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Power Grid Corporation of India Ltd.

BSE: 532898 Sector: Infrastructure
NSE: POWERGRID ISIN Code: INE752E01010
BSE 00:00 | 16 Nov 187.95 0.75
(0.40%)
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187.20

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190.00

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185.85

NSE 00:00 | 16 Nov 188.10 1.00
(0.53%)
OPEN

187.00

HIGH

190.00

LOW

186.20

OPEN 187.20
PREVIOUS CLOSE 187.20
VOLUME 113600
52-Week high 217.00
52-Week low 174.25
P/E 11.44
Mkt Cap.(Rs cr) 98,328
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 187.20
CLOSE 187.20
VOLUME 113600
52-Week high 217.00
52-Week low 174.25
P/E 11.44
Mkt Cap.(Rs cr) 98,328
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Power Grid Corporation of India Ltd. (POWERGRID) - Auditors Report

Company auditors report

To the Members of Power Grid Corporation of India Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Power GridCorporation of India Limited ("the Company") which comprise the Balance Sheetas at 31st March 2018 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "Standalone Ind AS FinancialStatements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards ("IndAS") prescribed under Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under and the Order issued under section143 (11) of the Act.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of thecompany as at 31st March 2018 its profit including other comprehensive income itschanges in equity and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone Ind ASFinancial Statements:

(a) in respect of recognition of revenue from transmission assets for which Anal tarifforders are yet to be issued by the CERC [Refer Note No. 36 (b) (ii)]; and

(b) in respect of Balance confirmation reconciliation and consequential adjustmentsif any of Trade Receivable and Recoverable and Trade and Other Payables which is carriedout on an ongoing basis [Refer Note No. 46(a)].

Our opinion is not modified in respect ofthese matters.

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 subsection (11) of Section 143 ofthe Act we give in the Annexure '1' our report on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. In terms of section 143 (5) of the Companies Act 2013 we give in the Annexure'2'our report on the directions issued by the Comptroller and Auditor General of India.

3. As required by section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome)the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under section 133 ofthe Act read with therelevant rules issued thereunder;

(e) In view of exemption given vide notification no. G. S. R. 463(E) dated June 52015 issued by Ministry of Corporate Affairs provisions of Section 164(2) of the Actregarding disqualification of Directors are not applicable to the Company;

(f) With respect to the adequacy of the internal financial controls with reference tostandalone Ind AS financial statements of the company and the operating effectiveness ofsuch controls refer to our separate report in Annexure '3'. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls with reference to standalone Ind AS financial statements.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note No. 48 and 62 to thestandalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or IndianAccounting Standards for material foreseeable losses if any on long-term contractsincluding derivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S. K. Mittal & Co. For R. G. N. Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FRN : 001135N FRN : 002785S FRN : 301178E FRN : 001475C
(CA Gaurav Mittal) (CA R. Rangarajan) (CA Amitav Kothari) (CA Indra Pal Singh)
Partner Partner Partner Partner
M. No. 099387 M. No. 041883 M. No. 016639 M. No. 410433

Place : New Delhi Date : 29th May 2018

Annexure '1' to the Independent Auditors' Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2018 we report that:

(i) a) The Company has generally maintained records showing full particulars includingquantitative details and situation of Fixed Assets (Property Plant & Equipment).

b) The fixed assets (Property Plant & Equipment) have been physically verified byexternal agencies during the year. In our opinion frequency of verification is reasonablehaving regard to the size of the Company and nature of its business. No materialdiscrepancies were noticed on such verification.

c) In our opinion and according to information and explanations given to us and on thebasis of an examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except:

No. of Cases Cost Net Block
(^ in crore) (^ in crore)
Leasehold Land 10 69.83 61.59
Freehold Land 30 230.05 230.05
Buildings (Flats in Mumbai) 28 2.95 1.99

(ii) The inventories have been physically verified by external agencies during theyear. In our opinion frequency of verification is reasonable having regard to the sizeofthe Company and nature of its business. No material discrepancies were noticed on suchverification.

(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured during the year to any companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Act. In view ofthe above the clause 3(iii) (a) clause 3(iii) (b) and clause3(iii) (c) ofthe Order are not applicable.

(iv) In our opinion and according to information and explanation given to us thecompany has complied with provisions of section 185 and 186 ofthe Act in respect of loansinvestments guarantees and security.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposit from the public in accordance with the provisions ofthe sections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder. Accordingly paragraph 3(v) ofthe order is not applicable to the company.

(vi) We have broadly reviewed the cost records maintained by the company specified bythe Central Government under sub section (1) of section 148 of the Companies Act 2013 inrespect of Transmission & Telecom Operations of the Company and we are of the opinionthat prima facie the prescribed records have been made and maintained. However we havenot made detailed examination ofthe cost records with a view to determine whether they areaccurate or complete.

(vii) a) According to the information and explanations given to us the Company isgenerally regular in depositing undisputed statutory

dues with appropriate authorities including Provident Fund Income Tax Goods andServices Tax Sales Tax Wealth Tax Service Tax Duty of Custom Duty of Excise ValueAdded Tax Cess and other statutory dues applicable to the Company and that there are noundisputed statutory dues outstanding as at 31st March 2018 for a period of more than sixmonths from the date they became payable. As informed provisions ofthe Employees StateInsurance Act are not applicable to the Company.

b) According to information and explanations given to us there are no disputed dues ofDuty of Customs or Duty of Excise which have not been deposited. However followingdisputed demands of Income Tax or Sales Tax or Service Tax or Value Added Tax or Cess dueshave not been deposited:

Name of the Statute Nature of dues Amount* (? in crore) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 2.23 FortheFY 2010-11 ITAT Delhi
Income Tax Act 1961 Income Tax 2.02 For the FY 2013-14 & 201415 CIT (A) Delhi
Income Tax Act 1961 Income Tax 5.99 Jurisdictional Assessing Officers of TANs
Income Tax Act 1961 Income Tax 4.16 Jurisdictional Assessing Officer Delhi
Chhattisgarh Entry Tax Act 1976 Entry Tax 71.44 For the FY 2012-13 to 2017-18 Chhattisgarh High Court
Finance Act 1994 Service Tax 1.57 For the F.Y. 2003-04 CESTAT Kolkata
Bihar Value Added Tax2005 Entry Tax 12.00 For FY 2014-15 Chief Commissioner Commercial Tax Bihar
Bihar Value Added Tax2005 Entry Tax 3.60 For FY 2015-16 Joint Commissioner Commercial Tax (Appeals)
Goa Building & Other Construction Workers Act & Rules thereunder Building & Other Construction Workers Cess 0.04 For the F.Y. 2014-15 & 2015-16
J&K GST Act 1962 Sales Tax 7.76 From F.Y.1996-97 to 2001-02 Sales Tax Appellate Tribunal J&K
J&K GST Act 1962 Sales Tax 179.37 From F.Y.2002-03 to 2012-13 Dy./Addl. Commissioner of Sales Tax (appeals) Jammu J&K
Punjab Vat Act 2005 (Entry Tax) Entry Tax 9.64 From F.Y.2011-12 to 201314 Hon'able High Court Punjab & Haryana
Building & Other Construction Workers Cess Act 1996 BOCW 4.62 For FY 2007-08 Hon'able High Court Himachal Pradesh Shimla
UPVAT Sales Tax Demand 0.10 For F.Y. 2015-16 Hon'able Allahabad
High Court
UPVAT Central Sales Tax 0.01 For FY 2013-14 Dy. Commissioner Commercial Tax Allahabad
Finance Act1994 Service Tax 0.05 FY 2015-16 & 2016-17 Commissioner of Central Tax Hyderabad
Total 304.60

* Demand amount including interest net of amount paid under protest.

(viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted during the year in repayment of loans to its financialinstitutions bankers and dues to the Bond holders.

(ix) In our opinion on an overall basis and according to the information andexplanations given to us the company has applied the term loans including funds raisedthrough bonds for the purpose they were obtained. The company has raised funds by issuanceof debt instruments (bonds) during the year. The company has not raised money by way ofinitial public offer or further public offer during the year.

(x) According to the information and explanations given to us and as represented by themanagement we have been informed that no case of fraud has been committed on or by thecompany during the year.

(xi) In view of exemption given vide notification no. G. S. R. 463(E) dated June 52015 issued by Ministry of Corporate Affairs provisions of Section 197 read withSchedule V of the Act regarding managerial remuneration are not applicable to the Company.Accordingly paragraph 3(xi) of the order is not applicable to the company.

(xii) The company is not a Nidhi Company as prescribed under section 406 of the Act.Accordingly paragraph 3(xii) of the order is not applicable to the company.

(xiii) According to the information and explanations given to us and as represented bythe management all transactions with the related parties are in compliance with sections177 and 188 of the Act where applicable and the details have been disclosed in thestandalone Ind AS financial statements as required by the applicable Indian AccountingStandards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) is not applicable to the company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)is not applicable to the company.

(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) is not applicable to the company.

For S. K. Mittal & Co. For R. G. N. Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FRN : 001135N FRN : 002785S FRN : 301178E FRN : 001475C
(CA Gaurav Mittal) (CA R. Rangarajan) (CA Amitav Kothari) (CA Indra Pal Singh)
Partner Partner Partner Partner
M. No. 099387 M. No. 041883 M. No. 016639 M. No. 410433

Place : New Delhi Date : 29th May 2018

Annexure '2' to the Auditors Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2018

s. No. Directions Auditors' Comments Action taken by management Impact on standalone Ind AS financial statements
1. Whether the company has clear title / lease deeds for freehold and leasehold land respectively? If not please state the area of the freehold and leasehold land for which title / lease deeds are not available. The Company is having clear title/deeds for freehold leasehold land and buildings/flats except 268.50 hectares of freehold land valuing ^230.05 crore 133.25 hectares of leasehold land valuing ^69.83 crore and 21674 sq.feet offlats valuing ^2.95 crore. The company is taking appropriate steps for getting clear title for such freehold and leasehold land. Nil
2. Whether there are any cases of waiver / write off of debts / loans / interest etc. If yes the reasons thereof and the amount involved. According to the information and explanations given to us there are no cases of waiver / write off of debts / loans / interest etc. except ^0.87 crore recoverable from Kalinga Bidyut Prasaran Nigam Pvt. Ltd. (wholly owned subsidiary company) waived off towards amount recoverable for expenses made on its behalf. Charged to the Statement of Profit & Loss Profit for the year is lower by ^0.87 crore and Other current financial assets are lower by ^0.87 crore.
3. Whether proper records are maintained for inventories lying with third parties & assets received as gift grant(s) from the Govt or other authorities. The company has maintained adequate records in respect of inventories lying with third parties and grant(s) received from the Govt or other authorities. No assets have been received by the company as gift from Govt or other authorities. Proper records are maintained Nil
For S. K. Mittal & Co. For R. G. N. Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FRN : 001135N FRN : 002785S FRN : 301178E FRN : 001475C
(CA Gaurav Mittal) (CA R. Rangarajan) (CA Amitav Kothari) (CA Indra Pal Singh)
Partner Partner Partner Partner
M. No. 099387 M. No. 041883 M. No. 016639 M. No. 410433

Place : New Delhi Date : 29th May 2018

Annexure '3' to the Auditors' Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the act")

We have audited the internal financial controls with reference to Ind AS financialstatements of the company as at 31st March 2018 in conjunction with our audit of thestandalone Ind AS 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 with reference to Ind AS financial statements based on the internalcontrols over financial reporting 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 (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls with reference to Ind AS financialstatements that were operating effectively for ensuring the orderly and efficient conductof business including adherence to Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Ind AS financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial Control overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Ind AS financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to Ind AS financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference toInd AS financial statements included obtaining an understanding of internal financialcontrols with reference to Ind AS financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal controls based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thestandalone Ind AS 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 systemwith reference to Ind AS financial statements.

Meaning of Internal Financial Controls with reference to Ind AS financial statements

A company's internal financial control with reference to Ind AS financial statements isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to Ind AS financial statements includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets ofthe company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors ofthe company; 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 standalone Ind AS financial statements.

Inherent Limitations of internal Financial Controls with reference to Ind AS financialstatements

Because of the inherent limitations of internal financial controls with reference toInd AS financial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Ind AS financial statements to future periods are subject to the risk thatthe internal financial controls with reference to Ind AS financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to Ind AS financial statements and such internalfinancial controls with reference to Ind AS financial statements were operatingeffectively as at 31st March 2018 based on the internal financial controls overfinancial reporting 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.

For S. K. Mittal & Co. For R. G. N. Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FRN : 001135N FRN : 002785S FRN : 301178E FRN : 001475C
(CA Gaurav Mittal) (CA R. Rangarajan) (CA Amitav Kothari) (CA Indra Pal Singh)
Partner Partner Partner Partner
M. No. 099387 M. No. 041883 M. No. 016639 M. No. 410433

Place : New Delhi Date : 29th May 2018