -
Buildings 28 7.27 2.64 Flats in
Mumbai
(ii) The inventories have been physically verified by external agencies
during the year. In our opinion, frequency of verification is
reasonable having regard to the size of the Company and nature of its
business. No material discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us, the
Company has granted unsecured loans to wholly owned subsidiaries
covered in the register maintained under section 189 of the Companies
Act, 2013 (''''the Act'''').
a) The terms and conditions on which loans have been granted to the
borrower companies covered under section 189 of the Act are not, prima
facie, prejudicial to the interest of the company.
b) The schedule of repayment of principal and payment of interest has
been stipulated and the repayments and receipts are regular.
c) There are no overdue amounts of more than 90 days in respect of
loans granted to the companies listed in the register maintained under
section 189 of the Act.
(iv) In our opinion and according to information and explanation given
to us, the company has complied with provisions of section 185 and 186
of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit from the public
in accordance with the provisions of the sections 73 to 76 or any other
relevant provisions of the Act, and the rules framed thereunder.
Accordingly, paragraph 3(v) of the order is not applicable to the
Company.
(vi) We have broadly reviewed the cost records maintained by the
Company specified by the Central Government under sub section (1) of
section 148 of the Companies Act, 2013, in respect of Transmission &
Telecom Operations of the Company and we are of the opinion that prima
facie the prescribed records have been made and maintained. We have,
however, not made detailed examination of the cost records with a view
to determine whether they are accurate or complete.
(vii) a) According to the information and explanations given to us, the
Company is generally regular in depositing undisputed statutory dues
with appropriate authorities including Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise,
Value Added Tax, Cess and other statutory dues applicable to the
Company and that there are no undisputed statutory dues outstanding as
at 31st March, 2016 for a period of more than six months from the date
they became payable. As informed, provisions of the Employees State
Insurance Act are not applicable to the Company.
b) According to information and explanations given to us, there are no
disputed dues of Duty of Customs or Duty of Excise which have not been
deposited. However, following disputed demands of Income Tax or Sales
Tax or Service Tax or Value Added Tax or Cess dues have not been
deposited:
Name of the Nature of Amount* Period to which the
Statute dues (Rs.in
Crore) amount relates
Income Tax Act, 1961 Income Tax 10.23 2004-05, 2005-06,
2008-09,2009-10,
2010-11
Income Tax Act, 1961 Income Tax 10.86 2008-09, 2009-10,
2011-12,2012-13
Income Tax Act, 1961 Income Tax 8.74 2007-08 to 2014-15
Income Tax Act, 1961 Income Tax 1.15 2006-07,2007-08,
2008-09,2012-13,
2015-16
Finance Act, 1994 Service Tax 1.57 2003-04
Finance Act, 1994 Service Tax 1.89 2007-08,2008-09
J&K GST Act, 1962 Sales Tax 50.88 1995-96 to 2001-02
J&KGSTAct, 1962 Sales Tax 72.99 2002-03 to 2010-11
Punjab Vat Act, 2005 Entry Tax 9.64 2011-12 to 2013-14
Building and Other
Construction Workers Cess 3.85 2007-08
Welfare Cess
Act, 1996
Total 171.80
Name of the Statute Forum where dispute is pending
Income Tax Act, 1961 ITAT, Delhi
Income Tax Act, 1961 CIT(A)Delhi
Income Tax Act, 1961 Jurisdictional Assessing Officers of TANs
Income Tax Act, 1961 Jurisdictional Assessing Officer, Delhi
Finance Act, 1994 CESTAT, Kolkata
Finance Act, 1994 Commissioner (Central Excise), Bhubaneswar
J&K GST Act, 1962 Sales Tax Appellate Tribunal, J&K
J&K GST Act, 1962 Dy. Commissioner of Sales Tax (appeals)
Jammu, J&K
Punjab Vat Act, 2005 Hon''''able High Court Punjab & Haryana,
Building and other
Construction Workers Hon''''able High Court, Himachal Pradesh,
Welfare Cess Act, 1996 Shimla
* Demand amount including interest, net of amount paid under protest.
(viii) In our opinion and according to the information and explanations
given to us the Company has not defaulted during the year in repayment
of loans to its financial institutions, bankers and dues to the Bond
holders.
(ix) In our opinion on an overall basis and according to the
information and explanations given to us, the Company has applied the
term loans including funds raised through bonds for the purpose they
were obtained. The Company has raised funds by issuance of debt
instruments (bonds) during the year. The Company has not raised money
by way of initial public offer or further public offer during the year.
(x) According to the information and explanations given to us and as
represented by the management, we have been informed that no case of
frauds has been committed on or by the Company during the year.
(xi) According to the information and explanations given to us
managerial remuneration has been paid or provided in accordance with
the requisite approval mandated by the provisions of section 197 read
with schedule V to the Act.
(xii) The Company is not a Nidhi Company as prescribed under section
406 of the Act. Accordingly, paragraph 3(xii) of the order is not
applicable to the Company.
(xiii) According to the information and explanations given to us and as
represented by the management, all transactions with the related
parties are in compliance with sections 177 and 188 of the Act, where
applicable and the details have been disclosed in the financial
statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not made any preferential allotment or private placement of shares or
fully or party convertible debentures during the year.
(xv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into non-cash transactions with directors or persons
connected with them.
(xvi) According to the information and explanations given to us the
Company is not required to be registered under section 45 IA of the
Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) is not
applicable to the Company.
For S.K. Mittal
& Co. For Parakh &
Co. For Kothari
& Co. For R.G.N.Price
& Co.
Chartered
Accountants Chartered
Accountants Chartered
Accountants Chartered
Accountants
Firm Regn No.
001135N Firm Regn No.
001475C Firm Regn No.
301178E Firm Regn No.
002785S
(CA. M.K.
Juneja) (CA Indra Pal
Singh) (CA.Manaswy
Kothari) (CA. R.Rangarajan)
Partner Partner Partner Partner
M.No. 013117 M.No. 410433 M.No. 064601 M.No. 041883
Place: New Delhi
Date: 26th May, 2016
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
Power Grid Corporation of India Limited ("the Company"), which comprise
the Balance Sheet as at 31st March, 2015, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s 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 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.
Auditors'' Responsibility
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 the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give 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 Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
i) The company has not made any adjustment in respect of revenue of Rs.
144.91 crore recognized for the period 01.07.2010 to 31.08.2011 in
respect of Barh-Balia Transmission line, wherein company appeal is
pending with Hon''ble Supreme Court against the order of Appellate
Tribunal for Electricity (ATE) to re-determine the Date of Commercial
Operation (DOCO) refer note 2.38. Pending decision of Hon''ble Supreme
Court, and determination of DOCO by CERC and in view of uncertainty
involved, in our opinion, provision should have been made for the
revenue recognized for the period under dispute. This has resulted in
increase of Profit before tax for the year by Rs. 109.70 crore and
increase in Current Assets by Rs. 109.70 crore.
ii) The Company has not made any provision in respect of outstanding
dues of Rs. 15.64 crore from one of the medium term open access
customers, which is under liquidation, under an order of the Hon''ble
High Court at Calcutta, refer note 2.39. Moreover, no favourable order
has been received in respect of Company''s petition before the Central
Electricity Regulatory Commission for allowing the recovery of such
dues from other beneficiaries. As the recovery of such dues is
doubtful,in our opinion, the provision should have been made in the
accounts. This has resulted in increase of Profit before tax for the
year by Rs. 11.84 crore and increase in Current Assets by Rs. 11.84
crore.
iii) Furthermore, as a result of non-provisions mentioned in our
qualification Nos. i) and ii) stated above, there are impact on various
heads in the financial statements, the aggregate impact of all the
above is as under:
Sl. Particulars Increase Decrease
(Rs. Crore) (Rs. Crore)
1 Revenue from operation 37.45
2 Employee Benefit Expenses 1.56
3 Transmission, administration and
other expenses 160.55
4 Profit Before Tax 121.54
5 Tax Expenses 8.15
6 Profit After Tax 129.69
7 Reserves & Surplus and Shareholders''
Fund 129.69
8 Short-term Provisions 5.75
9 Capital work in progress 0.84
10 Trade Receivable 160.55
11 Other Current Assets 37.45
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2015;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date;
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date. Emphasis of Matter
We draw attention to Note No. 2.25(b) to the financial statements, in
respect of provisional recognition of revenue from transmission
charges. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of sub-
section (11) of Section 143 of the Act, we give in the Annexure''l''a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. In terms of sub section (5) of section 143 of the Companies Act,
2013, we give in the Annexure ''2'' a statement on the directions issued
under the aforesaid section by the 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
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. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e. The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may not have an adverse effect on the
functioning of the Company.
f. On the basis of written representations received from the directors
as on 31st March, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2015, from
being appointed as a director in terms of Section 164(2) of the Act.
g. The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
h. With respect to the other matters to be included in the Auditor''s
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 2.38, 2.39
and 2.52 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 has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure ''1'' referred to in our Independent Auditors'' Report to the
members of the Power Grid Corporation of India Limited, on the
standalone financial statements for the year ended 31st March, 2015, we
report that:
(i) a) The Company has generally maintained records, showing full
particulars including quantitative details and situation of Fixed
Assets.
b) The fixed assets have been physically verified by external agencies
during the year and discrepancies, though not material, noticed on such
verification have been reconciled/ adjusted in the books of account. In
our opinion, frequency of verification is reasonable having regard to
the size of the Company and nature of its assets.
(ii) a) Physical verification of inventories has generally been
conducted on periodic intervals. In our opinion system and frequency of
verification is reasonable.
b) In our opinion, the procedures of physical verification of
inventories, followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion, the Company has maintained proper records of its
inventory. The discrepancies noticed on physical verification of the
inventories, though not material, have been properly dealt with in the
books of account.
(iii) During the year the Company has granted unsecured loans amounting
to Rs. 229.70 crore to two wholly owned subsidiaries covered in the
register maintained under section 189 of the Companies Act, 2013 (''the
Act''). Outstanding balance as on 31st March 2015 is Rs. 229.70 crore.
a) Principal amount and interest are not yet due as per the terms of
the loans.
b) Since receipt of principal amount and interest are not due, question
of overdue amount of more than rupee one lakh does not arise.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems, commensurate
with the size of the Company and the nature of its business, with
regard to purchase of inventory and fixed assets and income from sales
of goods and services. During the course of our audit we have not
observed any continuing failure to correct major weaknesses in the
underlying internal control systems. However process of contract
closing work needs to be expedited.
(v) Since the Company has not accepted any deposit from public, the
question of compliance with the directives issued by the Reserve Bank
of India and the provisions of Section 73 to 76 or other relevant
provisions of the Companies Act, 2013, and rules framed there under,
does not arise.
(vi) We have broadly reviewed the cost records maintained by the
company specified by the Central Government under sub section (1) of
Section 148 of the Companies Act, 2013, in respect of Transmission &
Telecom Operations of the Company and we are of the opinion that prima
facie the prescribed records have been made and maintained. We have,
however, not made detailed examination of the cost records with a view
to determine whether they are accurate or complete.
(vii) a) According to the information and explanations given to us, the
Company is regular in depositing undisputed statutory dues with
appropriate authorities including Provident Fund, Income Tax, Sales
Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value
Added Tax, Cess and other statutory dues applicable to the Company and
that there are no undisputed statutory dues outstanding as at 31st
March, 2015 for a period of more than six months from the date they
became payable. As informed, provisions of the Employees State
Insurance Act are not applicable to the Company.
b) According to information and explanations given to us, there are no
disputed dues of Wealth Tax or Duty of Customs or Duty of Excise which
have not been deposited. However, following disputed demands of Income
Tax or Sales Tax or Service Tax or Value Added Tax or Cess dues have
not been deposited:
Name of the Statute Nature of Amount* Period to which the
amount
dues (Rs. in
Crore) relates
Income Tax Act, 1961 Income Tax 15.49 2004-05, 2005-06,
2007-08, 2008-09,
2009-10, 2010-11
Income Tax Act, 1961 Income Tax 0.08 2005-06, 2007-08
Income Tax Act, 1961 Income Tax 9.49 2008-09, 2009-10,
2011-12
Finance Act, 1994 Service Tax 1.57 2003-04
Finance Act, 1994 Service Tax 1.89 2007-08, 2008-09
J&K GST Act, 1962 Sales Tax 50.71 1995-96 to 2001-02
J&K GST Act, 1962 Sales Tax 57.75 2002-03 to 2009-10
Punjab Vat Act, 2005 Entry Tax 9.64 2011-12 to 2013-14
MP Entry Tax Act, 1976 Entry Tax 20.67 2011-12, 2014-15
Building and Other Cess 3.46 2007-08
Construction Workers
Welfare Cess Act, 1996
Total 170.75
Name of the Statute Forum where dispute is pending
Income Tax Act, 1961 ITAT, Delhi
Income Tax Act, 1961 DCIT, Delhi
Income Tax Act, 1961 CIT (A) Delhi
Finance Act, 1994 CESTAT, Kolkata
Finance Act, 1994 Commissioner (Central Excise),
Bhubaneswar
J&K GST Act, 1962 Sales Tax Appellate Tribunal, J&K
J&K GST Act, 1962 Dy. Commissioner of Sales Tax
(appeals) Jammu, J&K
Punjab Vat Act, 2005 Hon''ble High Court Punjab & Haryana
MP Entry Tax Act, 1976 Hon''ble High Court M.P., Jabalpur
Building and other
Construction workers welfare
Cess Act, 1996 Hon''ble High Court, Himachal Pradesh,
Shimla
* Demand amount including interest, net of amount paid under protest.
c) According to the information and explanations given to us, the
amount which was required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
(viii) The Company does not have accumulated losses at the end of
financial year and has not incurred any cash loss in the financial year
under audit, and also in the immediately preceding financial year.
(ix) On the basis of audit procedures adopted by us and according to
the records, the Company has not defaulted in repayment of dues to any
financial institution or bank or bondholders.
(x) 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.
(xi) In our opinion on an overall basis and according to the
information and explanations given to us, the company has applied the
term loans for the purpose they were obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
Annexure ''2'' referred to in our Independent Auditors'' Report to the
members of Power Grid Corporation of India Limited, on the standalone
financial statements for the year ended 31st March, 2015.
On the directions issued by the Comptroller and Auditor General of
India under sub section (5) of Section 143 of the Companies Act, 2013,
based on the verification of records of the Company and information and
explanations given to us, we report that:
a) The Company has not been selected for disinvestment during the year.
b) There is no case of waiver/write off of loans/ interest, however non
recoverable advances of Rs. 0.56 crore and bad debts Rs. 14.06 crore,
against which provisions were made in earlier years have been written
off during the year, on account of normal business practice.
c) The Company has maintained adequate records in respect of
inventories lying with third parties. No assets have been received by
the Company as gift from Government or other authorities.
d) Age wise analysis of pending legal/arbitration cases as provided by
the management, are as under:
Sl. Category Number of Number Number
No Cases prior of Cases of Cases
to year 2000 between between
2000-2005 2005-2010
1 Land acquisition 12 6 26
2 Tree & crop Compensation 56 126 1036
3 Arbitration 6 7 16
4 Contractual 0 0 2
5 Tax related 1 2 2
6 Civil Misc 10 10 21
Total 85 151 1103
Category Number Total Total Amount
of Cases Number of (Rs. in Crore)
between Cases
2010-2015
Land acquisition 133 177 1983.10
Tree & Crop Compensation 1494 2712 1311.70
Arbitration 22 51 267.00
Contractual 0 2 132.00
Tax related 3 8 296.60
Civil Misc 216 257 86.00
Total 1868 3207 4076.40
As per information and explanations given, in view of the size and
nature of its business, the company is having large number of legal /
arbitration cases including Tree & Crop compensation and Land
Acquisition cases.
Pendency is mainly due to legal process of the Courts/Arbitrators.
In our opinion the Company has in place an adequate monitoring
mechanism for expenditure on such legal cases.
For S.K.MEHTA & CO. For CHATTERJEE & CO. For SAGAR & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Registration
No.000478N Firm Registration
No. 302114E Firm Registration
No. 003510S
(CA Puneet Harjai) (CA S.K.Chatterjee) (CA D. Manohar)
Partner Partner Partner
Membership No.095715 Membership No.003124 Membership No.029644
Place of Signature: New Delhi
Date: 30th May, 2015
