1. We have audited the attached Balance Sheet of DLF Power Limited, as at 31st March 2004, the Profit & Loss account 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.
We conducted our audit in accordance with the 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.
2 As the company is governed by the Electricity (Supply) Act, 1948, the provisions of the said Act have prevailed wherever the are inconsistent with the provisions of the Companies Act, 1956.
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, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(i) 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;
(ii) In our opinion, proper books of account, as required by law, have been kept by the company so far as it appears from our examination of the books;
(iii) The Balance Sheet, Profit & Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit & Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, as on 31st March 2004, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2004 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) (a) As stated in note 4 of schedule 11, revenue from power supply is on the basis of Company’s Invoices /claims raised in terms of Power Purchase Agreements. In respect of Invoices / claims aggregating Rs. 12067.76 lacs (previous year Rs. 13529.47 lacs) outstanding as at the year end and included under sundry debtors in Schedule –5, we are unable to comment on the adjustments, if any, required, pending final acceptance thereof by the customers, as these cannot be determined at this stage.
(b) Sundry Debtors includes Rs.1039.80 lacs (previous year Rs. 1287.90 lacs) pertaining to Energy Systems Division in respect of which we are unable to comment on the recoverability or otherwise thereof due to non receipt of outstandings from clients.
(vii) Subject to our comment in clause (vi) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 Balance Sheet, of the state of affairs of the company as at 31st March 2004;
(b) In the case of Profit and Loss account, of the profit for the year ended on that date; and
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For S.S. KOTHARI MEHTA & CO.
Membership No. : 89907
Place : New Delhi
Referred to in paragraph 2 of our report of even date to the members of DLF POWER LIMITED for the year ended 31st March, 2004.
1. (a) The company has maintained proper records in respect of its Fixed Assets showing full particulars including quantitative details and situation of fixed assets.
(b) We have been informed that major fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in our opinion, is reasonable having regard to the size of the company and nature of its business. As informed, no material discrepancies between the book records and the physical inventory have been noticed in respect of the assets physically verified.
(c) Substantial part of fixed assets has not been disposed off during the year and, therefore, does not affect the going concern assumption.
2. (a) As informed, the inventory of the Company at all its locations, except stocks lying with third parties and in transit, have been physically verified by the management either at the end of the year or after the year end. In our opinion, the frequency of verification is reasonable.
(b) According to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory compared to book records were not material and have been duly taken care of in the financial books.
3. (a) The company has taken loan from its holding company DLF Universal Limited covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of such company and the year end balance of such loan is Rs. 22667.35 lacs and Rs. 22667.35 lacs respectively. The company has not given loan to any company, firm or other party covered in the register maintained under section 301 of the Companies Act, 1956.
(b) In our opinion and according to information and explanations given to us, the rate of interest and other terms and conditions on which loan has been taken are not, prima facie, prejudicial to the interest of the company.
(c) In respect of the aforesaid loan, the amount of principal and interest have been paid as per mutual understanding between the company and the holding company.
(d) Based on our comments in clause c) above, there are no overdue amounts exceeding rupees one lac at the year end.
4. In our opinion and according to the information and explanations given to us, and having regard to the explanations that certain items purchased / sold are of special nature for which suitable alternative sources do not exists for obtaining comparative quotations, there are adequate internal procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instances of major weaknesses in the aforesaid internal control procedures.
5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301of the Companies Act, 1956 have been so entered.
(b) In our opinion and having regard to our comments in paragraph (4) above, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.
6. The company has not accepted any deposit from the public within the meaning of provisions of section 58A and 58AA of the Companies Act, 1956.
7. In our opinion, 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 books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of the Company’s power generating activity to which the said rules are made applicable and are of the opinion that, prime facie, the prescribed records have been made and maintained. We are, however, not required to make a detailed examination of such books and recrods.
9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have been generally regularly deposited during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2004.
(b) (i) In our opinion and according to the information and explanations given to us, there are no dues in respect of excise duty, income tax, wealth tax, customs duty, excise duty and cess that have not been deposited on account of any dispute.
(ii) In our opinion and according to the information and explanations given to us, the dues in respect of sales tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:-
Name of the Statute
Nature of the Dues
Amount (Rs.in lacs)
Forum where dispute is pending
Sales Tax Act
Sales Tax Tribunal Cuttack, Orissa,
10. The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.
11. In our opinion, on the basis of books and records examined by us and according to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.
12. Based on our examinations of the records and explanations given to us, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.
14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Order are not applicable to the company.
15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.
16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the company were applied for the purpose for which the loans were obtained where such end use has been stipulated by the lender.
17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investment and vice-versa.
18. The company has not made any preferential allotment of shares during the year.
19. There are no secured debentures outstanding as at the year end.
20. The Company has not raised any money through public issues during the year.
21. During the course of our examination of the books & records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company, noticed and reported during the year, nor have we been informed of such case by the management.
For S.S. KOTHARI MEHTA & CO.
Membership No. : 89907
Place : New Delhi