We have audited the attached Balance Sheet of SJVN Limited (formerly
 Satluj Jal Vidyut Nigam Limited) as at 31 st March 2011, and the Profit
 & Loss Account and also the Cash Flow Statement of the company for the
 year ended on that date annexed thereto.  These financial statements
 are the responsibility of the company''s management. Our responsibility
 is to express an opinion on these financial statements based on our
 audit,
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. Those standards require that we plan and perform the
 audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit includes assessing
 the accounting principles used and significant estimates made by
 management, as we 11 as eva I uati ng the ove ra 11 fi nanci al stateme
 nt presentation.  We believe that our audit provides a reasonable basis
 for our opinion.
 
 1) As required by the Companies (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of section 227 (4A)
 of the Companies Act, 1956, and on the basis of such examination of the
 books and records of the Company as we considered appropriate and the
 information and explanations given during the course of audit, we
 enclose in the Annexure a statement on the matters specified in
 Paragraphs 4 and 5 of the said Order.
 
 2) As the Electricity Act, 2003, governs the Company, the provisions of
 the said Act read with rules there under have prevailed wherever the
 same have been inconsistent with the provisions of the Companies Act,
 1956.
 
 3) We report that
 
 a) We have obtained all the information and explanations, wh i c h to
 the best of ou r know I edge and bel ief were necessary for the
 purposes of our audit.
 
 b) I n ou r opi n i on, proper boo ks of accou nt, as req u i red by
 law, have been kept by the Company so far as appears from our
 examination of those books.
 
 c) The Balance Sheet Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account
 
 d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) In terms of Department of Company Affairs GSR 829 (E) dated 21st
 October 2003, Government Companies are exempt from applicability of
 provisions of Section 274 (1) (g) of the Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with
 Significant Accounting Policies and Notes on Accounts, give the
 information required by the Companies Act, 1956, in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:-
 
 i) in the case of Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2011;
 
 ii) in case of Profit & Loss Account, of the profit for the year ended
 on that date; and
 
 iii) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE
 ACCOUNTS OF SJVN LIMITED FOR THE YEAR ENDED 31st MARCH, 2011
 
 (a) The company has generally maintained proper records showing full
 particulars, including quantitative details and situation of its fixed
 assets.
 
 (b) As per the information and explanations given to us, fixed assets
 are physically verified by the management during the year, which in our
 opinion, is reasonable having regard to the size of the company and the
 nature of its assets. The discrepancies noticed on such verification
 were not material.
 
 (c) Since there is no disposal of a substantial part of fixed assets
 during the year, in our opinion, the going concern status of the
 company is not affected.
 
 (ii)(a) The inventory of the company consisting of stores and spare
 parts has been physically verified by the management at reasonable
 intervals.
 
 (b) The procedures of physical verification of inventories followed by
 the management are generally reasonable and adequate in relation to the
 size of the company and th e n atu re of its busi ness.
 
 (c) The company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventories, wherever
 material, have been properly dealt with in the books of accounts.
 
 (iii)(a) 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
 301 ofthe Companies Act, 1956.
 
 (b) Not applicable in view of para (a) above.
 
 (c) Not applicable in view of para (a) above.
 
 (d) Not applicable in view of para (a) above.
 
 (e) The company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (f) Not appl icable in view of para (e) above.
 
 (g) Not appl icable in view of para (e) above.
 
 (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 the purchase of stores and spare parts, fixed assets and for the
 sale of the power & services.  There is no major weakness in internal
 control systems.
 
 (v)(a) According to the information and explanations given to us, we
 are of the opin ion that there are no contracts or arrangements that
 need to be entered i nto the regi ster mai ntai ned u nder section 3 01
 of the Companies Act, 1956.
 
 (b) Not appl icable in view of para (a) above.
 
 (vi) The company has not accepted any deposits from the public in terms
 of section 58A and 58AA and other relevant provisions of the Companies
 Act, 1956.
 
 (vii) In our opinion, the company has an internal audit system, which
 is generally commensurate with the size and nature of its business.
 However, we are of the views that follow up of the reports, including
 compliance, needs to be improved.
 
 (viii) In our opinion and as informed to us, the company has maintained
 cost records as required under Section 209 (1) (d) of the Companies
 Act, 1956. We have not, however, made detailed examination of the
 records with a view to determine whether they are accurate and
 complete.
 
 (ix)(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, cess
 and other material statutory dues applicable to it. 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, cess and other material statutory dues that have not been
 deposited on account of any dispute aregiven below:
 
 Name of the      Nature of      Amount            Forum where
 Statute          the Dues     (Rs. in Lakh)     dispute is pending
 
 The Central       Excise Duty     1.00               CESTAT
 Excise Act, 1944  Penalty
 
 Finance Act, 1994 Service Tax  1236.00           Commissioner
                                                  Excise & Service
                                                  Tax, Chandigarh
 
 (x) The company has neither accumulated lossesasattheendofthe financial
 year nor has incurred any cash losses during the financial year covered
 by our audit and also in the immediately preceding financial year.
 
 (xi) The company has not defaulted in repayment of dues to financial
 institution or banks. The company has not issued any debentures.
 
 (xii) The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the company is not a chit fund or a nidhi/mutual
 benefit fund/society.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the company is not dealing in shares, securities and other
 investments.
 
 (xv) The company has not given any guarantee for loans taken by others
 from banks or financial institutions.
 
 (xvi) The terms loans were applied for the purpose of which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 overall examination of the balance sheet of the company, we report that
 no funds raised on short-term basis have been used for long-term
 investment
 
 (xviii)The company has made preferential allotment of 2,78,12,500
 equity shares of 7 10 each, at a premium of 7 4.72 per share to Govt of
 H imachal Pradesh du ring the year. I n our view, the terms and
 conditions of aforesaid allotment are not prejudicial to the interest
 of the company,
 
 (xix) The company has not issued any debentures during the year.
 
 (xx) As the company has not raised money by public issues during the
 year, this clause is not applicable.
 
 (xxi) As per the information and explanations given to us, no fraud on
 or by the company has been noticed or reported during the year.
 
 
                                               For Hingorani M. & Co.
 
                                               Chartered Accountants
 
                                       Firm Registration No. 006772N
 
                                                      (Pardeep Kumar)
 
 Place: New Delhi                                            Partner
 
 Date : 30.05.2011                                      M.No. 085630