The Members of JSW Energy Limited
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of JSW Energy Limited
(the Company) which comprise the Balance Sheet as at 31st March, 2013, Profit
and Loss Statement and the Cash Flow Statement of the Company for the year then ended, and
a summary of the significant accounting policies and other explanatory information.
MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and cash flows of the
Company in accordance with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our
audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with the ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the Companys preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by the
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanations
given to us, the financial statements 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:
a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st
b. in the case of Profit and Loss Statement, of the profit of the Company for the year
then ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that
EMPHASIS OF MATTER
We draw attention to 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 the Honourable Supreme Court. Our report is not qualified
in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1 As required by the Companies (Auditors Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms of subsection
(4A) of section 227 of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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 purpose 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 those 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
comply with the Accounting Standards referred to in subsection (3C) of section 211 of the
Companies Act, 1956; and
e. on the basis of written representations received from the directors as on 31st
March, 2013 and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2013 from being appointed as a director in terms of clause
(g) of subsection (1) of section 274 of the Companies Act, 1956.
||For LODHA & CO.
||ICAI Firm Registration No. 301051E
||A. M. Hariharan
|Date: 3rd May, 2013
||Membership No. 38323
ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF THE COMPANY
FOR THE YEAR ENDED 31ST MARCH, 2013.
On the basis of such checks as we 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, thus it does not affect the going concern assumption.
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. a. The Company has granted an unsecured loan in kind (stock of coal) to a company
covered in the register maintained under section 301 of the Companies Act. Maximum amount
involved during the year Rs. 31.80 crore; year-end balance Rs. 31.80 crore.
b. According to the information and explanations given to us, we are of the opinion
that the rate of interest and other terms and conditions on which the loan has been
granted to the company are not, prima-facie, prejudicial to the interest of the Company.
c. According to the terms of arrangement, the company is regular in payment of interest
and the principal amount is not yet due for return.
d. There are no overdue amounts in respect of the said loan.
e. Other than above, the Company has not granted / taken any loan, 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, 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 5(a) 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. According to the information and explanations given to us and on the basis of our
examination of the records of the Company, 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
b. According to the information and explanations given to us and on the basis of our
examination of 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 those mentioned in the table below.
|Name of the statute
||Nature of dues
||Period to which it relates
||Amount (Rs. crore)
||Forum where dispute is pending
|Karnataka Electricity (Taxation on Consumption) Act, 1959
||Electricity Tax @
||Financial Year 2011-12
||Department of Electrical Inspectorate, Karnataka
|Income Tax Act, 1961
||Income tax and interest
||Financial year 2008-09 & 2009-10
||Commissioner of Income Tax (Appeals)
@ Excluding electricity tax leviable Rs. 76.49 crore [Refer Note 25(i)(a) Contingent
Liabilities other disputed tax matters].
10. The Company has no accumulated losses as at 31st March, 2013 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 (Auditors 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 statement and balance sheet of the Company, in our opinion,
funds raised on short term basis have, prima-facie, not been used for long term
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 Company has not raised any money by public issue during the year.
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.
||ICAI Firm Registration No. 301051E
||A. M. Hariharan
|Date: 3rd May, 2013
||Membership No. 38323