subsidiary companies of rrvunl€¦ · observations made by the statutory auditors on the accounts...

113

Subsidiary Companies

of

RRVUNL

CHHABRA POWER LIMITED(A wholly owned subsidiary of Rajasthan Rajya Vidyut Utpadan Nigam Ltd.)

7th ANNUAL REPORT

2012-2013

BOARD OF DIRECTORS

(As on AGM)

1. Shri N. M. Mathur, Chairman

2. Shri Shailendra Agarwal-IAS, Director

3. Shri B. S. Joshi, Director

AUDITORS

POONAM KOTHARI & CO.

Chartered Accountants

148, Dhandia House, Bullion Street,

1st Crossing, Haldiyon Ka Rasta,

Jaipur-303003

Ph. : 0141-2574573

BANKER

STATE BANK OF BIKANER & JAIPUR

REGD. OFFICE & HEAD OFFICE

VIDYUT BHAWAN

JANPATH, JYOTI NAGAR, JAIPUR-302005

Phone : 0141-2740381-2

Fax : 0141-2740633

Website : www.rajenergy.com

Contents

S. Particulars Page

No. Nos.

1. Director’s Report 87-88

2. Auditor’s Report 89-101

3. Annual Accounts 102-110

alongwith Significant

Accounting Policies & Notes

on Accounts

4. Cash Flow Statement 111

5. Comments of CAG 112

87

DIRECTOR’S REPORT

To the Members,

Your Directors are pleased to present the 7th Annual Report on the business and affairs of the Company together

with the Audited statement of Accounts for the financial year ended 31st March, 2013.

1. Financial Review

No commercial activity has been carried out during the financial year under review, however, the expenses/

income during the year has been charged to the Statement of Profit & Loss instead of to book under the

pre-operative Income/Expenses as the case may be which were being done earlier. The balances of pre-

operative Income/Expenses and preliminary expenses appearing in the Balance Sheet as on 01.04.2012

have been charged to the current year's Statement of Profit & Loss and the Company has incurred a loss

of Rs.2.55 lakhs.

As no profit was earned during the year, the Board is unable to recommend payment of dividend for the

year.

2. Share Capital

The Authorized Share Capital of the Company remains ̀ 1 Crore divided into 10,00,000 Equity Shares of

`10/- each. The paid-up Share Capital of the Company is 50,000 fully paid-up Equity Shares of ̀ 10/- each

aggregating to ̀ 5,00,000/- held by the holding company, Rajasthan Rajya Vidyut Utpadan Nigam, Ltd.

and seven other members as nominees of the holding company.

3. Directors

As per Articles of association of the Company, Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (RVUN),

being the Holding Company is empowered to appoint / replace / remove all Directors of the Company.

Shri N. M. Mathur has been appointed as the Director and Ex-officio Chairman of the Company on 4th

June, 2013 in place of Sh. P. N. Singhal, who ceases to be Director and Chairman of the Company. The

Board places on record its appreciation of the services of Sh. Singhal during his tenure.

During the period under review Sh. B. S. Joshi has been appointed as Director of the Company and Sh.

Naresh Pal Gangwar, IAS and Sh. M. C. Gaur ceased to be Directors of the Company.

4. Auditors

The Comptroller & Auditor General of India reappointed M/s Poonam Kothari & Co., Chartered Accountants,

Jaipur as the Statutory Auditors of the Company, for the financial year 2012-13. There are no comments/

observations made by the Statutory Auditors on the accounts of the Company for the financial year ended

31.3.2013. The report / comments of the Comptroller & Auditor General of India, if any, will be circulated

separately.

5. Public Deposits

The Company has not accepted any public deposits in terms of Section 58A of the Companies Act, 1956,

since its incorporation.

6. Director’s Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge

and belief confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed

by the Company;

ii) appropriate accounting policies have been selected and applied and such judgments and estimates

88

have been made that are reasonable and prudent so as to give a true and fair view of the state of

affairs of the Company as at end of financial year;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the

Company and for preventing and detecting fraud and other irregularities; and

iv) the annual accounts have been prepared on a going concern basis.

7. Disclosure of additional particulars under Section 217.

i) Since no commercial activity has been carried out by the Company during the financial year, there

are no particulars in respect of conservation of energy, technology absorption and foreign exchange

earnings & outgo.

ii) None of the employees of the Corporation is covered under the provisions of Section 217(2A) of

the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as

amended.

8. Acknowledgement

The Directors wish to place on record their appreciation of the support received from the Government of

Rajasthan, especially the Departments of Energy, Finance, etc. apart from the holding company, Rajasthan

Rajya Vidyut Utpadan Nigam Ltd.

On behalf of the Board of Directors

Place : Jaipur (N.M. Mathur)

Date : 26.09.2013 Chairman

89

POONAM KOTHARI & CO. 148, Dhandia House, Bullion Street,Chartered Accountants 1st Crossing, Haldiyon Ka Rasta, Jaipur-302003

Ph. : 0141-2574573E-mail : [email protected]

INDEPENDENT AUDITOR’S REPORT

TO

THE MEMBERS

CHHABRA POWER LIMITED

Report on the Financial Statements

We have audited the attached Balance Sheet of CHHABRA POWER LIMITED., JAIPUR as at 31st March,2013 and the Statement of Profit and Loss and also Cash Flow Statement for the year ended on that date annexedthereto and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of thefinancial position, financial performance and cash flows of the Company in accordance with the AccountingStandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibilityincludes the design, implementation and maintenance of internal control relevant to the preparation and presentationof the financial statements that give a true and fair view and are free from material misstatement, whether due tofraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. ThoseStandards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the management as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the said accountsread together with the Significant Accounting Policies and other notes thereon, give the information required by theCompanies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2013;

(ii) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(iii) In the case of Cash flow statement, of the Cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As the company is governed by the Electricity Act 2003, the provisions of that Act have prevailed wherever theprovisions of Companies Act,1956 are inconsistent with the said Electricity Act, 2003.

As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditor's Report)(Amendment) Order, 2004 (together the "order"), issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us, we enclose in the Annexure-I a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable.

90

As required by section 227(3) of the Act, we report that:

We have obtained all the information and explanations which to the best of our knowledge and belief were necessaryfor the purpose of our audit;

In our opinion, proper books of account as required by law have been kept by the Company, so far as it appearsfrom our examination of the books;

The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are inagreement with the books of account;

In our opinion, the Balance Sheet and Cash flow statement dealt with by this report comply with the accountingstandards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

As explained to us, being a Government Company, subsection (i) of section 274 of the Companies Act,1956 is notapplicable as per notification no. GSR 829(E), dated 21.10.2003.

For Poonam Kothari & Co.Chartered Accountants

(POONAM CHAND KOTHARI)Proprietor

Place : Jaipur M. No. 070433Date : 26th September, 2013 (FRN 000920C)

91



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN

DATE TO THE MEMBERS OF CHHABRA POWER LIMITED ON THE

FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31ST, 2013.

1) The Company has not purchased any fixed Assets therefore the clause relating to maintenance of record

and physical verification of fixed assets is not applicable

2) The Company has not so far made any purchases and does not possess any inventory therefore reporting

requirements regarding inventory are not applicable to the Company

3) As informed, the Company has not granted/taken any loans, secured or unsecured to companies, firms or

other parties\ covered in the register maintained under section 301 of the Companies Act, 1956 and / or the

companies under the same management as defined in sub section 1 (B) of section 370 of the companies

act 1956. Accordingly, paragraphs (iii) (b), (c), (d), of the Companies (Auditors Report) Order 2003 are

not applicable.

4) The Company has not started its operations and has not made any purchases so far Therefore reporting

requirements regarding adequacy of internal control procedures are not applicable to the company.

5) According to the information and explanations given to us, in section 301 of the Companies Act 1956 that

need to be entered in the register required to be maintained under that section.

6) The company has not accepted any deposits from the public within the meaning of Sections 58A and

58AA of the Act and the rules framed there under.

7) As explained to us , the Company has no Formal internal audit system as there is no business activities

during the year however company has an internal check system on the transactions during the year

commensurate with the size and nature of its business

8) We have broadly reviewed the books of account maintained by the company in respect of products where,

pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been

prescribed under clause (d) of sub-section (1) of Section 209 of the Act and the company has not started

its operations therefore requirements of maintenance of cost records for the company is not applicable.

9) Since the company has not started any operations, therefore reporting requirements regarding deposit of

undisputed statutory dues in respect of provident fund, employee state insurance dues , investor education

and protection fund, wealth tax, service Tax, sales tax , custom duty, excise duty and cess and other

material statutory dues are not applicable. Company is regular in paying the dues of income tax. No

disputed amount payable in respect of aforesaid dues were outstanding as at 31/03/2013 for the period of

more than 6 months from the date they become payable.

10) The Company has no accumulated losses as at 31st March 2013 and it has not incurred any cash losses

during the financial year covered by our audit or in the immediately preceding financial year.

11) In our opinion and according to the information and explanations given to us, the Company has not taken

any loan from any financial institution/ bank or debenture holders hence the clause of reporting of default

in repayment of dues from aforesaid are not applicable on the company.

12) According to the explanation given to us, we are of the opinion that the company has not granted any

loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

92

13) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the

provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable

to the Company.

14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments.

Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended)

are not applicable to the Company.

15) According to the information and explanations given to us, and the representation made by the management,

the Company has not given guarantee for loans taken by others from bank or financial institution that are

prejudicial to the interest of company.

16) In our opinion, and according to information and explanations given to us, company has not raised any

term loans hence this clause is not applicable on the company.

17) According to the information and explanations given to us and on an overall examination of the balance

sheet of the Company, there are no funds raised on short-term basis and no long term fund have been used

to finance short assets except permanent working capital.

18) According to the information and explanations given to us, the company has not made preferential allotment

of shares to parties and companies covered in the register maintained under section 301 of the Act.

19) According to the information and explanations given to us, during the period covered by our audit report,

the Company has not issued any debentures.

20) The Company has not raised any money by way of public issue during the year.

21) During the course of our examination of the books of accounts 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 Poonam Kothari & Co.


(POONAM CHAND KOTHARI)

Proprietor

Place : Jaipur M. No. 070433

Date : 26th September, 2013 (FRN 000920C)

93

S.No. Comments on :

(I) Corporate Governance and Audit Committee

(1) Whether the Company has been listed on the stock exchanges? If Yes, the No

names of the stock exchanges may please be indicated ? If so, whether the

provisions of listing agreement of SEBI are being followed by the Company?

(2) Whether the company has 50% independent directors on their Board as No, SEBI guidelines are

required under SEBI guidelines. not applicable since its

shares are not listed on

stock exchange.

(3) Whether the company has formed an Audit Committee in compliance with Yes, Audit Committee

Section 292 A of the Companies Act, 1956. If not then indicate the extent Formed

of non-compliance?

(4) Whether The Audit Committee has discussed the qualification made in the Yes

Auditor's report as well as important comments, audit paras of Government

Audit and has given recommendations for taking appropriate corrective

action in the next year's accounts.

(5) Whether the Audit Committee has examined the replies to paragraphs, mini Yes

reviews, sectoral reviews, comprehensive appraisals, etc. included in various

Audit reports of the C&AG before their submission to Government Audit/

Committee on public Undertakings.

(6) Whether the Audit Committee has reviewed and discussed with the No such review required

Management, and the internal and external auditors, the adequacy and as the company is not

effectiveness of the accounting and financial controls, including the doing any business

Company’s financial and risk management policies? transactions.

(7) Whether the BOD has reported in the Director's Report to the shareholders Yes

compliance to their responsibility statement under section 217(2AA) of the

Companies Act, 1956.

(8) Whether CEO/CFO certificate has been obtained in terms of listing NA

agreement?

(II) Business Risk

(1) Any new Statutory or Regulatory requirement or change in Govt. policy that No, such requirement has

could impair the financial stability or profitability of the entity. come to our notice

(2) Unusually raipd growth if any, especially compared with that or other No, statutory company

companies in the same industry. being in the field, not

applicable.

(3) The process used for indentification of business risks and steps taken to No commercial activity

mitigate it by the management. carried out by the

company hence no such

process is in operation.

(4) Unrealistically aggressive sales or profitability incentive programs, if any NA

(5) The system of making a business plan, short term/long term & reviews of NA

the same vis-a-vis the actual?

(6) The capital expenditure/capital invested not put to use NA

(7) The cost benfit analysis of major capital expenditure/expansion including NA

IRR any pay back period

(8) The existence of Macro, Sector and operation threats that could drive NA

fundamental changes in business model. Indicate in brief

AUDIT REPORT OF M/S CHHABRA POWER LTD.

UNDER SECTION 619(3) (a) OF THE COMPANIES ACT, 1956, 31.03.13

94

(III) Disinvestments (If applicable)

(1) What is the mode of disinvestments (i.e. Trade sale, Management & NA

Employees buy out, Mass privatization, Public auction, Flotation,

Liquidation, Private placement)

(2) What is the present stage of disinvestment process? NA

(3) If the company has been selected for disinvestment, please report NA

(a) Has the Company accounted for all its assets (including intangible Yes

assests), liabilities, income and expenditure as per the requirement of

relevant Accounting Standards and nothing is left out of books?

(b) Whether the assets of the company, especially land, valued at nominal NA

cost has Been revalued keeping in view the fair market rate for

consideration of the net worth of the Company for the purpose of sale?

(c) Whether the committed reserve and general reserves created over the NA

years are disclosed distinctly? If utilization of general reserves is

substantial, specify the conditions of utilization and whether these

conditions are covered under the byelaws/articles of the company and

provisions of the Company Act, 1956?

(d) Whether any investment was made by the company during the process NA

of disinvestment? If so; whether such investment were in the interest of

the company or did they have the effect of extending undue advantage

to the Bidders?

(IV) System of Accounts & Financial Control

(1) Whether the allocation of duties and responsibilities including the delegation The company still not

of powers at, various levels of management is fair/proper/justifiable and the come into production as

same have been adequately defined? such duties and

responsiblities including the

delegation of powers at

various levels of

management, not required

(2) Examine the systems of accounts & Financial Control being followed by the The company is

company and give your views as regards their deficiencies along with maintaining its

suggestions for remedial measures? computerized Accounts

on mercantile basis.

(3) Please report which of the accounting policies adopted by the Company are Accounts policies are

not in conformity with the accounting policies applicable to the industry/ generally in conformity

companies in the same sector, particularly the Government Companies. with the according

What is the impact of such policies on the accounts? standards.

(4) Notes to Accounts, qualifications in Auditor’s Report and comments of the Yes C&AG reviewed the

C&AG may be reviewed for the last 3 years and state whether the accounts of 08-09 &

management has taken rectificatory action? taken appropirate action.

(5) Whether the Company has a clear credit policy, policy for providing for NA

doubtful debts/write offs & liquidated damages? Analyse the resons such as

non-completion of performance tests, litigation, retention sale, etc, for

significant sundry debtors and reports thereon

(6) Please report whether the system of giving discount to promote sales is fair? NA

Whether the instructions for allowing discount are issued in writing and

communicated properly to sales outlets?

(7) Examine and indicate whether the company has a system of monitoring the NA

timely recovery of outstanding dues? Highlight the significant instances of

failure of the system, if any.

(8) What is the system of obtaining confirmation of balances from debtors/ Only holding comp.

95

creditors and other parties? Indicate separately the amount of balances balances appearing.

remained unconfirmed from Government Department/PSUs and Private

parties and their percentage to total amount under each head.

(9) Please report whether there are any cases of waiver of debts/loans/interest No such cases came to

etc. if yes, the reasons therefore and the amount involved. our notice.

(10) Is there an adequate system of timely lodging of claims with outside parties? No such cases reported.

Whether the claims are properly monitored?

(11) Whether the credit obtained (including overdrafts) is monitored regularly and NIL

the terms of loans are not such that they have a negative impact on the

earnings of the company. Examine the system of effective utilization of

loans, & the system of obtaining statutory benefits.

(12) Whether any incidence involving improper use or wastage of funds noticed. No such cases has come

to our notice as the

company has not carried

out any production

activity.

(13) Examine and comment upon the reasonableness of assumptions made by NA

the Actuary in providing for Employee benefits as per Accounting standard 15.

(14) Whether work flow and documents flow is in place to ensure proper controls No, as the company is

and systems commensurate with the delegation of work? not carried out any

production activity.

(V) Fraud/Risk

(1) Whether the company has an effective delineated fraud policy consitent with We have not seen any

regulatory requirements as well as the entity’s business needs? such policy.

(2) Whether the Company has formulated ‘code of conduct’ for senior We have not seen any

management? separate code as such.

(3) How the company has dealt with reported frauds and what are the remedial No, as the company is

measures taken for preventing recurrence ? not carried out any


(4) Are there any cases of violation of delegated Financial Powers during the No

period under report, Which warrants “In-dept audit”? If yes please give a

list of such cases.

(5) Does the company have separate Vigilance Department/ Wing? To what No, as the company is

extent is it effective in its duty and whether its reports are submitted to the not carried out any

board? production activity.

(6) Whether the Management has designed and put in place an adequate To our knowledge, no

Prevention and Detection Controls to prevent, reduce and discover the such formal controls are

fraud and other irregularities? in place

(7) Whether the Company has whistle blowing policy? No

(8) Whether the fraud policy has been periodically reviewed and evaluated to We have not come across

determine whether it was designed and implemented to achieve optimal any such policy.

effectiveness?

(VI) Assets (Including inventory)

(1) What is the position regarding maintenance of records such as fixed assets No Fixed Assets created

register, etc? so far

(2) Whether the company has prescribed the following in regard to the NA

management of stores.

(a) Maximum and minimum limits of stores and spares etc. NA

(b) Economic order quantity for procurement of stores. NA

96

(3) Whether ABC analysis has been adopted to control the inventory? If not, NA

impact on inventory may be analysed.

(4) Whether regulations made for the purpose of control over stores, including NA

stock taking and valuation of stock, stores & work-in-progress at the end of

the financial year are adequate and duly enforced?

(5) Whether the work in progress contains any item, which has remained under NA

work in progress, for an unduly long time? Attach a list of such items

indicating amount, period of pendency and reasons.

(6) Examine and comment on the system of physical verification, valuation, NA

treatment of non-moving & slow moving items, their disposal & abnormal

excess & shortages in respect of closing stock items.

(7) Examine and comment on the system of valuation of fixed assets, survey-off NA

procedure & provisions of assets & specific capital spares surveyed-off.

(8) List out the surplus/obsolete/non-moving items of stores, raw material, NA

finished goods lying unused at the end of last 3 years.

(9) Whether proper records are maintained for inventories lying with third parties NA

& assets received as gift from Govt. or other authorities?

(10) Are there any lapses in the internal control system right from ordering till the NA

consumption of stores? If yes, the same may be highlighted.

(11) List out the assets and Plant & Machinery items, which have not been in use NA

over a considerable period of time (say 5 years) and the reasons thereof.

(12) Whether there are instances of huge losses incurred due to sale goods at No

prices lower than the prevailing market prices, citing poor quality as a reason,

immediately subsequent to the balance sheet date?

(13) Whether the norms for storage losses have been fixed? What is the basis on Not applicable.

which storage losses are regularized? Indicate the abnormal storage losses

suffered during the year under audit and amount realized there against.

(14) Demurrage/Wharf age incurred during the year and reasons therefore. NIL

(15) Whether the company has conducted physical verification of Fixed Assets No fixed asset so far

during the year and a formal report is being prepared for the same? created.

(16) Whether there is a policy to review and Implement impairment of assets? NA

(VII) Investment

(1) Whether the company has laid down an investment policy duly approved by NA

the competent authority? If yes, please indicate the following.

(a) Is it in accordance with the provisions of Section 292 of the Companies NA

Act, 1956 and other laws, rules and regulations, Government directives

applicable to the company?

(b) Whether investment made were judicious and in accordance with the NA

investment policy?

(c) Is the shortfall in Market value of the current investment and permanent Not applicable.

diminution in the value of long -term investment reflected in the books?

If not, describe the failures.

(2) Whether the deposits with bank/financial institutions and other have been in Yes, Deposit of NSC were

accordance with laws, rules regulations, Government directives, etc as in the personal name of

applicable. Jaipur discom AO Who

has been retired now.

(3) Whether there has been grant of large loans to or placement of deposits with No as the company is

other PSUs or enterprises not related with the business of the Company. not carried out any


97

(4) Whether the company significant investment in an industry or product line No

noted for rapid change?

(5) Whether the investment made in the subsidiaries have been valued properly Not applicable.

keeping in view the financial position of the subsidiary? If not, extent of

diminution in the value of investments.

(6) Whether any surplus funds are invested? Is there any effect on availability Presently no vigilance

of funds for working capital because of investments leading to borrowings department.

at higher rates?

(7) How often Market value is reviewed and whether profits are made on sale NA

of investments?

(VIII) Liabilities and Loans

(1) Give the total amount of loans (including interest, penal interest & NIL

commitment charges separately) where defaults were made in repayment as

at the end of the accounting period.

(2) Whether guarantee fee payable to the Govt. of India as per terms of loan There were no such

agreement has been accounted for properly? cases.

(3) Whether any part or whole of the loans from Government and/or interest No.

accrued thereon have been either converted into equity or waived by the

Government. If so, its impact on the financial position of the Company.

(4) Are the terms of the loan agreements such that they make the entity No.

especially vulnerable to changes in the interest rates?

(5) Check the loan profile of the Company to find out whether the high cost No such cases have

debts were swapped with low cost market borrowings. come to our notice.

(6) Whether there have been receipts of large loans from other PSU’s or No.

enterprises not related with the business of the company.

(7) Whether any study was conducted to avail any other instruments or No, as there was no

derivatives instead of high cost loans? need for the same.

(IX) Award & Execution of Contract

(1) Whether company devised a proper system of tendering for awarding of Yes

various contracts?

(2) Whether the company has an effecient system for monitoring and adjusting Yes

advances to contractors/suppliers.

(3) Whether the company has settled all the issues viz. Performance Guarantee No such cases have

(PG) Tests, recovery of Liquidity Damages (LDs), and final payment etc. come to our notice.

soon after the commissioning of the Project? Are there any cases of

inordinate delay without sufficient justification?

(4) Whether there are any disputes/claims unsettled for long time? No

(5) What is the procedure followed by the company for purchasing proprietary No, as the company is

items? What is the procedure for ascertaining the authenticity of Propriety not carried out any

items certificate given by an official based on which tendering is not resorted production activity.

to and goods are purchased from a particular supplier?

(X) Costing Systems

(1) Whether the Company has any cost policy? Not applicable in view

of the no operations

carried out.

(2) Are the cost accounts being reconciled with financial accounts? Not applicable in view of

the no operations carried

out.

(3) Whether the company is computing the cost of major operations, jobs, Not applicable in view of

products, processes and services regularly? If not, describe the failures. the no operations carried

out.

98

(4) Whether the company has an effective system for identification of idle Not applicable in view of

labor-hours and idle machine-hours? no operations carried

out.

(5) Was cost audit ordered in the case of the company? If so, highlight the No

major deficiencies pointed out in the latest cost audit report.

(6) Examine the accounting treatment of rejects & scraps for determination of Not applicable.

cost of production state the impact of bye products and joint products in

determining costs.

(7) Whether there is any system to evaluate the abnormal losses and taking Not applicable.

remedial measures to control such losses?

(8) What is the method being followed by the company to charge overheads? Not appliable.

How is the overhead rate being arrived at ? In case of cost plus contracts,

are the overheads being recovered completely or not?

(XI) Internal Audit System

(1) Whether the compay is having internal audit section manned by staff of No Internal audit in view

their own or whether the company has hired the services of CAs of internal of no operations carried

Auditors? Give your comments on the internal Audit System stating whether out.

its reporting status, Scope of work, level of competence. Etc, are adequate?

If not, describe the shortcomings thereof. Is there an adequate compliance

mechanism on internal audit observations.

(2) Whether internal audit standards/manual/guidelines have been prescribed No

and they are in practice?

(3) Whether Internal Audit Reports were discussed by Audit Committee. Yes

(4) Whether internal audit is independent and reports directly to the Chairman/ No, as the company is

head of the company? not carried out any


(5) If internal audit is outsourced then whether the selection process is fair and NA

transparent?

(6) Whether entities which are not under the jurisdiction of the professional No

institute are being given the work of internal audit?

(7) Does the internal Audit report contain any serious irregularity which needs No

immediate attention of management/Government?

(8) What is the total impact of all shortcomings/deficiencies pointed out in the No, as the company is

latest internal Audit Report and pending for compliance as on date? not carried out any


(9) Whether mistakes/shortcomings pointed out in the latest report is of the No, as the company is

same kind/type as pointed out in earlier reports? not carried out any


(XII) Legal/Arbitration Cases

(1) Number of pending legal, arbitration cases indicating the age-wise analysis No, in view of no

and reasons for their pendency. operations carried out

(2) Details of new cases and cases settled during the year. No

(3) Whether any norms/procedure exist/proposed to be laid down for large legal NA

expenses (Foreign & Local) Incurred/to be incurred.

(4) Is there any system to ensure proper documentation (like maintaining No

minutes of the meetings. Foreseeing contingencies, foreign exchange

fluctuations etc.) before agreement with foreign parties as well as Indian

parties?

99

(XIII) EDP Audit

(1) Whether the organization has an approved IT strategy or Plan? No

(2) If the auditee has computerized its operations or part of it, assess and report, The Auditee has

how much of the data in the company is in electronic format, which of the computerized only its

major areas such as financial accounting, sales accounting, personnel Financial Accounts.

information, Payroll, Materials, inventory management etc. have been

computerized.

(3) Indicate how this impacts on your work of auditing and Accounts and NA

whether your Audit is through or around the computer.

(4) Has the company evolved proper security policy for Data/software/hardware? No, Accounts are being

maintained in Tally

Software.

(5) Identify the areas in which the auditor is of the view that the built-in-checks No, Accounts are being

and validation in the computer environment are not adequate or were not maintained in Tally

being exercised with proper authority? Software.

(6) Comment on any problem faced in extracting information from computer No, Accounts are being

files, due to lack of backup of past records or due to record corruption. Is maintained in Tally

there a document retention policy? Software.

(7) Whether any software is unutilized or underutilized due to lack of trained No

staff or any proper operating manual/documentation etc.

(8) Comment whether changes made in software have the approval of NA

management and the same has been documented properly and the lead

time given to the staff to get accustomed to it before making it fully

operation?

(9) Whether the BOD is briefed regularly about the new IT strategy, if any NA

proposed to be incorporated for the company as a whole, for which large

funds are sanctioned. This is particularly relevant to organization where the

entire IT activity is to be made online in due course.

(10) Whether the systems department is responsible for both hiring/buying EDP NA

equipment Hardware & Software and also certifying their ‘usability’ before

final payment (both function should be separate with the user departments

involved in the latter)

(11) Whether the company has detailed/comprehensive list of all reports/ No

statements which can be generated by the system in use?

(12) Whether there is an effective IT steering Committee? No

(13) Whether there exists effective disaster recovery plan for EDP Department No

which is periodically reviewed and evaluated?

(14) Whether any of the findings and recommendations noted in the EDP Audit No

Report was considered significant and whether the issues were satisfactorily

resolved?

(XIV) Environmental Management

(1) Compliance of the varoius pollution control acts and the impact thereof and No in view of no

policy of the company in this regard may be checked and commented upon operational activity

carried out.

(XV) Corporate Social Responsibility

(1) How is the company discharging its Corporate social responsibility? We have not come

across any such agenda

as such have no

comments to offer.

100

(2) Whether any Board approved policy is in place and is being properly No

followed?

(3) Whether there is a system of fixation of targets for CSR activities. No

(4) Whether adequate mentoring mechanism exists for implementation of CSR No

activities.

(XVI) General

(1) Indicate whether the company has entered into a memorandum of The Company has not

understanding with its administrative ministry? If yes, have the targets in entered into MOU with

MOU been split unit-wise? If so, attach a unit-wise statement of targets and its Administrative

achievements against the parameters in MOU. Ministry.

(2) Whether contribution of employer and employee to provident fund is kept NA

separately out of business and proper safeguard of the same is taken care of?

(3) Does the company present a case for energy audit? If yes, has the audit No in view of no

been conducted by a specialised agency? operational activity.

(4) Where land acquisitions is involved is setting up new projects an enquiry as NA, as the company is

to whether settlement of dues and rehabilitation of those affected are being not carried out any

done expeditiously and in a transparent manner to ensure that the benefits production activity.

go to the really affected people and is not diverted to agents and

intermediaries including political parties.

(5) Whether the company has done any mergers and acquisitions during the No

year? Whether a through need analysis was done before Merger or

acquisition? Whether shareholders acceptance was taken before decision on

merger/acquisition was arrived at? What was the impact thereof on the

profitability of the Company?

If test checking was applied by statutory auditors, the manner in which areas of checking have been identified

may be specified. Extent of sample selected and methodology of sampling adopted may also be specified.






101



COMPLIANCE CERTIFICATE

We have conducted the audit of accounts of CHHABRA POWER LIMITED for the year ended

31.03.2013 in accordance with the directions / Sub directions issued by the C&AG of india under section 619(3)(a)

of the companies Act 1956 and certify that we have complied with all the directions / sub directions issued to us.




Proprietor



102

I. EQUITY AND LIABILITIES

(1) Shareholders’ Funds

(a) Share Capital 2 5,00,000 5,00,000

(b) Reserves & Surplus 3 -2,54,666 -

(2) Current Liabilities

(a) Other Current Liabilities 4 26,726 18,793

(b) Short-term Provisions 5 - -

TOTAL 2,72,060 5,18,793

II. ASSETS

(1) Non-current Assets

(a) Long Term Loans and Advances 6 50,333 46,535

(b) Other Non-Current Assets 7 - 2,38,338

(2) Current Assets

(a) Cash and Cash Equivalents 8 10,014 11,207

(b) Short Term Loans and Advances 9 - -

(c) Other Current Assets 10 2,11,713 2,22,713

TOTAL 2,72,060 5,18,793

Significant Accounting Policies 1

Other Disclosure & Notes onFinancial Statements 16

As per our separate report of even date For and on behalf of the Board of Directors

For POONAM KOTHARI & CO. (N.M. MATHUR)

Chartered Accountants Chairman

FRN 000920C

(POONAM CHAND KOTHARI) (B.S. JOSHI)

Proprietor Director

M.No. 070433

Place : Jaipur

Date : 26th September, 2013

BALANCE SHEET AS AT 31st MARCH, 2013

(Amount in ` )

Particulars Note As at As at

No. 31st March, 2013 31st March, 2012

103

I. Revenue :

(1) Other Income 11 3,798 -

TOTAL 3,798 -

II. Expenses :

(1) Finance Costs 12 550

(2) Administrative and Other Expenses 13 18,933

Total Expenses 19,483 -

Profit before Prior Period Items and Taxes -15,685 -

Prior Period Expenses 14 -2,38,981 -

Profit beforeTaxes -2,54,666 -

Tax Expenses :

Current Tax - -

Income Tax (Earlier Year Tax) - -

Deferred Tax - -

PROFIT FOR THE YEAR -2,54,666 -

Earnings Per Equity share of Par Value 15of Rs.10/- Each

(1) Basic & Diluted -5.09 -

Significant Accounting Policies 1

Other Disclosure & Notes onFinancial Statements 16




FRN 000920C


Proprietor Director

M.No. 070433

Place : Jaipur


STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED 31st MARCH, 2013

(Amount in ` )

Particulars Note For the year ended For the year ended


104

NOTE NO. 1 : SIGNIFICANT ACCOUNTING POLICIES

1. Basic Accounting Policy

1.1 Basis of Accounting

a) The financial statements of the Company have been prepared under historical cost convention and in

accordance with the generally applicable Accounting Standards (AS) notified under Companies (Accounting

Standard) Rules, 2006, the applicable provisions of Electricity Act, 2003 and generally accepted accounting

principles as adopted consistently by the Company.

b) The Company generally follows Mercantile System of Accounting and recognizes significant items of income

and expenditure on accrual basis.

1.2 General

a) Except wherever stated Accounting Policies are consistent with the generally accepted accounting principles

and have been applied.

b) No business was transacted during the year. Only General Administrative expenses and Incomes have been

charged to the Statement of Profit & Loss.

105

*Figures in Bracket are of Previous Year.

The Company has only one class of shares referred to as equity shares having a par value of ̀ 10. Each holder of

equity shares is entitled to one vote per share and dividend as and when declared by the Company.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the

remaining assets of the company, after the distribution of all preferential amounts.

1 Authorised Capital

10,00,000 Equity Shares of ` 10/- each 1,00,00,000 1,00,00,000

2 Issued, Subscribed and 54.600 5,00,000 5,00,000

Paid up Capital

50,000 Equity Shares of

` 10 /- each fully paid up (50,000)

TOTAL 5,00,000 5,00,000

NOTES ON FINANCIAL STATEMENT

SHAREHOLDER’S FUNDS

NOTE NO. 2 : SHARE CAPITAL(Amount in ` )

S. Particulars Account As at As at

No. Code 31st March, 2013 31st March, 2012

1 Shares outstanding at the beginning of the year 50,000 50,000

2 (+) Shares Issued during the year - -

3 (-) Shares bought back during the year - -

4 Shares outstanding at the end of the year 50,000 50,000

(i) Reconciliation of the number of shares outstanding

S. Particulars As at As at


1 Rajasthan Rajya Vidyut Utpadan Nigam Limited

& its Nominees (Holding Company) 50,000 50,000

% of Holding 100.00% 100.00%

(ii) Details of Shares in the company held by each shareholder holding more than 5

percent shares

S. Name of Shareholder As at As at


No. of Shares held No. of Shares held

106

1 Expenses Payable 46.430 26,726 18,793

Total 26,726 18,793

CURRENT LIABILITIES

NOTE NO. 4 : OTHER CURRENT LIABILITIES(Amount in ` )



1 Provision for Income Tax 46.800 - -

Total - -

NOTE NO. 5 : SHORT TERM PROVISIONS(Amount in ` )



1 Security Deposit with C.T.O.(NSC) 28.915 34,000 34,000

2 Income Accrued but not due 28.310 16,333 12,535

(NSC Interest)

Total 50,333 46,535

NON-CURRENT ASSETS

NOTE NO. 6 : LONG TERM LOANS AND ADVANCES(Amount in ` )



Opening Balance 58.210 - -

Add:- Net Profit after tax transferred -2,54,666 -

from Statement of Profit & Loss

Closing Balance -2,54,666 -

NOTE No. 3 : RESERVES & SURPLUS(Amount in ` )



107

1 Preliminary Expense not yet 17.225 2,17,153 - 2,17,153 -

written-off

2 Pre-Operative Expenses 18.000 1,12,056 - 1,12,056 -

3 Less:-Pre-Operative Income 18.100 90,871 - 90,871 -

TOTAL 2,38,338 - 2,38,338 -

(i) Details of Miscellaneous Expenditure to the extent not written off

(Amount in ` )

S. Particulars Account Balance Addition Deduction Balance

No. Code As At during during As At

1st April 2012-13 2012-13 31st March

2012 2013

1 Miscellaneous Expenditure to the 17.225 - 2,38,338

extent not written off to 18.100

[see Descriptive Note (i)]

Total - 2,38,338

NOTE NO. 7 : OTHER NON-CURRENT ASSETS(Amount in ` )



1 Balance with Bank in Current 24.401 10,014 11,207

Account with SBBJ, Jaipur

Total 10,014 11,207

CURRENT ASSETS

NOTE NO. 8 : CASH AND CASH EQUIVALENTS(Amount in ` )



1 Income Tax Receivables (T.D.S) 28.311 - -

Total - -

NOTE NO. 9 : SHORT TERM LOANS AND ADVANCES(Amount in ` )



108

1 Amount Receivable from RRVUNL 28.940 2,11,713 2,22,713

Total 2,11,713 2,22,713

NOTE NO. 10 : OTHER CURRENT ASSETS(Amount in `)



1 Income on Govt. Securities (NSC Interest) 62.220 3,798 -

Total 3,798 -

NOTE NO. 11 : OTHER INCOME(Amount in

`

)

S. Particulars Account For the year ended For the year ended


1 Other Bank Charges 78.883 550 -

Total 550 -

NOTE NO. 12 : FINANCE COSTS(Amount in

`

)



1 Audit Fees 76.122 15,000 -

2 Consultancy Expenses 76.123 3,933 -

Total 18,933 -

NOTE NO. 13 : ADMINISTRATIVE AND OTHER EXPENSES(Amount in

`

)



a) For Audit fees to Statutory Auditors 15,000

13.1 Details of remuneration to Auditors :

S. Particulars Current Year

No.

(Amount in

`

)

109

Income relating to Previous year:-

1 Prior Period Income-Others 65.900 90,228 -

Sub Total 90,228 -

Prior Period Expenses/Loss:-

1 Prior Period Expenses- Admn. Expenses 83.820 3,29,209 -

Sub Total 3,29,209 -

Total -2,38,981 -

NOTE NO. 14 : PRIOR PERIOD ITEMS(Amount in

`

)



1 Net Profit after tax as per Statement of ` -2,54,666 -

Profit and Loss attributable to Equity

Shareholders (a)

2 Weighted Average numbers of

equity shares used as denominator for

calculating EPS (b) No. 50,000 50,000

Earning Per Share (EPS) ` -5.09

Face Value per Equity Share ` 10 10

NOTE NO. 15 : EARNINGS PER EQUITY SHARE (EPS) AND DILUTED EPS

S. Particulars Unit For the year ended For the year ended


110

NOTE NO. 16 :

OTHER DISCLOSURES AND NOTES ON FINANCIAL STATEMENTS

16.1 The company is a wholly owned subsidiary of M/s Rajasthan Rajya Vidyut Utpadan Nigam Limited and the

same was incorporated on 22.11.2006 under the Companies Act, 1956, pursuant to a decision taken by

the Board of Directors of RVUN, in its 111th meeting held on 07.10.2006, for taking up the ongoing

greenfield power project being setup by RVUN namely Chhabra Coal based Thermal Power Project

stage-I (2x250 MW).

16.2 The Statement of Profit & Loss has been prepared from the current year. However, no business was

transacted by the company during the year. The Expenses/Income during the year has been charged to the

Statement of Profit & Loss instead of to book under the Pre-operative Income/Expenses as the case may be

which were being done earlier as per policy of the company. The policy regarding amortisation of Preliminary

Expenses in five years from the year the company starts transaction of business has been changed from the

year 2012-13. Accordingly, the balances of Pre-operative Income of Rs. 90,871/-, Pre-operative Expenses

of Rs. 1,12,056/- and Preliminary Expenses of Rs. 2,17,153/- appearing in the Balance Sheet as on

01.04.2012 have been charged to the current year's Statement of Profit & Loss as Prior Period Income/

Expenses and consequent thereto, profit and non-current assets of the company for the year ended 31.03.2013

have been reduced.

16.3 As no any business was transacted during the year, so provision for deferred tax assets / deferred tax liability

pursuant to AS-22 "Accounting for Taxes on Income" has not been made by the company.

16.4 The company has no contingent liability as on 31.03.2013.

16.5 There is no estimated liability in respect of capital contract / commitment to be executed.

16.6 No employee of the Company whether employed for whole or part of the year was in receipt of remuneration

amounting to Rs. 3,00,000/- or more per annum or Rs. 25,000/- per month or more.

16.7. Details of remuneration to Auditors : Current Year Previous Year

(Amt. in `) (Amt. in `)

-------------------- --------------------

For audit fees to Statutory Auditors 15,000* 11,000*

(* including service tax)

16.8. a) No expenditure in foreign currency was incurred during the year.

b) No earning in foreign exchange was accrued during the year.

16.9 The figures in the bracket represent previous year figures.

16.10 The figures of the current year & previous year have been rounded off to nearest rupee wherever considered

necessary.

16.11 The figures of the previous year have been reclassified, regrouped and rearranged, wherever considered

necessary, to make them comparable with the current year's figure to comply with the requirement of

Revised Schedule VI.




FRN 000920C


Proprietor Director

M.No. 070433

Place : Jaipur


111

CASH FLOW STATEMENT 2012-13

Inflow (Outflow)(Amount in ` )

S.No. PARTICULARS Current Year Previous Year

Net Profit before taxation -2,54,666 0

Adjustments

Add:- Depreciation 0 0

Adjusted profit for the year -2,54,666 0

(A) Cash Flow from Operating Activities

1 Other Current Assets 11,000 17,085

2 Non-Current Assets -3,798 0

3 Current Liabilities and Provision 7,933 -4,864

4 Misc. Expenditure to the extent not written off / adjusted 2,38,338 -12,771

Net Cash Flow from Operating Activities -1,193 -550

(B) Cash Flow from Investing Activities

Cash used in Investing Activities 0 0

(C) Cash Flow from Financial Activities

Net Cash surplus from Financing Activities 0 0

(D) Net increase (Decrease) in Cash & Cash Equivalent (A+B+C) -1,193 -550

(E) Opening Cash & Cash Equivalent 11,207 11,757

(F) Closing Cash & Cash Equivalent 10,014 11,207




FRN 000920C


Proprietor Director

M.No. 070433

Place : Jaipur


112

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER

SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF

CHHABRA POWER LIMITED, JAIPUR FOR THE YEAR ENDED 31st MARCH, 2013.

The preparation of financial statements of Chhabra Power Limited, Jaipur for the year ended 31st March,

2013 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the

responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor

General of India under Section 619(2) of the Companies Act, 1956 are responsible for expressing opinion on these

financial statements under section 227 of the Companies Act, 1956 based on independent audit in accordance with

the auditing and assurance standards prescribed by their professional body, the Institute of Chartered Accountants

of India. This is stated to have been done by them vide their Audit Report dated 26th September, 2013.

I, on behalf of the comptroller and Auditor General of India, have decided not to review the report of the

Statutory Auditors on the accounts of Chhabra Power Limited, Jaipur for the year ended 31st March, 2013 and as

such have no comments to make under section 619(4) of the Companies Act, 1956.

For and on behalf of the Comptroller

and Auditor General of India

(S. Alok)

Accountant General

Place : JAIPUR (Eco. & Rev. Sector Audit)

Date : 15th October, 2013 Rajasthan, Jaipur

subsidiary companies of rrvunl€¦ · observations made by the statutory auditors on the accounts...

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