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Jaiprakash Power Ventures Ltd.

BSE: 532627 Sector: Infrastructure
NSE: JPPOWER ISIN Code: INE351F01018
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VOLUME 6218474
52-Week high 11.22
52-Week low 3.31
P/E 21.30
Mkt Cap.(Rs cr) 4,818
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 6.85
CLOSE 6.70
VOLUME 6218474
52-Week high 11.22
52-Week low 3.31
P/E 21.30
Mkt Cap.(Rs cr) 4,818
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jaiprakash Power Ventures Ltd. (JPPOWER) - Auditors Report

Company auditors report

To the Members of Jaiprakash Power Ventures Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Jaiprakash PowerVentures Limited ("the Company") which comprise the Balance Sheet as at March

31 2021 the Statement of Profit and Loss (including Other

Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlow for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information (herein afterreferred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects/possible effects of our observations stated in "Basisfor Qualified

Opinion" section below the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021its profit (including other comprehensive income)changes in equity and its cash flows forthe year ended on that date.

BasisforQualified

Attention is drawn to:

(a) As stated in note no.44(e) of standalone financial statements for the year ended31st March 2021 the Company has given/provided corporate guarantee of USD 1500 lakhs(previous year USD 1500 lakhs) for loans granted by the lender to Jaiprakash AssociatesLimited (JAL) (the party to whom the Company is an associate) of amounting to Rs. 70333lakhs (previous year Rs. 70333 lakhs) for which fair valuation has not been done as perthe applicable IND-AS as of 31st March 2021 and also no provision there against has beenmade in these financial statements (in the absence of fair valuation impactunascertained).

(b) (b) As stated in note no. 46 and 53(a) of standalone financial statements for theyear ended 31st March 2021 no provision for diminution in value against certainlong-term investments made in subsidiaries amounting to Rs. 78785 lakhs (previous yearRs. 78915 lakhs) (Book Value) has been made by the management as in the opinion of themanagement such diminution is temporary in nature considering the intrinsic value of theassets future prospects and claims (impact unascertainable).

Having regard to the above management of the Company has concluded that no provisionagainst diminution in value of investment made as stated above in subsidiary companiesis necessary at this stage.

Matter stated in para (a) and (b) above had also been qualified in our report onpreceding year.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing

(SAs) as specified under Section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under 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.

Emphasis of Matters

We draw attention to the following matters:

(a) As stated in note no. 47 of standalone financialstatements for the year ended 31stMarch 2021 regarding the claims of UPPCL of Rs. 37054 lakhs (including carrying cost of

Rs 8193 lakhs for the financial year 2018-19 to 2020-21 as stated in the said note)against disallowances made in respect of a unit VHEP of the Company towards income tax andsecondary energy charges (paid / accounted for) in earlier years which is to be refundedback to UPPCL in view of Order of UPERC. Against the Order of UPERC in this regardCompany has filed an Appeal with APTEL as stated in the said note. Company believes thatit has a credible case and disallowance made by the UPPCL on account of income tax andsecondary energy charges are not in line with the terms of PPA signed with UPPCL.Accordingly as stated in the said note no provision against the stated amount andcarrying cost has been considered necessary by the management at this stage.

(b) As stated in Note no. 48 (i) of the audited standalone financial statements for theyear ended 31st March 2021 no provision has been considered necessary by the managementagainst Entry Tax in respect of Unit- Nigrie STPP (including Nigrie Cement Grinding Unit)amounting to Rs. 10871 lakhs (previous year Rs. 10656 lakhs) and interest thereon(impact unascertainable) as stated in said note. In respect of the stated unit receipts ofapproval for extension of the time for eligibility for exemption from payment of entry taxis pending from concerned authority as stated in the said note for which the company hasmade representations before the concerned authority and management is confident forfavorable outcome. Against the above entry tax demand till date of Rs. 5885 lakhs(previous year Rs. 4736 lakhs) has been deposited and shown as part of other non-currentassets which in the opinion of the management is good and recoverable.

(c) As stated in note no. 59(a) & 59(c) of the standalone financial statements forthe year ended 31st March 2021 regarding pending confirmations/reconciliation ofbalances of certain secured borrowings (current & non-current) banks (includingcertain fixed deposits) trade receivables/payables (including of micro and small) andothers (including capital creditors and of CHAs and receivables/payables from/to relatedparties)liabilities loans & advances and inventory lying with third parties/intransit. In this regard as stated in the note internal control is being strengthenedthrough process automation (including for as stated in note no. 59(b) regarding of fuelprocurement and consumption processes which are in process of further strengthening). Themanagement is confident that on confirmation/reconciliation there will not be any materialimpact on the state of affairs as stated in said note. (this is to be read with noteno.22.10 of the standalone financial statements for the year ended 31st

March 2021).

(d) For deferred tax assets on unabsorbed depreciation & business losses and of MATcredit entitlement as on 31st March 2021 of amounting to Rs. 22841 lakhs (previous yearRs. 29728 lakhs) and Rs. 18297 lakhs (previous year Rs. 22403 lakhs) respectively theManagement is confident about realisability. Accordingly these have been considered goodby the management as stated in

Note no. 66 (c) of the standalone financial statements for the year ended 31st March2021.

(e) (i) As stated in the Note no. 56 of the standalone financial statements for theyear ended 31st March

2021 fair value of Jaypee Nigrie Cement grinding unit being in excess as compared tothe carrying value (as on 31st March 2021 carrying value amounting to Rs. 24640 lakhs)as assessed by the management considering the expected future cash flows. Also managementis of the view that no impairment provision in the carrying amount of fixed assets

(including capital work-in-progress) is necessary at this stage considering abovestated reason.

(ii) As stated in the Note no. 55 of the standalone financial statements for the yearended 31st March 2021 fair value of fixed assets of

(JNSTPP and JBTPP) (including Land Building Plant & Machinery capitalized orunder CWIP) being in excess as compared to the carrying value as estimated by a technicalvaluer and for the reasons explained in the said note management is of the view that noimpairment provision in the carrying amount of fixed assets (including capitalwork-in-progress) is necessary at this stage.

(f) As stated in the Note no. 52 of the standalone financial statements for the yearended 31st March 2021 regarding the non-recovery of capacity charges of amounting to Rs.19535 lakhs as stated in the said note which have been disputed by MPPMCL. Company iscontesting with MPPMCL and in the opinion of the management above stated amount is goodand fully recoverable and hence no provision has been considered necessary by themanagement at this stage.

Our opinion is not modified in respect of above stated matters in para (a) to (f).

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended

March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

In addition to the matter described in the Basis for Qualified

Opinion section we have determined the matters described below to be the key auditmatters to be communicated in our report. For each matter below our description of howour audit addressed the matter is provided in that context:

Description of Key Audit Matters Audit procedure to address the key audit matters
Accounting for revenue
Company's power sales revenues are accounted for in accordance with provisional/ multi-year tariff orders and sometime based on past provisional approved/notified tariff rates determined by regulator which are subject to true up. The method of determining such tariff is complex and judgmental and requires estimates and assumptions with respect to the annual capacity charges consisting of depreciation interest on loan return on equity interest on working capital and operation & maintenance expenses etc. which may vary and plants required adjustment at the time of true up and may have significant impact on the revenue. (Note No. 61 of the Standalone Financial Statements) Our procedures included:
1. Considering the Company accounting policies with respect to accounting of the true up adjustments;
2. Where relevant reading external legal advice obtained by management;
3. Meeting with SR management/officials and reading subsequent correspondence including regulatory orders issued by the concerned authority time to time.
4. Basis for the raising invoices (including for the earlier period) and realization made against the same with the orders of the regulators.
5. Assessed the appropriateness of the disclosures made in the standalone financial statements.
6. Reading the loan agreements with the lenders to assess applicable interest rate and other charges and/or other terms/ conditions of such agreements.

Contingent liabilities/claims against the company and Diminution provision

The Company is facing a number of threats including legal and regulatory proceedings. The determination of the provision which required to be made and/ or the level of disclosure to be made required/involves a high degree of judgment. Accordingly provisions and contingent liabilities being considered as a key audit matter. (Note No. 44 and 47 to 49 of the Standalone Financial Statements) 1. Evaluating the design of and testing key controls in respect of litigation and regulatory procedures.
2. Where relevant reading external legal advice obtained by management.
3. Meeting with officials/management and reading subsequent correspondence minutes of meetings etc.
4. Assessing management's conclusions through understanding precedents set in similar cases.
5. Assessed the appropriateness of the disclosures included in Note no. 44 and 47 to 49 to the standalone financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information of the Annual Report which include under the headingin the Management Discussion and Analysis Board's Report including Annexure to Board'sReport Business Responsibility Report Corporate Governance and Shareholders Informationbut does not include the standalone financial statements and our auditor's report thereon.Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact.

We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position/state of affairs financialperformance total comprehensive incomechanges in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone 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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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 the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financialstatements may be influenced.

We consider quantitative materiality and qualitative factors in (i) planning the scopeof our audit work and in evaluating the results of our work; and (ii) to evaluate theeffect of any identified misstatements in the standalone financial statements.

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 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account; (d) In our opinion except for theeffect/possible effect of the matters described in ‘Basis for Qualified Opinion'section above the aforesaid standalone financial statements comply with theAccounting Standards specified under

Section 133 of the Companies Act2013;

(e) The matters described in ‘Basis of Qualified Opinion' paragraph above in ouropinion may have an adverse effect on the functioning of the Company; (f) On the basis ofthe written representations received from the directors as on March 31st 2021 taken onrecord by the Board of Directors none of the directors is disqualified as on March 31st2021 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report. Our report express modifiedopinion on the adequacy and operationeffectiveness of the company's internal financial controls over financial reporting; (h)With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us: i) TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note no. 44 to the standalone financial statements; ii) TheCompany has made provision as required under the applicable law or accounting standardsfor material foreseeable losses if any on long-term contracts including derivativecontracts; iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31st March 2021. (i) In Our opinion and to the best of our information andaccording to the explanation given to us the managerial remuneration for the year ended31st March 2021 has been paid/ provided for by the Company to its directors in accordancewith the provisions of Section 197 read with Schedule V to the Act.

For LODHA & CO.
Chartered Accountants
ICAI Firm Registration Number: 301051E
N.K.Lodha
Partner
Membership Number: 085155
UDIN: 21085155AAAADC9751
Place: New Delhi
Date: 14th June 2021

Annexure "A" referred to in paragraph 1 under the heading "Report onother legal and regulatory requirements" of our report of even date on the standalonefinancial statements of Jaiprakash Power Ventures Limited for the year ended 31st March2021

I. a. As informed to us the Company is in the process of compiling proper recordsshowing full particulars including quantitative details and situation of fixed assets. b.Some of the fixed assets have been physically verified by the management according to theprogramme of periodical verification in phased manner (to cover over the period of threeyears) which in our opinion is reasonable having regard to the size of the Company and thenature of its fixedassets. The discrepancies noticed on such physical verification werenot material. c. As per the records and information made available the title deeds ofimmovable properties are held in the name of the company except the parcel of the land ofRs. 686.35 Lakhs(Situated at Bina power plant which is in the name of the erstwhilecompany which has been merged with the company vide Order dated 25th July 2011 of theHon'ble High Court).

II. The inventory of the Company [except stock lying with the third parties and intransit and this is to be read with note no.59 (a) and (b)] has been physically verifiedby the management/outside agencies at reasonable intervals and in respect of inventory ofstores & spares there is perpetual inventory system and a substantial portion of thestocks have been verified during the year. In our opinion the procedures of physicalverification of inventory followed by the Management are reasonable in relation to thesize of the Company and nature of its business. As informed to us the discrepanciesnoticed on such physical verification of inventory as compared to book records were notmaterial.

III. The Company has not granted any loans secured or unsecured to any companiesfirms Limited Liability

Partnerships or other parties covered in the register maintained under section 189 ofthe Companies Act 2013. Accordingly the provisions of Clause 3(iii) (a) (b) & (c)of the Order are not applicable.

IV. According to the information explanations and representations provided by themanagement and based upon audit procedures performed we are of the opinion that inrespect of loans investments guarantees and security the Company has complied with theprovisions of the Section 185 and 186 of the Companies Act 2013. V. In our opinion andaccording to the information and explanations given to us the Company has complied withthe directive issued by the Reserve Bank of India and the provisions of Section 73 to76 ofthe Act or any other relevant provisions of the Act and the rules framed there under (tothe extent applicable). Based on the records and information and explanations provided tous the company has not accepted any deposit from the public during the year. We have beeninformed that no order has been passed by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or other Tribunal in this regard.

VI. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

VII. a. According to the records of the Company undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax service tax duty ofcustoms duty of excise value added tax cess and other statutory dues whereverapplicable have generally been deposited though with delays with the appropriateauthorities during the year in some cases which have been paid with applicable interestand there are no such undisputed statutory dues payable for a period of more than sixmonths from the date they became payable as at 31st March 2021 except interest on VAT ofRs. 264 lacs Interest on Electricity duty/Development cess of Rs. 2949 lacs ProvidentFund Rs. 0.15 Lacs and Interest on GST Rs. 0.78 lacs (since paid). b. According to therecords and information & explanations given to us there are no material dues inrespect of service tax and duty of customs that have not been deposited with theappropriate authorities on account of any dispute and the dues in respect of Income Taxsales tax/Value added tax/Goods and Service TaxCess duty of excise Electricity duty andEntry Tax that have not been deposited with the appropriate authority on account ofdispute and the forum where the dispute is pending are given below: -

Name of Statute Nature of dues Period to which amount relates Forum where dispute is pending Amount in Lakhs
Income Tax Act 1961 Income Tax Assessment year 2005-06 Commissioner of Income Tax (Appeals) Mumbai 172
Income Tax Act 1961 Income Tax Assessment year 2015-16 Commissioner of Income Tax (Appeals) Jabalpur 99
Income Tax Act 1961 Income Tax Assessment year 2016-17 Commissioner of Income Tax (Appeals) New Delhi 16115
Diversion Tax and Land Cess Diversion Tax and Land Cess FY 1998-99 Board of Revenue Gwalior 8
Entry Tax under the M.P. VAT Act 2002 Entry Tax # FY 2012-13 and 2013-14 Additional Commissioner of Commercial Tax Bhopal 2118
Entry Tax under the M.P. VAT Act 2002 Entry Tax # FY 2014-15 Madhya Pradesh High Court Jabalpur 4264
Entry Tax under the M.P. VAT Act 2002 Entry Tax # FY 2015-16 Madhya Pradesh High Court Jabalpur 2708
Entry Tax under the M.P. VAT Act 2002 Entry Tax # FY 2016-17 Additional Commissioner of Commercial Tax Bhopal 1153
Entry Tax under the M.P. VAT Act 2002 Entry Tax FY 2014-15 and 2015-16 Appellate Authority and Additional Commissioner of Commercial Tax Jabalpur 1577
Entry Tax under the M.P. VAT Act 2002 Entry Tax FY 2016-17 Appellate Authority and Additional Commissioner of Commercial Tax Jabalpur 2864
Entry Tax under the M.P. VAT Act 2002 Entry Tax FY 2017-18 Appellate Authority and Additional Commissioner of Commercial Tax Jabalpur 543
M.P. VAT Act 2002 VAT FY 2015-16 App. Authority Additional Commissioner of Commercial Tax Jabalpur 108
The Central Excise Act 1944. Excise July 2016 to June 2017 The Commissioner (Appeals) Central Goods & Service Tax Bhopal 41
The Central Sale Tax Act 1956 CST FY 2016-17 Appellate Authority and Additional Commissioner of Commercial Tax Jabalpur 13
Electricity Duty Act Electricity Duty November 2016- September-2019 Hon'ble High Court Jabalpur Madhya Pradesh 442
The Uttarakhand Water Tax on Electricity Generation Act 2012 Water Tax FY 2015-16 2016-17 2017- 18 2018-19. 2019-20 & 2020-21 Hon'ble High Court Nainital 3966
The Uttarakhand Green Energy Cess Tax Act 2014 Green Energy Cess FY 2015-16 2016-17 2017- 18 2018-19. 2019-20 & 2020-21 Hon'ble High Court Nainital 9204
Building and Other Construction Workers Welfare Cess Building and Other Construction Workers Welfare Cess Upto FY 16-17 Hon'ble High Court Jabalpur Madhya Pradesh 7185

[ # read with note no .48 (ii) of the financial statement for the year ended 31st March2021]

[read with note no. 59 (a) and (b) of the financial statement for the year ended 31stMarch 2021] VIII. In our opinion on the basis of audit procedures and according to theinformation and explanations given to us the company has not defaulted in repayment ofdues to banks and financial institutions there was no outstanding debentures during theyear. [Read with note no. 22.8 22.9 22.10 and 59 (a)].

IX. On the basis of information and explanation given to us the Company has not raisedmoney through term loan initial/further public offer (including debt instruments) duringthe year.

X. Based on the audit procedure performed and on the basis of information andexplanations provided by the management no fraud by the Company and no material fraud onthe Company by its officers or employees has been noticed or reported during the course ofthe audit. XI. According to the information and explanations given to us and based on ourexamination of the records of the Company managerial remuneration has been paid inaccordance with the requisite approval mandated by the provisions of section 197 read withSchedule V to the Companies Act 2013.

XII. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable. XIII. According to the information and explanations and records made availableby the management of the Company and audit procedure performed for transactions with therelated parties during the year the Company has complied with the provisions of Section177 and 188 of the Act. As explained and as per records details of related partytransactions have been disclosed in the standalone financial statements as per theapplicable

Indian Accounting Standards.

XIV. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures except allotment of fullypaid up equity shares on conversion of FCCBs as stated in Note no. 22.9 (ii) of thestandalone financial statement.

XV. On the basis of records made available to us and according to information andexplanations given to us the Company has not entered into non-cash transactions with thedirectors or persons connected with them. Accordingly paragraph 3(xv) of the Order is notapplicable.

XVI. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 as the provision of section is not applicable to the Company.

For LODHA & CO.
Chartered Accountants
Firm Registration Number: 301051E
N. K. LODHA
Partner
Membership No: 085155
Place : New Delhi
Date : 14th June 2021

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF JAIPRAKASH POWER VENTURES LIMITED

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 reporting of JAIPRAKASH POWER VENTURESLIMITED

("the Company") as of March 31 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting (the "GuidanceNote") issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly andefficientconduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

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 Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

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 with reference to theseFinancial Statements

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.

A company's internal financial control over financial reporting overfinancial 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 statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent limitations of Internal Financial Controls Over Financial Reporting withreference to these Standalone Financial Statements

Because of the inherent limitations 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 31 2021:

(i) Fair valuation of corporate guarantee provided by the company against loans grantedby the lender to Jaiprakash Associates Limited as stated in note no. 44 (e) (the party towhom the company is associate) as per applicable IND-AS as on 31 March 2021 has not beencarried out which could potentially have material impact on the financial statements.

(ii) Evaluation and assessment of recoverability [including provision has not been madeagainst these investments as stated in note no. 46 and 53(a)] in respect of certaininvestments made by the Company were not carried out which could potentially result in notmaking provision in books against these investments resulting in higher value ofinvestments in Books and lower statement of losses and net worth carry over losses.

A ‘Material weakness' is a deficiency or a combination of deficiencies ininternal financial controls over financial such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis. In our opinion except for theeffects/possible effects of the material weaknesses described above on the achievement ofthe objectives of the control criteria the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as of March 312021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2021standalone financial statements of the Company and these material weaknesses affect ouropinion on the standalone financial statements of the Company for the year ended 31st

March 2021.

Emphasis of matters:

Attention is drawn to:

(a) As stated in note no. 47 of standalone financial statements for the year ended 31stMarch 2021 regarding the claims of UPPCL of Rs. 37054 lakhs (including carrying cost of

Rs 8193 lakhs for the financial year 2018-19 to 2020-21 as stated in the said note)against disallowances made in respect of a unit VHEP of the Company towards income tax andsecondary energy charges (paid / accounted for) in earlier years which is to be refundedback to UPPCL in view of Order of UPERC. Against the Order of UPERC in this regardCompany has filed an Appeal with APTEL as stated in the said note. Company believes thatit has a credible case and disallowance made by the UPPCL on account of income tax andsecondary energy charges are not in line with the terms of PPA signed with UPPCL.Accordingly as stated in the said note no provision against the stated amount andcarrying cost has been considered necessary by the management at this stage.

(b) As stated in Note no. 48 (i) of the standalone financial statements for the yearended 31st March 2021 no provision has been considered necessary by the managementagainst Entry Tax in respect of Unit- Nigrie STPP (including Nigrie Cement Grinding Unit)amounting to Rs. 10871 lakhs (previous year Rs. 10656 lakhs) and interest thereon(impact unascertainable) as stated in said note. In respect of the stated unit receipts ofapproval for extension of the time for eligibility for exemption from payment of entry taxis pending from concerned authority as stated in the said note for which the company hasmade representations before the concerned authority and management is confident forfavorable outcome.

Against the above entry tax demand till date of Rs. 5885 lakhs (previous year Rs.4736 lakhs) has been deposited and shown as part of other non-current assets which in theopinion of the management is good and recoverable.

(c) As stated in note no. 59(a) & 59(c) of the standalone financial statements forthe year ended 31st March 2021 regarding pending confirmations/reconciliation ofbalances of certain secured borrowings (current & non-current) banks (includingcertain fixed deposits) trade receivables/payables (including of micro and small) andothers (including capital creditors and of CHAs and receivables/payables from/to relatedparties)liabilities loans & advances and inventory lying with third parties/intransit. In this regard as stated in the note internal control is being strengthenedthrough process automation (including for as stated in note no. 59(b) regarding of fuel

84 procurement and consumption processes which are in process of furtherstrengthening). The management is confident that on confirmation/reconciliation there willnot be any material impact on the state of affairs as stated in said note. (this is to beread with note no.22.10 of the standalone financial statements for the year ended 31st

March 2021).

(d) For deferred tax assets on unabsorbed depreciation & business losses and of MATcredit entitlement as on 31st March 2021 of amounting to Rs. 22841 lakhs (previous yearRs. 29728 lakhs) and Rs. 18297 lakhs (previous year Rs. 22403 lakhs) respectively theManagement is confident about realisability. Accordingly these have been considered goodby the management as stated in

Note no. 66 (c) of the standalone financial statements for the year ended 31st March2021.

(e) (i) As stated in the Note no. 56 of the standalone financial statements for theyear ended 31st March

2021 fair value of Jaypee Nigrie Cement grinding unit being in excess as compared tothe carrying value (as on 31st March 2021 carrying value amounting to Rs. 24640lakhs) asassessed by the management considering the expected future cash flows. Also management isof the view that no impairment provision in the carrying amount of fixed assets

(including capital work-in-progress) is necessary at this stage considering abovestated reason.

(ii) As stated in the Note no. 55 of the standalone financial statements for the yearended 31st March 2021 fair value of fixed assets of power plants

(JNSTPP and JBTPP) (including Land Building Plant & Machinery capitalized orunder CWIP) being in excess as compared to the carrying value as estimated by a technicalvaluer and for the reasons explained in the said note management is of the view that noimpairment provision in the carrying amount of fixed assets (including capitalwork-in-progress) is necessary at this stage.

(f) As stated in the Note no. 52 of the standalone financial statements for the yearended 31st March 2021 regarding the non-recovery of capacity charges of amounting to Rs.19535 lakhs as stated in the said note which have been disputed by MPPMCL. Company iscontesting with MPPMCL and in the opinion of the management above stated amount is goodand fully recoverable and hence no provision has been considered necessary by themanagement at this stage.

Our opinion is not modified in respect of above stated matters in para (a) to (f).

For LODHA & CO.
Chartered Accountants
Firm's Registration No. 301051E
N.K Lodha
Partner
Membership No. 085155
Place : New Delhi
Date : 14th June 2021

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