JSW ENERGY LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To the members of,
JSW ENERGY LIMITED
1. We have audited the attached Balance Sheet of JSW ENERGY LIMITED as at
31st March, 2012, the Profit and Loss Statement and also the Cash Flow
Statement for the year ended on that date annexed thereto. These financial
statements are the responsibility of the Company`s management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor`s Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 (hereinafter referred to as the "Act"), we annex
hereto a statement on the matters specified in paragraphs 4 and 5 of the
said Order, to the extent applicable.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:-
a) We have obtained all the information and explanations which to the best
of 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 the Company so far as appears from our examination of the books;
c) The Balance Sheet, Profit and Loss Statement and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss Statement and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards prescribed by Companies (Accounting Standards) Rules, 2006, to
the extent applicable;
e) On the basis of the written representation received from directors as on
31st March, 2012, and taken on record by the Board of Directors, we report
that none of the Directors is disqualified as on 31st March, 2012, from
being appointed as a director of the Company in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
f) In our opinion and to best of our information and according to the
explanations given to us, the said financial statements read together with
paragraph below the Note 16 regarding overdue trade receivable of Rs. 5.35
crore from Karnataka Power Transmission Corporation Limited, the matter in
respect of which is pending in Supreme Court, significant accounting
policies and other accompanying notes, give the information required by the
Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012;
ii) In the case of the Profit and Loss Statement, of the profit of the
Company for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
For LODHA & CO.
Chartered Accountants
A.M. Hariharan
Partner
Mumbai Membership No.38323
30th April, 2012 Firm Registration No. 301051E
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS` REPORT OF EVEN DATE ON THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012 OF JSW ENERGY
LIMITED
On the basis of such checks as were considered appropriate and according to
the information and explanations given to us during the course of audit, we
state that:
1. a) The Company has maintained proper records
showing full particulars, including quantitative details and situation of
fixed assets.
b) The fixed assets have been verified in accordance with a phased program
designed to cover all assets once in three years. The frequency of
verification is considered reasonable, having regard to the size of the
Company and nature of its fixed assets. Pursuant to the program, physical
verification of certain plant and machinery was conducted and no material
discrepancies were noticed on such verification.
c) During the year, no substantial part of fixed assets has been disposed
off by the Company.
2.a) The inventory has been physically verified by the management at
reasonable intervals during the year.
b) The procedures of physical verification of the inventories followed by
the management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) On the basis of examinations of the record of the inventory, we are of
opinion that the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical stocks
and book records were not material.
3. The Company has not granted or taken any loans, secured or unsecured, to
/from companies, firms or other parties covered in the register maintained
under Section
301 of the Act.
4. In our opinion and according to the information and explanations given
to us and having regard to the fact that some of the items purchased are of
a special nature in respect of which suitable alternative sources do not
exist for obtaining comparable quotations, there are adequate internal
control procedures commensurate with the size of the Company and the nature
of its business for the purchase of inventory and fixed assets and for the
sale of services. During the course of our audit, no major weaknesses have
been noticed in the aforesaid internal control system.
5.a) According to the information and explanations given to us, we are of
the opinion that the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to be
maintained under that section.
b) In our opinion, having regard to our comments in para 4 above and
according to the information and explanations given to us, the transactions
made in pursuance of such contracts or arrangements aggregating during the
year to Rs. 5,00,000 or more in respect of each party, have been made at
prices which are reasonable having regard to prevailing market prices at
the relevant time.
6. No deposits within the meaning of Section 58A and Section 58AA of the
Act and rules framed there under have been accepted by the Company.
7. The Company has an internal audit system commensurate with the size of
the Company and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Order of the Central Government under Section 209(1)(d) of
the Act and are of the opinion that, prima facie, the prescribed records
have been made and maintained. We are, however, not required to make a
detailed examination of the records with a view to determine whether they
are accurate or complete.
9.a) The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty,
Cess and other statutory dues applicable to the Company with appropriate
authorities. No undisputed amounts payable in respect of the aforesaid
statutory dues were outstanding as at the last day of the financial year
for a period of more than six months from the date they became payable.
b) According to the records of the Company, there are no dues of Income
Tax, Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess
which have not been deposited on account of any dispute except disputed
Electricity tax demand of Rs. 4.47 crore for financial year 2011-12 against
which the company`s application is pending before Department of Electrical
Inspectorate, Karnataka.
10. The Company has no accumulated losses as at 31st March, 2012 and it has
not incurred any cash losses in the financial year ended on that date or in
the immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders during the year.
12. During the year, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi /mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditor`s Report) Order 2003 is not applicable to the Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanations given
to us, the terms and conditions of the guarantees / securities given by the
Company for loans taken by others from banks and financial institutions are
not, prima-facie, prejudicial to the interest of the Company.
16. According to the information and explanations given to us, the term
loans were applied for the purpose for which they were obtained.
17. According to the information and explanations given to us and on
overall examination of the cash flow statements and balance sheet of the
Company, in our opinion, funds raised on short term basis have, prima-
facie, not been used for long term investment.
18. During the year, the Company has not made any preferential allotment of
shares to parties and companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
19. The Company has created securities in respect of debentures issued.
20. The management has disclosed on the end use of money raised by public
issues and the same has been verified by us.
21. During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations given
to us, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed of
such case by the management.
For LODHA & CO.
Chartered Accountants
A.M. Hariharan
Partner
Mumbai Membership No.38323
30th April, 2012 Firm Registration No. 301051E |