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Power Grid Corporation of India

BSE: 532898|NSE: POWERGRID|ISIN: INE752E01010|SECTOR: Power - Generation & Distribution
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« Mar 15
Auditor's Report (Power Grid Corporation of India) Year End : Mar '16
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
Source : Dion Global Solutions Limited
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