To the Members of NHPC Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements ofNHPC Limited ("the Company") which comprise the Balance Sheet as at March 312020 and the Statement of Profit and Loss (including Other
Comprehensive Income) Statement of Changes in Equity and Statement ofCash Flows for the year then ended and Notes to the Standalone Financial Statementsincluding a summary of significant accounting policies and Other Explanatory Notes for theyear ended on that date (hereinafter referred to as "Financial Statements"). Inour opinion and to the best of our information and according to the explanations given tous the aforesaid
Standalone Financial Statements give the information required by theCompanies Act 2013 (" the 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 March 31 2020 and profit changes in equity andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditors' Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained issufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that- in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. 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. We have considered the matters describedbelow to be the Key Audit Matters for incorporation in our Report.
|Key audit Matters ||Addressing the Key Audit Matters |
|1. Regulatory Deferral Account Balances and accruals of revenue pending tariff Notifications. ||Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the carrying the value of Regulatory Deferral Account |
| ||Debit Balances include the following: |
|Regulatory Deferral Account balances include accruals aggregating to Rs. 3470.59 Crore on account of interest cost and other attributable expenses pertaining to Subansiri Lower HE Project for the period from the date of interruption of work i.e. 16.12.2011 till 30.09.2019 as indicated in Note 34(22A). ||Understanding and testing the design and operating effectiveness of controls as established by the management for accrual of income and determination of the amounts recoverable there against. |
|The operating activities of the Company are subject to cost of service regulations whereby tariff charged for electricity generated is based on allowable capital and other cost and expenses and stipulated return there against. ||Obtaining and understanding of the amount recoverable in terms of CERC Regulations and assessing testing and evaluating the reasonableness thereof keeping in view the significant judgements applied by the management for such assessments. |
|Regulatory Deferral Accounts are based on the estimates with respect to recoverability thereof as per the current CERC Tariff Regulations on final approval and notifications. ||The above includes the evaluation of the CERC guidelines and acceptance of the claim made by the Company in the past and the trend of disallowances on various count and adherences and compliances thereof by the management and rationale for assumptions taken under the given situation and business environment. |
|The accruals made as above are vital to the business in which the Company is operating. In absence of specific notification and rate fixation these are based on the management's assumptions and estimates which are subject to finalisation of tariff by CERC and commencement of operations of the Project. || |
| ||Evaluating the various assumptions considered by the management for arriving at the value of Cash generating Unit Note 34(18) in case of Subansiri Lower HE Project and adequacy thereof with respect to the carrying value of the Project in Progress and balances pertaining to the said project under Regulatory deferral Accounts. |
|2. Impairment Assessment of carrying amount of Property Plant and Equipment (PPE) and Capital Work in Progress (CWIP) ||Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the non-provisioning of any CGU based on impairment testing include the following: |
|Certain Cash Generating Units (CGUs) of the company were assessed for impairment as on 31st March 2020. This covers Property Plant and Equipments and Capital Work in Progress in respect of projects as given in Note 34(18). This ||Critical evaluation of internal and external factors impacting the entity and indicators of impairment (or reversal thereof) in line with Ind AS 38; |
|an adverse effect on the company has taken place during the year or is expected to take place in the near future in the technological economic or legal environment in which the company operate. Based on the assessment the company has concluded that there exists no significant impairment indicator or any impairment in respect of the CGUs of the company tested for impairment during FY 2019-20. Based on the above assessment no provision for impairment has been considered necessary by the Company. ||Review of impairment valuation models used in has been assessed that no significant change with relation to CGU to determine the recoverable amount by analysing the key assumptions used by management in this respect including: |
| ||- Consistency with respect to forecast for arriving at the valuation and assessing the potential impact of any variances; |
| ||- Price assumptions and tariff used in the models; |
| ||- Factoring of risk inherent to the CGUs in the Cash Flow projections or the discount rate. |
|Impairment exercise undertaken which justifies the carrying amount of certain assets including Capital work in progress pertaining to Subansiri Lower Project and the regulatory deferral account balances pertaining to same as dealt with under para 1 above is significant and vital to the Company's operations. ||- The assumption/estimation for the weighted average cost of capital and rate of discount for arriving at the value in use. |
| ||Reviewed the Government policy and approval for setting up the Projects decision of the Board and the efforts and steps being undertaken in this respect. |
|Evaluation of the impairment involves assessment of value in use of the Cash Generating Units (CGUs) and requires significant judgements and assumptions about the future cash flow forecasts forecast production forecast volumes prices and discount rate. ||Reliance have been placed on management projections for completion timeline volume of generation and resultant revenue based on expected tariff there against. |
|3. Contingent Liabilities against claim from Contractors (Note 34.1(a)(i)) ||Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the Contingent Liabilities include the following: |
|Various claims lodged by the Contractors against Capital Works amounting to Rs. 10144.10 crore have been disclosed under Contingent Liability. This includes matters under arbitration and/ or before the Court which have been decided against the Company out of which Rs. 2020.81 crore have been paid/deposited pursuant to the NITI Aayog directions or Court order. ||Obtained the status of the case from the legal department and their view on the matter; |
| ||Evaluated the contractual terms and conditions and management's rationale for the adequacy of the provision so far made and the amount remaining unprovided against the demands made against the Company; |
|Claims made against the Company are significant. || |
|These are pending for decision before arbitration or other judicial forums and consequential and possible impact thereof and provisions/disclosure required have been based on the management's assessment of the probability of the occurrence of the liability. ||Discussion with management and reading/ reviewing the correspondences Memos and Notes on related matters. |
| ||Reliance has been placed on the legal views and decisions on similar matters and probability of the liability arising therefrom pending final judgement/ decisions; |
| ||Reviewed the appropriateness and adequacy of the disclosure by the management as required in terms of the requirement of IND AS 37 "Provisions Contingent Liabilities and Contingent Assets". |
| || |
|4. Expenditure incurred on Survey and Investigation Projects and those under preconstruction stage upto 31.03.2020 ||Our audit procedures based on which we arrived at the conclusion regarding carrying the amount of expenditure incurred on survey and Investigation |
| ||Projects incurred include the following: |
|Expenditure of Rs. 1141.05 Crores as given in Note 2.2.2 has been incurred for conducting survey and investigation on projects. Out of this Rs. 820.78Crores (including Rs. 154.73 Crores during the year) have been provided for keeping in view uncertainty with respect to clearances approval for implementing the Projects leaving Rs. 320.27 Crores which has been carried forward as Capital Work in Progress. ||Obtained the status of the Projects as provided by the management and the reason thereof of keeping them in abeyance. |
|Further Capital work in progress also includes projects where active construction activities are yet to be undertaken. ||Understanding and testing the design and operating effectiveness of controls as established by the management for accounting the expenses incurred for survey and investigation projects and the policy followed for making provisions/ write off for such expenses given the nature of business of the Company and for project under preconstruction stage and allocation of Borrowing and other cost incurred and allocated thereagainst. |
|In the event of related Projects not being undertaken amounts spent on survey and investigations and those incurred/ allocated prior to construction thereof will no longer be eligible to be carried forward as Capital Work in Progress. ||Evaluating the management's rationale with respect to possible abandonment of such projects in future and/ or expected economic use of the same. |
| ||Evaluating the tenure of pre and under construction stage of project and management contention of normal period required for implementing the project given the location size and nature in each case of the respective project and this being technical in nature placing reliance on management contention and representation on the matter. |
|5. Recognition of Deferred Tax and evaluation of utilisation thereof. ||Our audit procedures based on which we arrived at the conclusion regarding appropriateness of non recognitionof the unutilised MAT Credit include the following: |
|Deferred Tax with respect to MAT Credit entitlement of Rs.2196.82 Crores lying unutilized as on 31.03.2020 has not been recognised. ||Understanding and testing the operating effectiveness of the company's control relating to taxation and assessment of carrying amount of deferred tax assets/ liabilities. |
|This is on the basis of the management's estimate and evaluation of taxable profit in foreseeable given period in future based on convincing evidences against which such credit can be utilised. ||Review of the Company's accounting policy in respect of deferred tax assets on unutilized MAT credit and current year development if any requiring change in such policy and management contention on the same. |
|This involves significant management judgement based on future projections including future capital expenditure for capacity enhancement and which may significantly vary on crystallization. || |
| ||Evaluation of tax credit entitlement as legally available to the company based on internal forecast prepared by the company and probability of future taxable income. |
| ||Typical review of underlying assumption for consistency and uncertainty involved and principle of prudence for arriving at reasonable degree of probability of utilisation of deferred tax assets. |
| ||Review of implication pertaining to regulatory regime under which company operates and possible utilisation of the MAT credit and impact thereof on the financial statement under the given current Regulatory provisions and period of applicability thereof. |
| ||Evaluation of adequacy and appropriateness of disclosure made in the financial statement. |
Information other than the Financial Statements and Auditors'Report thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Directors' Report Management Discussion and AnalysisReport Business Responsibility Report and Report on Corporate Governance but does notinclude the standalone financial statements and our auditors' report thereon.Theother information as stated above is expected to be made available to us after the date ofthis auditors' report.
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 identified above when it becomesavailable and in doing so consider whether the other is materially inconsistent withthe standalone financial statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated.
When we read the other information as stated above and if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance and describe necessary actions required as per applicablelaws and regulations.
Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the state of affairs performanceincluding other comprehensive income) changes in(financialposition)ProfitorLoss(financial equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian accounting Standards specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 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 isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditors' Responsibility 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 auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standard on Auditing (SAs) will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesestandalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control;
Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system with reference to financialstatements in place and 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 that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosuresin the standalone financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditors' report. However future events or conditions may cause the Company tocease to continue as a going concern; and
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and 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.
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 we identify during our audit.
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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements i. As required bythe Companies (Auditor's Report) Order 2016 ("the Order") issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable. ii. Based on the verification of books ofaccount of the Company and according to given to us we give below a report on theDirections issued by the Comptroller and Auditor General of India in terms of Section 143(5) of the Act:
|Sl. Directions ||Reply |
|1 Whether the Company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. ||According to the information and explanations given to us and based on our audit all accounting transactions are routed through ERP system implemented by the Company. Period end Financial Statements are compiled offline based on balances and transactions generated from ERP system. |
| ||We have neither been informed nor we have come across during the course of our audit any accounting transactions having impact on the integrity of the accounts along with the financial implications which have been processed outside the IT system. |
|2 Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/ loans/ interest etc. made by a lender to the Company due to the Company's inability to repay the loan? If yes the financial impact may be stated. ||According to information and explanations given to us and based on our audit there is no case of restructuring of an existing loan or cases of waiver/ write off of debts/ loans/ interest etc. made by lender to the Company. |
|3 Whether funds received/ receivable for specific schemes from Central/ State agenciesto were properly accounted for/ utilized as per its terms and conditions? List the cases of deviation. ||According to information and explanations given us and based on our audit the Company has accounted for and utilized the funds received for specific schemes from Central/ State agencies as per the terms and conditions of the schemes. |
iii. Further to our comments in the annexure referred to in theparagraph above as required by Section 143(3) of the Act we report that: a) we havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; b) in our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books; c) the Balance Sheet the Statement of Profitand Loss (including Other Comprehensive Income)the Statement of Changes in Equity and theCash Flow Statement dealt with by this Report are in agreement with the books of account;d) in our opinion the aforesaid standalonefinancial statements comply with the IndianAccounting Standards specified under Section 133 of the Act e) in terms of Notificationno. G.S.R. 463 (E) dated 05th June 2015 issued by the Ministry of Corporate Affairsprovisions of Section 164(2) of the Act regarding disqualifications of the Directors arenot applicable as it is a government Company; f) With respect to the adequacy of theinternal financial controls with reference to financial statements of the Company and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB". Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company's internal control; and g) With respect to the othermatters to be included in the Auditors' Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on itsfinancialposition in its standalone financialstatements Refer Note no. 34 para 1 to the standalone financial statements; ii. TheCompany has made provision as required under the applicable law or Indian Accounting
Standards for material foreseeable losses if any on long-termcontracts including derivative contracts; and iii. There has been no delay in transferringamounts which were required to be transferred to the Investor Education and ProtectionFund by the Company. iv. As per notification number G.S.R. 463 (E) dated 5th June 2015issued by Ministry of Corporate Affairs section 197 of the Act as regards the managerialremuneration is not applicable to the Company since it is a Government Company.
|For Arora Vohra & Co. ||For DSP & Associates ||For Lodha & Co. |
|Chartered Accountants ||Chartered Accountants ||Chartered Accountants |
|Firm's ICAI Registration No.: 009487N ||Firm's ICAI Registration No.:006791N ||Firm's ICAI Registration No.:301051E |
|A K Aggarwal ||Sanjay Jain ||R P Singh |
|Partner ||Partner ||Partner |
|M. No. 013833 ||M. No. 084906 ||M. No. 052438 |
|Place: Ludhiana ||New Delhi ||Kolkata |
|Date: June 27 2020 || || |
|UDIN: 20013833AAAABK2824 ||UDIN: 20084906AAAAPK1840 ||UDIN: 20052438AAAABM2834 |
ANNEXURE "A" TO THE AUDITORS' REPORT OF EVEN DATE:
i) a. The Company has maintained proper records showing fullparticulars including quantitative details and situations of Fixed Assets. b. As per theinformation and explanations given to us and on the basis of our examination of therecords of the Company the Tangible Fixed Assets except Land in certain Units have beenphysically verified by the management/ outside agencies in a phased manner which in ouropinion is reasonable having regard to the size of Company and nature of its business.The reconciliation of physically verified assets with the book records in certain cases isin progress. Discrepancies noticed on the physical verification and consequentialadjustments are carried out on completion of According to information and explanationsgiven by the management and in our opinion the same are not material.
c. According to the information and explanations given to us therecords examined by us and based on the Title/ Lease deeds provided to us we report thatthe title/ Lease deeds comprising all the freehold/ leasehold immovable properties ofland and building are held in the name of the Company as on the balance sheet date exceptfor the following where the title/lease deeds are not available with the Company:
|Nature ||Area in Hectares ||Gross block as at 31.03.2020 ||Net block as at 31.03.2020 |
| || ||(Rs. In Crore) ||(Rs. In Crore) |
|Freehold land ||143.48 ||20.47 ||20.47 |
|Leasehold Land included under Right of Use Assets ||530.88 ||251.20 ||231.31 |
|Building under Lease ||0.0465 ||17.01 ||16.08 |
ii) As informed the inventories of the Company except for inventoriesin transit have been physically verified by the management/ outside agencies during theyear. In our opinion and according to the information and explanations given to us thefrequency of such verification is reasonable. The discrepancies noticed on physicalverification of inventories as compared to book records were not material and the samehave been properly dealt with in the books of account. iii) According to the informationand explanations given to us by the Management the Company has not granted any loanssecured or unsecured to companies firms limited liability partnerships or other partiescovered in the register maintained under section 189 of the Act except unsecured loangranted during the previous year to a Company. a) In our opinion the terms and conditionsof grant of such loans are not prima facie prejudicial to the interest of the Company.b) In respect of Loan granted by the Company in earlier yearthe schedule of repayment ofprincipal and
Interest has been stipulated. The Company has during the year extendedthe repayment schedule of Unsecured loan of Rs. 6 Crores which was due for repaymentduring the year and as such the repayment of Principal and repayment of interest isregular.
c) in respect of such loan as mentioned in Para (b) above there is nooverdue amount for more than ninety days.
iv) In our opinion and according to information and explanations givento us the Company has in respect of loans investments guarantees and securitycomplied with the provisions of section 185 and 186 of the Act.
v) The Company has not accepted any deposits within the meaning ofsections 73 to 76 or any other relevant provisions of the Act.In respect of overdueearnest money deposits and security deposits Management is of the view that overdueearnest money deposits and security deposits of suppliers/contractors appearing in thebooks are in the nature of retention money for performance of contracts for supply ofgoods and services and accordingly not to be treated as deemed deposits by virtue ofamendment in rule 2 sub rule
(1) clause (c) of the Companies (Acceptance of Deposits) AmendmentRules 2016.
vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under Section 148 (1) of the Act in respect of the Company's products towhich the said rules are made applicable and are of the opinion that prima facie theprescribed records have been maintained. We have however not made a detailed examinationof the said records with a view to determine whether they are accurate or complete. vii)a. According to the information and explanations given to us during the year the Companyhas generally been regular in depositing with appropriate authorities undisputed statutorydues including Provident
Fund Investor Education Protection fund Employees' StateInsurance Income Tax Sales Tax Wealth Tax Goods and Service Tax Service tax CustomDuty Excise Duty Value Added Tax Cess and other material statutory dues as applicableto it.
There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Sales Tax Service tax Custom Duty ExciseDuty Value Added Tax Cess and other material statutory dues in arrear as at March 312020 for a period of more than six months from the date they become payable.
b. According to the information and explanations given to us thedetails of disputed dues of income tax sales tax service tax customs duty excise dutyand Value added Tax if any as at March 31 2020 are as follows:
|Name of Statute ||Nature of Duties ||Amount (Rs In Crore) ||Financial Year to which it pertains ||Deposit under Protest (Rs In Crore) ||Forum at which case is pending |
|Income Tax Act 1961 ||Income Tax ||0.001 ||2007-08 ||0 ||Traces |
| || ||0.01 ||2010-11 ||0 ||ITO Srinagar |
|Sales Tax Acts/ Vat Acts ||Sales Tax /Vat ||9.92 ||2012-13 ||0 ||Appellate Tribunal |
| || ||22.31 ||2013-14 to 2014-15 ||0 ||Appellate Authority |
| || ||34.15 ||2015-16 ||0 ||Appeal to be filed. |
| || ||0.18 ||2009-10 ||0 ||DETC Kullu |
| || ||16.69 ||2005-06 to 2011-12 ||15.29 ||Sr.Joint Commissioner Siliguri Circle |
| || ||2.73 ||2012-13 ||0 ||JCSiliguri Charge |
| || ||298.53 ||1994-95 ||0 ||J&K Sales Tax |
|Finance Act 1996 ||Service Tax ||28.44 ||2009-10 to 2016-17 ||27.25 ||Appellate Tribunal Service Tax Tribunal Kolkata |
| || ||18.10 ||2004-05 to 2009-10 ||1.70 ||CESTAT Chandigarh |
|Custom Act 1962 ||Custom Duty ||25.15 ||2019-20 ||0 ||Department of Customs & Excise |
viii) In our opinion and on the basis of information and explanationsgiven to us by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions banks Governments or debenture holders. ix)In our opinion and according to the information and explanations given to us the Companyhas not raised any money by way of initial public offer or further public offer during theyear. The Company has raised money by issue of debt instruments and Term Loans duringyear.On the basis of our examination and according to the information and explanationsgiven to us money raised by way of debt instruments and term loans have been applied forthe purpose for which the loans were obtained. x) Based on our audit procedures and as perthe information and explanations given to us by the management no fraud by the Company orany fraud on the Company by any person including its officers/ employees has beennoticed or reported during the year.
xi) As per notification number G.S.R. 463 (E) dated 5th June 2015issued by Ministry of Corporate Affairs section 197 of the Act as regards the managerialremuneration is not applicable to the Company since it is a Government Company. xii) TheCompany is not a Nidhi Company and hence reporting under paragraph 3(xii) of the Order isnot applicable to the Company. xiii) According to the information and explanations givento us and based on our examination of the records of the Company transactions with therelated parties are in compliance with Section 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the Standalone Financial Statements asrequired by the applicable accounting standards. xiv) According to the information andexplanations given to us and based on our examination of the records of the Company theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly clause 3 (xiv) of the Order isnot applicable to the Company. xv) According to the information and explanations given tous and as represented to us by the management and based on our examination of the recordsof the Company the Company has not entered into non-cash transactions with directors orpersons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.xvi) The Company is not required to be registered under section 45-IA of the Reserve Bankof India Act 1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph (f) under Report on Other Legal andRegulatory Requirements' of our report of even date)
Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Subsection 3 of Section 143 of the Act
We have audited the internal financial controls with reference tofinancial statements of NHPC Limited ("the Company") as at March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over
Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based 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 Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial control with reference to financial statements was established and maintainedand if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the standalone financial statements 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 internalfinancial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to financialstatements
A Company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company'sinternal financial control with reference to financial statements includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could havea material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference tofinancial statements
Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
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 with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312020 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For Arora Vohra & Co. ||For DSP & Associates ||For Lodha & Co. |
|Chartered Accountants ||Chartered Accountants ||Chartered Accountants |
|Firm's ICAI Registration No.: 09487N ||Firm's ICAI Registration No.:006791N ||Firm's ICAI Registration No.:301051E |
|A K Aggarwal ||Sanjay Jain ||R P Singh |
|Partner ||Partner ||Partner |
|M. No. 013833 ||M. No. 084906 ||M. No. 052438 |
|Place: Ludhiana ||New Delhi ||Kolkata |
|Date: June 27 2020 || || |
|UDIN: 20013833AAAABK2824 ||UDIN: 20084906AAAAPK1840 ||UDIN: 20052438AAAABM2834 |