To the Members of HPL Electric & Power Ltd.
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the financial statements of HPL ELECTRIC & POWERLIMITED ("the Company") which comprise the balance sheet as at 31st March 2022and the standalone statement of Profit and Loss (including other comprehensive income)standalone statement of Changes in Equity and standalone statement of Cash Flows for theyear then ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2022 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
| The key audit matters | How the matter was addressed in our audit |
| Inventory valuation | Our audit procedures over inventory valuation included the following: |
| • Copper and plastic components based inventory for which the Company enters into supply contracts. The Company takes a structured approach to the identification and quantification of copper and plastic components. | • We tested the design implementation and operating effectiveness of key internal financial controls including controls over valuation of inventory and accounting. |
| • Inventories are measured at cost or net realizable value which ever is lower on first in first out basis. | • On a sample basis tested the accuracy of cost for inventory be verifying the actual purchase cost. Tested the net realizable value by comparing actual cost with most recent retail price; |
| We focused on this area because of its size the assumptions used in the valuation and the complexity which are relevant when determining the amounts recorded. | • We assessed and tested adequacy and completeness of the Company's disclosure in the standalone financial statements. |
Other Information
The company's management and Board of Directors are responsible for theother information. The other information comprises the information included in thecompany's annual report but does not include the standalone financial statements and ourauditors' report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Boards of Directors are also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020("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 A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
(A) As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss (including the Standalone Statement of Other Comprehensive Income) the StandaloneCash Flow Statement and Standalone Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
e) On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in 'Annexure B'
(B) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed pending litigations and the impact on itsfinancial position - refer note 44 to the Standalone Financial Statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv. The dividend declared and paid during the year by the Company is incompliance with Section 123 of the Act.
v. (a) The management has represented that to the best of itsknowledge and belief as disclosed in the notes to accounts no funds have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources ofkind of funds) by the Company to or in any other person or entity including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany("Ultimate Beneficiaries") or provide any guarantee security or the likeon behalf of the Ultimate Beneficiaries;
vi. (b) The management has represented that to the best of itsknowledge and belief as disclosed in the notes to accounts no funds have been receivedby the Company from any person or entity including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries and
(c) Based on such audit procedures that we considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.
(C) With respect to the matter to be included in the Auditors' Reportunder section 197(16):
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.
Annexure A to Independent Auditors' Report
Referred to in paragraph (report on Other Legal and Regulatoryrequirements) of the Independent Auditors' Report of even date to the members of HPLElectric & Power Limited on the standalone financial statements as of and for the yearended March 312022.
i. (a) (A) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.
(B) The Company is maintaining proper records showing full particularsof Intangible Assets.
(b) The Property Plant and Equipment of the Company have beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification. In our opinion the frequency of verification isreasonable.
(c) The title deeds of all the immovable properties (other thanproperties where the Company is the lessee and the lease agreements are duly executed infavor of the lessee) as disclosed in Note 3 of the standalone financial statements areheld in the name of the Company
(d) The Company has not revalued its Property Plant and Equipment(including Right of Use assets) or intangible assets or both during the year.Consequently the question of our commenting on whether the revaluation is based on thevaluation by a Registered Valuer or specifying the amount of change if the change is 10%or more in the aggregate of the net carrying value of each class of Property Plant andEquipment (including Right of Use assets) or intangible assets does or arise.
(e) Based on the information and explanations furnished to us noproceedings have been initiated or are pending against the Company for holding Benamiproperty under the Prohibition of Benami Property Transactions Act 1988 (as amended in2016) formerly the Benami Transactions (Prohibition) Act 1988(45 of 1988) and Rules madethereunder and therefore the question of our commenting on whether the company hasappropriately disclosed the details in its financial statement does not arise.
ii. (a) The physical verification of inventory has been conducted atreasonable intervals by the Management during the year and in our opinion the coverageand procedure of such verifications by Management is appropriate. In respect of inventorylying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification on inventory as compared to book recordwere not 10% or more in aggregate for each class of inventory.
(b) During the year the Company has been sanctioned working capitallimits in excess of Rs. 5 crores in aggregate from banks on the basis of security ofcurrent assets. The company has filed quarterly returns or statements with such bankswhich are in agreement with the unaudited books of account.
iii. The company has not made investments in any other company duringthe year. The Company has not granted secured/unsecured loans/advanced in nature of loansor stood guarantee or provided security to any parties. Therefore the reporting underclauses 3(iii)(a) (iii)(c) (iii)
(d)(iii)(e) and (iii)(f) or the Order are not applicable to thecompany.
iv. The Company has not granted any loans or provided any guaranteesor security to the parties covered under Section 185 of the Act. Further in our opinionand according to the information and explanations given to us the Company has compliedwith the provisions of section 186 of the Companies Act 2013 in respect of theinvestments made by it and the Company has not provided any loans guarantees of securityto the parties covered under Section 186 of the Act.
v. The Company has not accepted any deposits or amounts which aredeemed to be deposits within the meaning of Section 737475 and 76 of the Act and theRules framed there under to the extent notified.
vi. Pursuant to the rules made by the central Government of India theCompany is required to maintain cost records as specified under section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.
vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is regular indepositing the undisputed statutory dues including goods and services tax providentfunds employees' state insurance income tax duty of customs cess and other materialstatutory dues as applicable with the appropriate authorities.
(b) According to the information and Explanations given to us and therecords of the Company examined by us there are no statutory dues of provident fundemployees' state insurance and cess which have not been deposited on account of anydispute. The Particulars of the statutory dues referred to in sub- clause(a) as at March31 2022 which have not been deposited on account of a dispute are as follows.
| S. Name of Statute No | Description | As at 31st March 2022 | As at 31st March 2021 |
| 1 Central Excise Act 1944 | Demand for Excise Duty before Add. Comm. LTU New Delhi for 2008-09 | 16.40 | 16.40 |
| 2 Central Excise Act 1944 | Demand for Excise Duty before Comm. (A) New Delhi for 2009-10 to 2015-16. | 82.49 | 82.49 |
| 3 Finance Act 1994 | Demand for Service Tax Credit before Commissioner Appeal LTU Delhi for 2012-13 | 1.01 | 1.01 |
| 4 Finance Act 1994 | Demand for Cenvat Credit before Commissioner Appeal LTU Delhi for 2011-12 | 1.13 | 1.13 |
| 5 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Chandigarh for 2008-09 | 25.51 | 25.51 |
| 6 Haryana Vat Act 2003 | Demand for Sales Tax before Joint Comm. (Appeal) Rohtak for 2010-11 | 17.83 | 17.83 |
| 7 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Chandigarh for 2009-10 | 4.78 | 4.78 |
| 8 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2011-12 | 18.45 | 18.45 |
| 9 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2012-13 | 10.06 | 10.06 |
| 10 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2010-11 | 49.22 | 49.22 |
| 11 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Chandigarh for 2011-12 | 23.19 | 23.19 |
| 12 Haryana Vat Act 2003 | Demand for Sales Tax before Joint Comm. (Appeal) Ambala for 2011-12 | 4.38 | 4.38 |
| 13 Finance Act 1994 | Show cause notice received towards short payment of Service Tax for 2010-11 to 2014-15 | 163.04 | 163.04 |
| 14 Employee's Provident Fund Act 1952 | Demand for EPF before EPF appellate Tribunal New Delhi. | 8.87 | 8.87 |
| 15 Haryana Vat Act 2003 | Demand for sales tax before Haryana Tax Tribunal for 2011-12 | 23.39 | 23.39 |
| 16 Haryana Vat Act 2003 | Demand for sales tax before Haryana Tax Tribunal for 2012-13 | 23.67 | 23.67 |
| 17 Haryana Vat Act 2003 | Demand for sales tax before Haryana Tax Tribunal for 2013-14 | 80.59 | 80.59 |
| 18 Haryana Vat Act 2003 | Demand for sales tax before Jt. Commissioner (A) Rohtak for 2013-14 | 72.95 | 72.95 |
| 19 Haryana Vat Act 2003 | Demand for sales tax before Jt. Commissioner (A) Rohtak for 2014-15 | 25.35 | 25.35 |
| 20 Haryana Vat Act 2003 | Demand for sales tax before Jt. Commissioner (A) Rohtak for 2013-14 | 18.38 | 18.38 |
| 21 Haryana Vat Act 2003 | Demand for sales tax before Jt. Commissioner (A) Rohtak for 2013-14 | 97.68 | 97.68 |
| 22 Haryana Vat Act 2003 | Haryana Tax Tribunal Chandigarh-Final demand after Rectification on 31.07.2017 (Revision Pending) | 3.61 | 3.61 |
| 23 Haryana Vat Act 2003 | Haryana Tax Tribunal Chandigarh-Pending for Rectification for 2012-13 | 1.97 | 1.97 |
| 24 Haryana Vat Act 2003 | Haryana Tax Tribunal Chandigarh-Pending for Rectification for 2013-14 | 3.73 | 3.73 |
| 25 Haryana Vat Act 2003 | Haryana Tax Tribunal Chandigarh-Pending for Rectification for 2014-15 | 0.52 | 0.52 |
| 26 Haryana Vat Act 2003 | Haryana Tax Tribunal-Rohtak-Appeal pending before the Jt. ETC(A) Rohtak for 2010-11 | 33.95 | 33.95 |
| 27 Haryana Vat Act 2003 | Demand for sales tax before Dy. Excise & Taxation Commissioner (ST)Sonepat for 2014-15 | 10.14 | 10.14 |
| 28 Haryana Vat Act 2003 | Demand for sales tax before Jt Excise & Taxation Commissioner Ambala for 2014-15 | 55.74 | 55.74 |
| 29 Income Tax Act 1961 | Income Tax demand before Asstt. Commissioner of Income Tax Delhi for AY-2017-18 | 28.72 | 28.72 |
| 30 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2015-16 | 41.89 | 41.89 |
| 31 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2014-15 | 97.13 | 97.13 |
| 32 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2015-16 | 75.76 | 75.76 |
| 33 Central Excise Act 1944 | Demand for Excise Duty before Deputy Comm. Central GST Gurgram for 2016-17. | 1.72 | 1.72 |
| 34 Finance Act 1994 | Demand for Service Tax Credit before Asstt. Commissioner Gurugram for 2015-16 to 2017-18 | 14.78 | 14.78 |
| 35 Custom Act1962 | Demand for Custom Duty before Adl./Joint Comm./ Customs Gr-VAACC Import New Custom House New Delhi for 2018-19 | 22.67 | 22.67 |
| 36 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2016-17 | 73.54 | 73.54 |
| 37 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2016-17 | 37.23 | 37.23 |
| 38 Haryana Vat Act 2003 | Demand for Sales Tax before Haryana Tax Tribunal Rohtak for 2017-18 | 68.87 | - |
viii. According to the information and explanations given to us and therecords of the Company examined by us there are no transactions in the books of accountthat has been surrendered or disclosed as income during the year in the tax assessmentsunder the Income Tax Act 1961 that has not been recorded in the books of account.
ix. (a) According to the records of the Company examined by us and theinformation and explanations given to us the Company has not defaulted in repayment ofloans or other borrowings or in the payment of interest to any lender during the year.
(b) According to the information and explanations given to us and onthe basis of audit procedures we report that the Company has not been declared WillfulDefaulter by any bank or financial institution or government or any government authority.
(c) In our opinion and according to the information and explanationsgiven to us the term loans taken during the year have been applied for the purposes forwhich they were obtained.
(d) According to the information and explanations given to us and theprocedures performed by us and on an overall examination of the financial statements ofthe Company we report that no funds raised on short - term basis have been used forlong-term purposes by the Company.
(e) According to the information and explanations given to us and onthe overall examinations of the financial statements of the Company we report that theCompany has not taken any funds from any entity or person on account of or to meet theobligations of its subsidiaries.
(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries.
x. (a) The company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) during the year. Accordinglythe reporting under clause 3(x)(a) of the order is not applicable to the company.
(b) The company has not made any preferential allotment or privateplacement of shares or fully or partially or optionally convertible debentures during theyear. Accordingly the reporting under clause 3(x)(b) of the order is not applicable tothe company.
xi. (a) During the course of our examination of the books and recordsof the company carried out in accordance with the generally accepted auditing practicesin India and according to the information and explanations given to us we have neithercome across any instance of material fraud by the company or on the company noticed orreported during the year nor have we been informed of any such case by the Management.
(b) During the course of our examination of the books and records ofthe company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us a report undersection 143(12) of the act in form ADT-4 as prescribed under rules 13 of companies( Auditand Auditors) rules 2014 was not required to be filled with the central governmentAccordingly the reporting under clause 3(xi)(b) of the order is not applicable to thecompany.
(c) During the course of our examination of the books and records ofthe company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us the company has notreceived any whistle - blower complaints during the year.
xii. As the company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the reporting under clause 3(xii) of the order is not applicableto the company.
xiii. The Company has entered into transactions with related parties incompliance with the provision of sections 177 and 188 of the Act. The details of suchrelated parities transaction have been disclosed in the stand alone financial statementsas required under Indian Accounting Standards 24 "Related Party Disclosures"specified under section 133 of the Act.
xiv. (a) In our opinion and according to the information andexplanation given to us the company has an internal audit system commensurate with thesize and nature of its business.
(b) The reports of the internal auditors for the period under audithave been considered by us.
xv. The company has not entered into any non - cash transactions withits directors or persons connected with him. Accordingly the reporting on compliance withthe provisions of section 192 of the act under clause 3(xv) of the order is notapplicable to the company.
xiv. (a). The company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Accordingly the reporting under clause3(xvi)(a) of the order is not applicable to the company.
(b) The company has not conducted non - banking financial / housingfinance activity during the year. Accordingly the reporting under clause 3(xvi)(b) of theorder is not applicable to the company.
(c) The Company is not a Core Investment Company (CIC) as defined inthe regulation made by the Reserve Bank of India. Accordingly the reporting under clause3(xvi) (c) of the Order is not applicable to the Company.
(d) Based on the information and explanation provided by the managementof the Company the Group does not have any CICs which are part of the Group. We havenot however separately evaluated whether the information provided by the management isaccurate and complete. Accordingly the reporting under clause 3 (xvi) (d) of the Order isnot applicable to the Company.
xvii. The Company has not incurred any cash losses in the financialyear or in the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors duringthe year and accordingly the reporting under clause (xviii) is not applicable.
xix. According to the information and explanations given to us and onthe basis of the financial ratios (Also refer Note 48) to the standalone financialstatements) ageing and expected dates of realization of financial assets and payment offinancial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which cause usto believe that any material uncertainty exists as on the date of the audit report thatcompany is not capable of meeting its liabilities existing at the date of balance of sheetas and when they fall due within a period of one year from the balance sheet date. Wehowever state that this is not an assurance to the future viability of the company. Wefurther state that are reporting is based on the facts up to the date of the audit reportand we neither give any guarantee nor any assurance that all the liabilities falling duewithin a period of one year from the balance sheet date will get discharged by thecompany as and when they fall due.
xx. In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of Section 135 of theCompanies Act 2013 pursuant to any project. Accordingly clause 3(xx)(a) and 3(xx)(b) ofthe order are not applicable to the Company.
xxi. The reporting under clause 3(xxi) of the order is not applicablein respect of audit of standalone Financial Statements. Accordingly no comment in respectof the said clause has been included in this report.
ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report to the members of HPL Electric & PowerLimited of even date)
Report on the Internal Financial Controls with reference to standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 ('the Act')
We have audited the internal financial controls with reference tostandalone financial statements of HPL ELECTRIC & POWER LTD. ('the Company') asof March 312022 in conjunction with our audit of the standalone Ind AS financialstatement of the company for the year then ended and as on that date.
Management's Responsibility for the Internal Financial Controls
The Board of Directors of the company is responsible for establishingand maintaining internal financial controls based on the internal control with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over financial Reporting issued by the Institute of CharteredAccountants of India (the 'Guidance Note'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to standalone financial statements on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal financialControls Over Financial Reporting ( The Guidance Note) issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extant applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note required that we comply with theethical requirements and plan and perform the audit to obtain reasonable assurance aboutinternal financial controls with reference to standalone financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to financial statements included obtaining an understanding ofinternal financial controls with reference to standalone financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend of the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statement whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to StandaloneFinancial Statements
A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purpose in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statement in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company are beingmade only in accordance with authorisation of the management and directors of the companyand (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements. Inherent Limitations of Internal FinancialControls with reference to Standalone Financial Statements Because of the inherentlimitation of internal financial controls with reference to standalone financialstatements 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 with reference tostandalone financial statements to future periods are subject to the risk that theinternal financial controls with reference to standalone financial statements may becomeinadequate because of change in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
Opinion
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Control with reference to standalone financial statementsissued by the Institute of Chartered Accountant of India.
| For Kharabanda Associates |
| Chartered Accountants |
| FRN: 003456N |
| Sunil Kharabanda |
| Proprietor |
| Place : New Delhi | M. No. 082402 |
| Date : 26th May 2022 | UDIN: 22082402AKCIMU1286 |
