To the Members of
HPL ELECTRIC & POWER LTD.
Report on the Financial Statements
We have audited the accompanying financial statement of HPL ELECTRIC & POWERLTD. ('the Company') which comprise the balance sheet as at march 31 2016 statementof Profit and loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including Accounting Standards specified under Section 133 ofthe Act as applicable. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriateaccounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operatingeffectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the rules made thereunderand the Order under section 143(11) ofthe Act.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the disclosuresin the financial statements. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch2016 and its Profit for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 bestof 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 theCompany so far as it appears from our examination of those books;
c) the Balance Sheet and Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) on the basis of written representations received from the directors as on 31stMarch2016 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31stMarch 2016 from being appointed as a director in terms of section164(2) of the Act; and
f) with respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure A"; and
g) with respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations_giyn to us:
i. The company has disclosed the impact of pending litigation on its financialstatements.
ii. The company did not have any long term contract including derivative contract forwhich there were any material foreseeable losses.
iii. There was no amount which was required to be transferred to the Investor Educationand Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016('the Order') issued bythe Central Government of India in term of Sub-Section (11) of Section 143 of the Act wegiven in 'Annexure B' a statement on the matters specified on paragraph 3 and 4 of theOrder.
| ||For SAHNI MEHRA & CO. |
| ||Chartered Accountants |
| ||(Registration No. 000609N) |
| ||( Ra m estuSeffm ) |
| ||(Proprietor) |
|Place: New Delhi ||Membership No. : 009246 |
|Date: || |
ANNEXURE 'A' TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act')
We have audited the internal financial controls over financial reporting of HPLELECTRIC & POWER LTD. ('the Company')as of March 31 2016in conjunction with ouraudit of the financial statement of the company for the year then ended and as on thatdate.
Management's Responsibility for the Internal Financial Controls
The company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components on internal control statedin the Guidance Note on Audit of Internal Financial Controls Over financial Reportingissued by the Institute of Chartered Accountants of India (the 'Guidance Note'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Notes to the extant applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note required that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reportingand their operatingeffectiveness. Our audit of internal financial controls over financial reportingincludedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend of the auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statement whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A company's internal financial controls over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statement inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisation of themanagement and directors of the company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls OverFinancial Reporting
Because of the inherent limitation of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of change in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal financial controls over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.
| ||ForSAHNI MEHRA & CO. |
| ||Chartered Accountants |
| ||(Registration No. 000609^1} |
| ||( RarpesfrSa h n i) |
|Place: New Delhi ||(Proprietor) |
|Date: ||Membership No. : 009246 |
ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT
Report on Companies (Auditor's Report) Order 2016 ('the Order') issued
by the Central Government in terms ofSection 143(11) of the Companies
Act 2013 ('the Act') of HPL ELECTRIC & POWER LTD. ('the Company)
(1) In respect of the Company's fixed assets:
a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets were physically verifiedduring the year by the Management inaccordancewith a regular programme of verification which on our opinion providesphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
C) According to the information and explanations given to us and the records examinedby us and based on the examination of the conveyance deed provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.
(2) As explained to us the inventories were physical verifiedduring the year by themanagement at reasonable intervals and no material discrepancies were noticed on suchverification.
(3) The Company has not granted any loans secured or unsecured to companies firmlimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.
(4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
(5) The company has not accepted any deposits during the year and does not have anyunclaimed deposits as at march 31 2016 and therefore the provision of the clause 3(v) ofthe Order are not applicable to the Company.
(6) We have broadly reviewed the books of accounts maintained by the company in respectof the products where pursuant to the rules made by the Central Government of India themaintenance of cost records have been prescribed under sub-section (1) of Section 148 ofthe Act and are of the opinion that prima-facie the prescribed accounts and records havebeen made and maintained.
(7) According to the information and explanations given to us in respect of statutorydues:
The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxValue Added Tax duty of Custom duty of Excise Cess and other material statutory duesapplicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales tax Service Tax Value Added Tax duty of Customsduty of Excise Cess and other material statutory dues in arrear as at March 31 2016 fora period of more than six months from the date they became payable.
(c) According to the information and explanations given to us by the management
and records of the Company examined by us the particulars of dues of Income Tax SalesTax Service Tax and Excise Duty as at 31stMarch 2016 which have not been deposited onaccount of dispute are given below:
|Name of the statute ||Nature of dues ||Financial year to which the matter pertains ||Forum where the Dispute is pending ||Amount (Rs. in lacs) |
|Service Tax ||ServiceTax ||2007-2008 to 2010-2011 ||CESTAT New Delhi. ||22.83 |
|Service Tax ||Service Tax ||2008-09 ||CESTAT New Delhi. ||132.59 |
|Central ExciseAct 1944 ||ExciseDuty ||2007-2008 ||CESTAT New Delhi. ||10.40 |
|CentralExciseAct 1944 ||ExciseDuty ||2007-2008 ||CESTAT New Delhi. ||45.37 |
|CentralExciseAct1944 ||ExciseDuty ||2008-2009 ||Addl. Comm LTU New Delhi. ||16.40 |
|ServiceTax ||ServiceTax ||2012-2013 to 2014-15 ||Comm. (A) LTU Delhi ||3.64 |
|HaryanaVAT2003 ||SalesTax ||2008-2009 ||Haryana Tax Tribunal Chandigarh. ||25.51 |
|HaryanaVAT2003 ||SalesTax ||2011-2012 ||Jt.Comm.(A) Ambala ||4.38 |
|HaryanaVAT2003 ||SalesTax ||2010-2011 ||Jt.Comm.(A)Rohtak. ||17.82 |
|HaryanaVAT ||SalesTax ||2009-2010 ||Haryana Tax Tribunal Chandigarh. ||4.78 |
|Service Tax ||Service Tax ||2011-2012 ||CESTAT New Delhi. ||1.13 |
|HaryanaVAT ||Sales Tax ||2011-2012 ||Haryana Tax Tribunal Rohtak. ||18.45 |
|HaryanaVAT ||SalesTax ||2011-2012 ||Haryana Tax Tribunal Sonepat. ||23.19 |
(8) In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of loan or borrowing to banks. The Company does nothave any loans or borrowing from financial institutions or government and has not issuedany debentures.
(9) The Companies has not raised money by way of initial public offer or further publicoffer (including debts instruments) or term loans and hence reporting under clause 3(ix)ofthe Order is not applicable.
(10) To the best of our knowledge and according to the information and explanations tous no fraud by the Company and no fraud on the Company by its officers or employees hasbeen noticed or reported during the year.
(11) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provision of Section 197 read with Schedule V to the Act.
(12) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.
(13) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.
(14) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debenture and hence reporting underclause 3(XIV) of the Order is not applicable to the Company.
(15) In our opinion and according to the information and explanations given to usduringthe year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theact are not applicable.
(16) The Company is not required to be registered under Section 45-1 of the ReserveBank of India Act 1934.
| ||For SAHNI MEHRA & CO. |
| ||Chartered Accountants |
| ||(Registration No. 000609WT |
| ||(Ramesh Sahni) |
|Date : ||(Proprietor) |
|Place: ||Membership No. : 009246 |