-- INDEPENDENT AUDITOR'S REPORT DOGER&Co. CHARTERED ACCOUNT ANTS II.'..-----,/. (0) 0177-2656809,2656162,(M) 98170-73000-- INDEPENDENT AUDITOR'S REPORT To The Members of H.P. Power

/

DOGER&Co.CHARTERED ACCOUNT ANTS

II

.' .. - ----,/ .(0) 0177-2656809,2656162,(M) 98170-73000

INDEPENDENT AUDITOR'S REPORT--ToThe Members of H.P. Power Transmission Corporation Limited.

Report on the Financial Statements

1. We have audited the accompanying financial statements of H.P. PowerTransmission Corporation Limited, Shimla ("the Company") as at 31st March2016, which comprise the Balance Sheet as at 31st March 2016, the Statement ofProfit and Loss, Statement of Pre-operative Expenditure and Cash FlowStatement for the year then ended, and a summary of significant accountingpolicies and other explanatory information.

Management Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters in section134(5) of the Companies Act, 2013 ("the Ac~") with respect to the preparation ofthese financial statements that give a true and fair view of the financial position,financial performance and cash flow of the Company in accordance with theaccounting principles generally accepted in India, including the AccountingStandards specified under Section 133 of the Act, read with Rule 7 of theCompanies (Accounts) Rules, 2014. This responsibility also includes themaintenance of adequate accounting records in accordance with the provisionof the Act for safeguarding of the assets of the Company and for preventing anddetecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design, implementation and maintenance ofinternal financial control, that were operating effectively for ensuring theaccuracy and completeness of the accounting records, relevant to thepreparation and presentation of the financial statements that give a true and fairview and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements basedon our audit. We have taken into accou h" rovisions of the Act, theaccounting and auditing standards and ic are required to be

*V, *(/SHIMLA ;"~1. ;;

Office: First Floor, Opp. Panchauat Bhaioan Main· fJ llS tand, Shimla (H.P.)171001EmailID:dogersachingmRl.com

I

included in the audit report under the provisions of the Act and the Rules madethereunder.

We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain.reasonable assurance about whether the financial statements are free from.material misstatement.

•4. An audit involves performing procedure to obtain audit evidence about the

amounts and disclosure in the financial statements. The procedures selecteddepend upon auditor's judgment, including the assessment of the risk ofmaterial misstatements of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal controlrelevant to the Company's preparation and presentation of the financialstatements that give a true and fair view in order to design audit procedure thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overallpresentation of financial statements.

5. We believe that audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified audit opinion.

Basis of Qualified Opinion:

6. As detailed in Note no. No.18 (2) (e) and 18 (1) if) to the Financial Statements,Company is depositing advance tax on "Interest Income" earned on money parked inFixed deposits. However company is not making any provision of Income Tax on thisinterest Income. The matter of taxability of interest income earned during constructionperiod is under dispute with Income Tax authorities. In cases for the financial years2009-10, 2010-11,2011-12 and 2012-13 company has lost the cases upto Income TaxTribunal level and currently these cases are under appeal with Hon'ble HimachalPradesh High Court. Despite unfavorable orders [refer to Note no. No.18 (1) if) (iii) to(vii)], neither the company has made any provision for the taxes paid nor it has writtenoff the taxes paid. This is in contravention of Accounting Standard 22 "Accounting onTaxes on Income" issued by ICAL Accordingly, expenses to the extent of RS.1670.40Lakhs (for tax demands upto F.Y.2013-14) are understated and current assets areoverstated to this extent.

7. Interest on Income Tax Refunds : During the year under audit the company hasreceived refunds of income tax on which interest to the tune of Rs. 46.93 lakhs has alsobeen paid u/s 244A of Income Tax Act, 1961. However company has not credited thisincome to its revenue. Therefore, income of the company for the year is understated tothe extent of Rs.46.93. Similarly company has not accounted for interest on Income Taxrefunds for earlier years also Rs.87.76 lakhs in FY2014-15

~~~VBOGER& C .•

2 SHIMLA~ ~~ ~

~DA~~~

8. Change in Depreciation Policy: During the year, the company has changed the method 3of providing the depreciation on Transmission Assets from WDV method to SLM.However, Change in accounting policy for depreciation, and its effect on financialstatements, has not been properly disclosed as per requirements of AS-1.

9. In reference to Note No.18 (2) (c), the Company has not accounted value of assetsamounting to Rs. 6756 Lakhs in respect of 220KV Double Circuit Kashang-BhabaTransmission Line which stand transferred to company under MOU with HPPCL.Under the accounting principles generally accepted in India, above fixed assets (innature of Capital Works in Progress) should have been booked by the company. Nonaccounting of this item is in contravention of Accounting Standards issued by the lCAI,AS-lO on Accounting of Fixed Assets. Accordingly, Capital Work in Progress isunderstated to the extent of Rs.6756 Lacs and correspondingly the Current Liabilitiesare also understated to that extent.

10. In reference to Note No. No.18(1)(j)(iii) and 18(2)(h) the Company has not accountedfor surcharge of Rs.838.83 Lakhs (for the years 2013-14 to 2015-16) in the books by thecompany, despite the fact that same has duly been charged in the NEW revised invoice.We are to state that as per accounting principles generally accepted in India, amount ofsurcharge should have been passed in company books. This is in contravention ofAccounting Standard AS-9 on Revenue Recognition issued by the ICAl. Accordingly,income for the year for Rs. 343.20 lakhs is understated in the company books andcorresponding current assets are also understated.

11. Company has also revised the bill for transmission charges raised to HPSEBL and as perrevised bill, now company has charged the surcharge w.ef May 2013 and no surchargehas been charged for the period from 2010-11 to 2012-13 which was earlier charged.Company has neither made disclosure for revision of invoices nor has accounted forsame in books of accounts.

12. In reference to Note No. No. 18(2)(p), during the year under audit, company has notrecognised any income for the transmission charges of 3 interstate lines (1. 220 KV DICLine From Kunihar to Panchkula. 2.220 KV Sic Line From Khodri to Majri and 3.220KV Sic Line From Thein Dam to Jassure). CERC has approved the tariff for thecontrol period 2014-19 vide its order dated 16.05.2016 and company has booked thetransmission charges for the F.Y.2014-15 and 2015-16 in the period subsequent to theperiod under audit. Therefore revenue to the extent of Rs.257.07 (on the basis ofapproved CERC tariff for the year 2015-16) is understated during the year. Further anamount of Rs.256.03 lakks are also understated under prior period income.

13. The Company does not follow a system of obtaining confirmation of balances in respectof claims \ amount recooerabie/pavables (including HPSEB Ltd but other than frombankers), security deposits, advance for capital works etc. Due to non availability ofconfirmations of aforesaid balances, we are unable to quantify the impact of theadjustment, if any, arising from reconciliation and settlement of account balances in thefinancial statemen ts.

14. Read with Note No. 18.1(h), the company has not started the process of writing off itspreliminary expenses, despite being started its commercial operations.

Qualified Opinion

15. In our opinion and to the best of our information and according to theexplanations given to us, except for the effects of the matter described in the Basis ofQualified Opinion Paragraphs, the financial statements give the informationrequired by the Act in the ma ner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2016, and its profit and its cashflows for the year ended on that date

Emphasis of Matter:

We draw attention to the following matters in the notes to the financialstatements:

16. As per Article of Associations of company, the equity share capital of companywas to be shared between the Govt. of HP and HPSEB in the ration of 60:40.Contrary to this share capital of company is subscribed by Govt.of HP and HPInfrastructure Board (HPIDB) in the ratio of 52:48. Now company is in theprocess of amending the Ownership Pattern and Equity Holding in the Articleof Associations. As explained to us this has been approved in ROC records on22.05.2017. However, this despite being a material fact has not been properlydisclosed in Notes to account by company. Our opinion is not qualified inrespect of this matter.

17.Report on Other Legal and Regulatory Requirements

a. As required by the Companies (Auditor's Report) Order, 2016 ('theOrder'), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure-I, astatement on the matters specified in paragraphs 3 and 4 of the Order, tothe extent applicable.

b. We are enclosing our report in terms of Section 143 (5) of the Act, on thebasis of such checks of the books and records of the Company as weconsidered appropriate and according to the information andexplana tions given to us, in the Annexure-2 on the directions issued byComptroller and Auditor General of India.

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

a. We have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purpose of our

. ~~~

audit: f~Ci'~D"~CDA@..,.

5b. In our opinion proper books of account as required by Law have been kept

by the Company so far as appears from our examinations of those books;

c. the Balance Sheet, Statement of Profit and Loss, Statement of Pre-operativeExpenditure and Cash Flow Statement dealt with by this Report are inagreement with the books of account.

d. In our opinion, the aforesaid financial statements, except for the effects of thematter described in the Basis of Qualified Opinion Paragraph, comply with theAccounting Standards specified under Section 133 of the Act, read with Rule7 of the Companies (Accounts) Rules, 2014.

e. Being a Government Company, pursuant to the Notification No. GSR 463(E)dated 5th June 2015 issued by Ministry of Corporate, Affairs, Government ofIndia, provisions of sub-section (2) of Section 164 of the Companies Act,2013, are not applicable to the Company.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls,refer to our separate Report in Annexure 3 to this report;

g. In our opinion and to the best of our information and according to theexplanations given to us, we report as under with respect to other matters tobe included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014:

i. the Company have pending litigations but it would not impact itsfinancial position.

n. the Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeablelosses.

iii. there were no amounts which required to be transferred by theCompany to the Investor Education and Protection Fund.

Date : 24.06.2017Place: Shimla

1/ Annexure 1" to the Auditors Report

[Referred to in paragraph 17 (a) under 'Report on Other Legal and Regulatory Requirements'of our Report of even date to the members of H.P. Power Transmission Corporation Limited onthe accounts of the company for the year ended 31st March, 2016J

On the basis of such checks as we considered appropriate and according to theinformation and Explanations givento us during the course of our audit, we reportthat:

i. In respect of its fixed assets:

a. The Company has generally maintained proper records showing fullparticulars, including quantitative details and situation of the fixedassets.

a. The company has conducted the physical verification of fixed assets atcorporate office & divisional offices. However, physical verification ofcapital work in progress i.e. projects under implementation is monitoredonly from measurement book (MB) of the project work. According to theinformation and explanations given to us, no material discrepancies werenoticed on such verification.

b. The Title deeds of immovable properties were not shown to us exceptthose which were acquired through acquisition order of Govt. However,the assets i.e. transmission lines vested in Company through Govt.Orders have not been updated in the revenue records.

ii. In respect of its inventory: The company is not holding any inventory as such,therefore matters specified in clause and its sub clauses do not apply to theCompany.

iii. In respect of loans, secured or unsecured, granted to the parties covered inregister maintained under section 189 of the Companies ~ct 2013: According tothe information and explanations given to us, the Company has not granted anyloans to companies, firms or other parties covered in the Register maintainedunder Section 189 of the Companies Act, 2013; and therefore paragraph 3(iii ) ofthe Order is not applicable ..

iv. The Company has not granted any loans or given any guarantee and securitycovered under Section 185 and 186 of the Companies Act, 2013. In respect ofinvestment in the Subsidiary and Joint Venture Companies, the Company hascomplied with the provisions of Section 185 and 186 of the Companies Act,2013. e'~~~

':a::'M;O;1.\.,. ~~ 1l~ ~~

~~DACC~.,.

v. The company has not received any public deposits during the year.

vi. We have been informed that the Central Government has not prescribed/' maintenance of cost records under sub-section (1) of Section 148 of the Act, in

respect of the activities carried on by the Company.

vii. In respect of statutory dues:

a. According to the records of the company and information and~explanations given to us, the Company has generally been regular indepositing undisputed statutory dues, including Income-tax, Taxdeducted at sources, Service Tax and other material statutory duesapplicable to it, with the appropriate authorities And there are noundisputed dues, outstanding as on 31st March 2016 for a period of morethan six months from the date they became payable.

b. According to the information and explanations given to us, the disputedstatutory dues of income tax, sales tax, wealth tax, service tax, customduty, excise duty, value added tax, cess and other material statutory duesthat have not been deposited on account of any dispute are given below:

Status of Income tax Cases

Demand Appeal Appeal Appeal

F.Year in Rs. AO-ACIT Before Before Before Remarks Exp. Booking

Lacs CIT ITAT High StatusCourt

Demand adjustedExpenditure not

2009-10 47.64 Demand Dismissed Dismissed Pending against advance tax charged to P&L tilldate

Demand deposited Expenditure not2010-11 156.12 Demand Dismissed Dismissed Pending after adjustment of charged to P&L till

advance tax dateAdjusted by ITD Expenditure not

2011-12 327.14 Demand Dismissed Dismissed Pending against refund of charged to P&L tillF.Y.2012-13 date

Not yet Demand adjustedExpenditure not

2012-13 428.61 Demand Dismissed Dismissed filed against advance taxcharged to P&L tilldate

Demand adjustedExpenditure not

2013-14 710.90 Demand Pendingagainst advance tax

charged to P&L tilldate

viii. As per information and explanations given to us, the Company has notdefaulted in the repayment of dues to financial institutions or banks.

ix. No money was raised by way of initial public offer or further public offerduring the year. Further, according to the information and explanations given tous, the money raised by the Company by way term loans have been applied forthe purpose for which they were obtained. Proceeds of loans for the time beingare being parked in bankjFDR accounts. 11P~~

" oGER & C

f!. <>a·*~. 2 SHIMLA ~I))1l~ (-.."~'?~DACC~/i,..•...

x. According to the information and explanations given to us and as representedby the Management and based on our examination of the books and records ofthe Company and in accordance with generally accepted auditing practices inIndia, no case of frauds by the Company or any fraud on the company by itsofficers or employees has been noticed or reported during the year.

xr, As per notification no. GSR 463~E)dated 5th June 2015 issued by the Ministry ofCorporate Affairs, Government of India, Section 197 is not applicable to theGovernment Companies. Accordingly, provisions of clause 3 (xi) of the Orderare not applicable to the Company.

Xu. In our opinion and according to the information and explanations given to us,the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of theOrder is not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company, transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the financial statementsas required by the applicable accounting standards.

xiv. The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to theCompany.

xv. The Company has not entered into any non-cash transactions with the directorsor persons connected with them as covered under Section 192 of the CompaniesAct, 2013.

xvi. According to information and explanation given to us, the Company is notrequired to be registered u/ s 45-IA of Reserve Bank of India Act, 1934.Accordingly, provision of clause 3(xvi) of the Order is not applicable to theCompany.

For DaGER &CO.R!Hffl:ED CCOUNTANTS

Date: 24.06.2017Place: Shimla

/I Annexure 2" to the Auditors Report

[Referred to in paragraph 17 (b) of our Report of even date to the members of H.P. PowerTransmission Corporation Limited on the accounts of the company for the year ended 31S1

March,2016]

Report / CommentsIn compliance with Company Specific Sub-Directions

under section 143(5)of The Companies Act, 2013Sr.No. Direction Remarks1 Whether the company has

title/lease deeds for freeholdleasehold land respectively?

2

3

clearand

As explained to us the company hasclear title deeds for freehold andleasehold land.However, transmission lines vested

If not please state the area of freehold in Company through Govt. ordersand leasehold land for which have not been updated in thetitle/lease deeds are not available. revenue records.

Whether there are any cases ofwaiver/ write off ofdebts/loans/interest etc., if yes, thereasons there for and the amountinvolved.Whether proper records aremaintained for inventories lying withthird parties & assets received asgift/ grant(s) from Government orother authorities.

Date : 24.06.2017Place: Shimla

No, we have not come across anycases of waiver/ write off of debts/loan/interest etc. Hence notapplicable.

During the year under review, thecompany does not have anyinventories lying with any third partynot the company has received anyasset as gift from Government orother authorities.

II Annexure>,' to the Auditors Report

[Referred to in paragraph 18 if) of our Report of even date to the members of H.P. PowerTransmission Corporation Limited on the accounts of the company for the year ended 31st

March, 2016]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act, 2013 (lithe Act")

We have audited the internal financial controls over financial reporting of H.P. PowerTransmission Corporation Limited ("the Company") as of March 31, 2016 inconjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial ControlsThe Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued b,y the Institute of Chartered Accountants of India. Theseresponsibilities include the design, implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business, including adherence to company's policies, thesafeguarding of its assets, the prevention and detection of frauds and errors, theaccuracy and completeness of the accounting records, and the timely preparation ofreliable financial information, as required under the Companies Act, 2013.

Auditors' ResponsibilityOur responsibility is to express an opmlOn on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing, issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013,to the 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 complywith ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reportingwas established and maintained and if such controls operated effectively in allmaterial respects. 6AJi11!!,~

C~O·~~~~~DA~

lD

Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement, includingthe assessment of the risks of material misstatement of the 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company's internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financialreporting, including the possibility of collusion or improper management override ofcontrols, material misstatements due to error or fraud may occur and not be detected.Also, projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.

r

OpinionIn our opinion, the Company has, in all material respects, an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31, 2016, based on theinternal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

Date : 24.06.2017Place :Shimla

H P POWER TRANSMISSION CORPORATION LTO.

\

Himfed Buildina TutikandUPanirj)Shimla.-Balance Sheet As At 31st March-2016 (Amt. Rs.in Lakh )

NoteParticulars No. As at 31.03.2016 As at 31.03.2015

I. EQUITY AND LIABILITIESIe

(1) Shareholder's Funds:(a) Share Capital 1 22,651.50 18,048.50(b) Reserves and surplus 2 589.02 365.84(2) Share application money pendingallotment 3 1,272.00 2,596.00(3) Non- Current Liabilities

,

(a) Long Term Borrowings 4 33,801.95 25,301.95(b) Long Term Provisions 5 10,537.79 8,208.07

(4) Current Liabilities:(a) Other current liabilities 6 4,995.33 3,899.72

Total 73,847.59 58,420.08

II. ASSETS

(1) Non-current assets:(a) Fixed assets

(i) Tangible assets 7 6,973.12 7,129.95(ii) Intangible Assets 7 2.13 3.72(iii) Capital work-in-progress 7 41,151.91 26,338.45

(2) Investment in lilT Una 8 480.00 480.00(3) Current assets:

(a) Cash and cash equivalents 9 12,935.43 14,901.41(b) Short-term loans and advances 10 12,130.23 9,506.10(c) Other current assets 11 174.77 60.45Significant Accounting Policies & Notes to

Accounts 18

Total 73,847.59 58,420.08

~)l~_- .:~

L(Kamlesh Sharma)Manager (Accounts)

(CMA Amrit Chauhan)AddI.G.M.(Finance)

IEr.~Director(P&C)

IEr~Managing Director

Place: ShimlaDate: 24.6.2017

H P POWER TRANSMISSION CORPORATION LTO.}4-

Himfed Buildina Tutikandi.(Paniri)Shimla (Amt. Rs.in Lakh)I"

PRE-OPERATIVE EXPENDITURE STATEMENT FOR THE YEAR ENDED 31ST.MARCH, 2016Note

Particulars No. As on 31.03.2016 As on 31.03.2015

Expenses(A)Employee benefit expenses 13 797.63 800.93Financial costs 14 2,992.66 1,735.36Depreciation and amortization expenses 15 11.10 20.57Other expenses 16 146.14 130.42Prior Period Adjustment 17 15.32

Total (A) 3,962.84 2,687.28Less:- i.Miscelianeous Income 12 1,269.73 1,435.73Net Expenditure (8)( Carried forward to CWIP) 2,693.12 1,251.55Significant Accounting Policies & Notes to/) (Ek~Ac.count,,-. t / 18

~~~~ (CMAAL.~n) (Er. J.P.Kalta)Mana er Accounts AddI.G.M. Finance Director P&C Mana in Director9


9 9

H P POWER TRANSMISSION CORPORATION LTD.Himfed Buildina Tutikandi.(Paniri)Shimla (Amt. Rs.in Lakh)

~- Profit & loss statement for the year ended as on 31.3.16~Note

Particulars No. As on 31.03.2016 As on 31.03.2015

I. Revenue from operations 12 1,522.48 1,246.83II. Other Income - -III. Total Revenue (I +11) 1,522.48 1,246.83IV. Expenses:Employee benefit expenses 13 299.20 255.48Financial costs 14 - -Depreciation and amortization expenses 15 256.79 103.51Other expenses 16 462.98 412.11Total Expenses 1,018.97 771.10

V. Profit before exceptional and extraordinaryitems & tax(III-IV) 503.51 475.73

VI. Prior Period Adjustment 17 189.09 335.08

VII. Profit before extraordinary items and tax'V- VI) 314.42 140.65

VIII. Tax expense: -(1) Current tax 103.76 45.57(2) Deferred tax -IX. Profit & Loss for the period transfered toreserve & surplus(VII-VIII) (VII-VIII) 210.66 95.08Significant Accounting Policies & Notes to /1 k~LAccounts / 18

\~~~ CMA 1m: J.:.n ~)

~Er. K.S.Att . Er. J.P.Kalta( )

Manager (Accounts)( flt-

Director(P&C)( )

Managing Director)

AddI.G.M.(Finance)


1) SHARE CAPITAL

.; PARTICULARSAmt. Rs in Lakh Amt. Rs in LakhAs at 31.03.2016 As at 31.03.2015

J

AUTHORISED SHARE CAPITAL(2,50,00,000 Equity Shares of Rs1OO/-each )(Previousyear 2,00,00,000 equity shares of Rs. 100/-each) 25,000.00 20,000.00

ISSUED, SUBSCRIBED AND FULLY PAID UP CAPITAL(2,26,51,500 Equity Shares of Rs. 100/- each fully paid up)(Previous year 1,80,48,500 equity shares of Rs. 100/- each(Fully paid up)

22,651.50 18,048.50

Total Paid Up Capital 22,651.50 18,048.501) The company has Issued only one class of shares referred to as equity shares having a parvalue of Rs. 100/- each. All equity shares carry one vote per share without restrictions and areentitled to dividend, as and when declared. All shares rank equally with regard to the company'sresidual assets.

1.1) Detail of shareholding more than 5% shares in company:

Amt. Rs in Lakh Amt. Rs in Lakh%Name of Shareholder

As at 31.03.2016 %As at 31.03.2015

HP Govt 11,781.50 52.01 7,178.50 39.77HPIDB 10,870.00 47.99 10,870.00 60.23

22,651.50 18,048.50(Share holding of HP Govt. IS Inclusive of 1000 shares of RS.100/- each

issued infavour of 5No. Govt. nominee Directors)

1.2) Reconciliation of shares outstanding is set out below:

PARTICULARSNo. of shares Amt. Rs in Lakh

No of shares at the beginning (as on 01.04.2015) 1,80,48,500 18,048.50No of shares issued during the year 46,03,000 4,603.00No of shares at the end (as on 31.03.2016) 2,26,51,500 22,651.50

2.) Reserve & Surplus

PARTICULARSAmt. Rs in Lakh

As at 31.3.2016Amt. Rs in Lakh

As at 31.3.2015

Trans.lines value wrongly debited during 2014-15 12.52 0.00Balance of Profit & Loss statement upto 2014-15 365.84 270.76

Balance of Profit & Loss statement for 201 6 210.66589.02

(Er. . .Director(P&C)

95.08365.84

I(Er.J.~lta)

Managing Director


11-.J

3) ADVANCE SHARE APPLICATION MONEY

PARTICULARSAmt. Rs in Lakh Amt. Rs in LakhAs at 31.03.2016 As at 31.03.2015

A) HP Govt. Share Application pending allotment 1,272.00 2,596.00

TOTAL 1,272.00 2,596.00

4)LONG TERM BORROWINGS:


Lona Term LoansState Govt. Loans (ADB) Tranch-1. (Installment ofprincipal & interest payable yearly on 15th January, 19,512.02 14,430.51however principal yet not due)State Govt. Loans (AD B) Tranch-2. ( Installment ofprincipal & interest payable yearly on 15th January, 10,306.04 6,887.55however principal yet not due)Loan from Mis REC Ltd. 3,983.89 3,983.89

33,801.95 25,301.95

There has been no defaults in repayment of any of the loans or interest thereon at the end of theyear.

5) LONG TERM PROVISIONS:

Amt. Rs in Lakh Amt. Rs in LakhPARTICULARS

As at 31.03.2016 As at 31.03.2015

Provision for Pension & Leave salary Contribution 387.24 310.74Interest on 90%Loan of ADS Govt. of HP 4,028.39 1,775.17HP State Govt! HPSEB (Assets Cost) 6,122.16 6,122.16Total 10,537.79 8,208.076) OTHER CURRENT LIABILITIES:

\


Liabilites for Employees' Remuneration and Benefits 134.00 101.65Liabilities for Contractors & Suppliers 3,869.56 2,868.83Liabilities aqainst deposit Work & other Govt. Deptt. 851.36 713.95Taxes and Duties Payable ./l 140.41 215.29

r» TOTAL // 4,995.33 3,899.72~~*.~(CMAA~~K~ ilL ~'VV ~l

(E ;'C'A' _ (Er. J.P.Kalta),Manager (Accounts) AddI.G.M.(Finance) Managing Director


'j

~.,

FIXED ASSETS7.1) TANGIBLE ASSETS L Arnt, Rs in Lakh

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

DELEASON ADDITION TION ASON UPTO PROVIDED ReI. Earnings UPTO ASON ASON

Prior PeriodADJU Dep.lADJUSTE

01.04.15 DURING PERIOD STED 31.03.16 31.03.15 DURING PERIOD 0 31.03.16 31.03.16 31.3.15Old Transmission Lines

from HPSEB 10,263.37 - - 10,263.37 5,207.79 256.79 145.95 5,610.53 4,652.84 5,055.58

Land for SUb.S!n. 2,052.97 238.68 - 2,291.65 - - - 2,291.65 2,052.97

Furniture & Fixture " 41.78 3.10 - 44.88 30.62 3.44 - 34.06 10.82 11.16

Vehicle 12.20 7.40 - 19.60 10.53 1.56 12.09 7.51 1.68

Computer 53.82 5.77 - 59.59 47.55 3.31 - 50.86 8.73 6.27

Office Equipments 12.42 0.47 - 12.89 10.12 1.20 - 11.32 1.57 2.29

Miscellaneous Equipments 0.17 - - 0.17 0.17 - - 0.17 0.00 0.00

Fire Safety Equipmenls 0.45 - 0.45 0.45 - 0.45 0.00 0.00

Capital Expenditure on 1.38 - - 1.38 1.38 - - 1.38 - -

Leased Assets

Grand Total 12,438.56 255.42 - 12,693.98 5,308.61 266.30 145.95 5,720.86 6,973.12 7,129.95

Previous year 2,066.75 10,371.81 - 12,438.56 5,175.25 118.76 14.60 5,308.61 7,129.95 1,983.26

7.2) INTANGIBLE ASSETS

5.32

(Amt.in Rs.)

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

Ie

2.17 10.14

1.59

DELETIONADJUSTED

UPTO31.3.16

3.72

ADDITION DELEDURING PERIOD ADJU

UPTO31.3.15

PROVIDEDDURING PERIOD

35.01 2.13

ASON31.3.16

AS ON1.4.15

AS ON31.3.16

ASON31.3.15

33.4237.14Software 37.14

25.9337.14Previous year 36.07

(CMA Amrit Chauhan)

Addf.G.M.(Finance)Manager (Accounts)


3.7233.42

t'

(Er.J.p.~

Managing Director

.J

7.3) 7.3 Capital Work In Progress I AmI. Rs in Lakh

Sr. PARTICULARS GROSS BLOCK NET BLOCKNo. AS N ADOI'I N ELE' ION Al>Ol\f liS ON AS ON

01.04.15 uUKINlj t'I:Kluu ADJU:5ll:u 31.03.16 31-:ol.16 31.3.151 Kashano Bhaba Proiecl 1,705.21 231.68 - 1,936.89 1,936.89 1.705.212 33/132 KV GIS Pandoh 1.69 4.85 6.54 6.54 1.69

3 Sawra Kuddu projecl 15.60 13.38 2.22 2.22 15.60

4 5MVA GIS STN Palchan 283.02 - - 283.02 283.02 283.025 Transmission line at Palchan 10 AD Hydro 265.88 265.88 265.88 265.88

6 33/220KV Sub SIn. at Karian 2,967.21 0.15 - 2,967.36 2,967.36 2,967.21

7 33KV SERVICE STATION AT LAHAL 2.99 - 2.99 2.99 2.99

8 220/400KV S.STN GUMMA 7,087.61 1,496.24 8.583.85 8,583.85 7,087.61

9 22166/220KV S.STN BHOKTOO 1,662.34 991.59 - 2,653.93 2,653.93 1,662.3410 220KV D/C LINE PATLlKUHAL TO FOZAL 1,127.79 92.74 - 1,220.53 1,220.53 1,127.7911 Dep. Work 220/66/22KV GIS S.STN Bhokloo(HPSEB) 924.38 479.30 1,403.68 1,403.68 924.3812 33/220 KV S/STN FOZAL 5,657.37 166.56 - 5,823.93 5,823.93 5,657.3713 400/220/66KV GIS S.STN WANGTOO(ADB) 98.89 4,166.42 - 4,265.31 4,265.31 98.89

14 Deposil work Snale Halkoli 27.53 352.26 379.79 379.79 27.5315 220kv D/C(T. M.) Line Halkoli 10 220/400S.sln Gumma 2,741.15 451.54 - 3,192.69 3,192.69 2,741.1516 220Kv Switchinq SIn Halkoli 4.45 0.10 - 4.55 4.55 4.4517 66KVD/C LINE URNI TO WANGTOO 8.61 247.59 - 256.20 256.20 8.6118 220kv sic line on d/c lower karian to PGCIL 658.29 4.84 - 663.13 663.13 658.2919 132kv D/C T.LlNE BARSAINI TO CHAROR 18.03 - - 18.03 18.03 18.03

20 66/220KVGIS SUB STN URRNI(ADB) 2.70 1,293.71 1,296.41 1,296.41 2.7021 33KvD/C T.Line on Monopole Palchan TO AD Hydro 6.03 1.61 - 7.64 7.64 6.0322 132KvD/C T.LineTangnu Romal (44MW)HEP Rohru 8.14 1.12 - 9.25 9.25 8.14

23 220KV T/.LlNE CHAROR TO BANALA KULLU 11.15 1,869.01 1,880.16 1,880.16 11.1524 400KvD/CIine 33/220/400 S.Sln Lahal 10 PGCIL 0.24 - - 0.24 0.24 0.24

25 220KV SIC T.LlNE LAHAL TO RAJERA 18.03 18.03 18.03 18.03.

26 400KVD/CT.LlNE LAHAL TO RAJERA 24.56 16.77 - 41.33 41.33 24.56

27 1321220KV POOLING STN AT SUNDA 2.75 0.10 - 2.85 2.85 2.75

28 220KV T.LlNE PS SUNDA TO HATKOTI 19.37 193.05 - 212.42 212.42 19.37

29 66/220KV GIS SUB STN SUNDA 1.30 - - 1.30 1.30 1.30-30 220KV T. LINE FROM S.STN. LAHAL TO BUDHIL 1.70 8.24 9.94 9.94 1.70

31 220 KV T.LlNE FROM BAJOLI HOLI TO SS LAHAL 4.33 10.11 - 14.44 14.44 4.33

32 33/220kv sS.STN AD Hydro Prini 36.69 28.99 - 65.68 65.68 36.6933 1321220 kv GIS STN Charor 1.33 - - 1.33 1.33 1.33

34 33/1321,2x25/31.5MVA SSTN Chambi 2.15 - - 2.15 2.15 2.15

35 132 KV Transmission Line Chambi 5.67 20.79 - 26.46 26.46 5.67

36 400KV D/C t. Line Parwali -2 10 PGCIL Banala 0.27 - - 0.28 0.28 0.27

37 400 KV D/C T.Line Sainj Kullu 0.67 0.67 0.67 0.67

38 132 KV Transmission line Rupin HEP to PS Sunda 3.60 - - 3.60 3.60 3.60 .

39 66Kv Transmission Bagipul 10 Kolla - 1.22 - 1.22 1.22 -40 220Kv Transmission line Majra 10 Karian - 1.49 . 1.49 1.49 -41 220 Kv GIS Charror - 1.65 - 1.65 1.65 -

Total 25,408.72 12,133.72 13.38 37,529.06 37,529.06 25,408.72preliminarv exoenses ./I 101.78 101.lB 101.78 101.78pre -opera live expenses / I 827.95 2,693.12 3,5U.06 _~,521.06 827.95

Total Carried forward to Balalll':e Sheet / / 26,338.45 J ! ( r II 7 -1'~-'-41,151.91 26,338.45

~~/ ~ ~L_~\ ~ ~,

¢Place: Shimla CMA Amrit Chauhan Er ~. ",' cr. J.P.Kalta~ C n Doger,PartnerDate: 24.6.2017 Manager(Accounts) Addl.G.M.(Finance) Director(P&C) Managing Director 0 S8

~ ~OACC<:' ~--

8) INVESTMENTS


Investment with lilT Una 480.00 480.00TOTAL 480.00 480.00

9) CASH AND CASH EQUIVALENTS


Cash and Bank Balances(1) Cash in hand (including Imprest) 0.06 0.09(2) Stamps in hand 0.07 0.06(3) Bank Balances with scheduled banks

(i) CurrenUSB Deposits 7,720.60 8,486.74(iii) Term Deposits with maturity period upto <

12 months. 5,214.70 6,414.52TOTAL 12,935.43 14,901.41

10) SHORT TERM LOANS AND ADVANCES:


Advance to HP Govt. Deptt. 106.32 96.35Recoverable from Employees & others 2.25 2.16Advance to Land Acquisition Officer 601.04 601.04Recoverable from Govt. Depptt. 1,695.10 1,639.76Recoverable from Contractors/SuppliersNendors 7,679.16 5,409.61Advance Tax DeposiUTDS/Recoverable from Tax Authorities 2,030.52 1,735.70Prepaid Expenses 4.22 5.98Prepaid Expenses(ARR Exp.MYT 2014-15 to 2018-19) 11.62 15.49

Total 12,130.23 9,506.09

11) OTHER CURRENT ASSETS

PARTICULARSAmt. Rs in LakhAs at 31.03.2016

Amt. Rs in LakhAs at 31.03.2015

Interest Accrued but not due 172.07 57.81Securit Deposits 0.54 0.49Stationery in hand 2.16 2.15

60.45


12. . INCOME

PARTICULARS Amt. Rs in LakhAs on 31.03.2015

Amt. Rs in LakhAs on 31.03.2016

591.38349.71

325.421,269.73

1,141.02347.46

1,522.482,792.21

2.86

0.320.010.03

34.00

22.85

37.01

0.05

1.59

11.10


934.95

102.01

1,096.83299.20797.63

1,096.83

i) MISCELLANEOUS INCOME:

interest on Bank Deposits 776.36Sale ot.Jender Forms 8.86

Interest on ADB Loan ImprestMisc. Receipts

315.450.56

0.02WCA Jnterest

Interest from Cont.lSupplier 334.48RTI Fee

Total (i) 1,435.73ii) Income of STU & Transmission linesConnectivity fee 58.00

344.77Short Term Open Access 844.06

Total(ii) 1,246.83Transmission charges Income

TOTAL INCOME (i+ii)13) EMPLOYEE BENEFITS EXPENSES:

2,682.56

PARTICULARS Amt. Rs in LakhAs on 31.03.2015

Salaries, Wa es, Allowances and Benefits 893.18

Leave Sala and Pension Contribution 110.92Contribution to Provident and Other Funds 16.97

Total 1,056.41Welfare Expenses 35.34

50% of Corp. Off. to STU & Transmission IncomeBalance pertains to Capital works

255.48800.93

TOTAL14) FINANCE COSTS:

1,056.41


2,503.58

489.032,992.66


266.30

267.89256.79

PARTICULARSAmt. Rs in LakhAs on 31.03.2015

0.06Interest on Term Loans(ADB) 1,244.53

2.74Bank Char esBank Guarantee fee

TOTALInterest REC Loan

15) DEPRECIATION EXPENSES:

488.031,735.36



PARTICULARS

5.32118.76Depreciation for the Year on Tan ible Assets

124.08Depreciation for the Year on Intan ible Assets

103.5120.57

Total Depreciation for the YearTransferred to Profit & Loss StatementTransferred to Pre-Operative Exp. Statement

Balance L ~~t.w.--r-c~JP':"I""-r- (Er. J.P~)

Director(P&C) Managing Director( amle ~ (CMA Amrit Chauhan)Manager (Accounts) AddI.G.M.(Finance)

16) OTHER OFFICE AND ADMINISTRATIVE EXPENDITURE:,

. PARTICULARSAmt. Rs in Lakh Amt. Rs in LakhAs on 31.03.2016 As on 31.03.2015

Printing.& Stationery 5.11 5.04Book$"'&Periodicals 0.43 0.41Electricity & Water Charges 8.43 6.59Advertisement & Publicity Expenses 5.28 3.79Hirinq Charqes for Vehicles 70.51 63.11Fees & Subscription 1.40 1.06Office Expenses 5.24 4.55Postage & courier 0.56 0.67Office Building Rent 33.00 28.22Insurance Vehicle & Others 0.40 0.17Hospitality Expenses 3.74 3.11Professional Charqes 35.76 35.35Meeting expenses 0.12 0.11Telephone Exps. 14.11 12.84Vehicle Running Expenses 5.35 5.56Internal Audit Fee 0.25 0.25Statutory Audit Fee 0.40 0.40Out of Pocket Expenses 0.17 0.17Tax Audit Fee 0.40 0.28Interest Paid 0.13 0.00TAIDA consultant 2.16 2.77Consumable elec. FittinQ 0.36 0.27Repair & Maintenance 0.36 0.57TAIDA auditors 0.26 0.52Other Misc.exp. Computer 0.72 1.75Office Inaguration Expenses Chambi 0.40 -ADB Consultant Remuneration 4.31 6.33Safety related Exp. at Sarabai Kuliu 0.18 -Leqal Charqes Advocate 0.15 2.23Service Tax paid 0.24 0.56O&M Exp. Phosal sub stn 0.44 -TAIDA ADB Consultants 0.10 0.22Total Admn. & other Exp. 200.47 186.90Less:- 50% of Corp. Off.for STU &Trans. 54.33 56.48Balance Pertains to cwip(i) 146.14 130.42

STU Segment Exp.Membership fee STU(NRPC FUND) 11.00 11.00ARR Exp.MYT Cont. Period 2011-12 to 2013-14 5.18 3.87Licence & reg. fee 100.00 100.0050% expoOf Adm. & other expo 54.33 56.48Legal Charges Advocate 30.97O&M Exp. From HPSEB 261.50 240.76

Total (ii) 462.98 412.11

1\ Total(i+ii) /J I 609.12 542.53

,~a~~~/b ~~L ~,

(CMA Amrit Chauhan) (Er. Er. K.S (Er.J.p~:- -'

Manager (Accounts) AddI.G.M.(Finance) Dlrector(P&C) Managing Director


.~----~--~~------~==============~

17 p' P . d I &E D t '1 b k d durl 2015 16~~or eno ncome xpenses e al 00 e unnq -Period of

Particulars Expenses Amt. as on 31.3.16Expenses incurred by HPSEBEmployees Cost 2014-15 13.62Material Charces 2014-15 16.95A&G Expenses 2014-15 0.05Total Expensea HPSEB 30.62Prior Period Depreciation 2014-15 158.47Total Expenses transferred to Profit & lossStatement 189.09Expenses of HPPTClLeave Encashment of other staff 2008-09 to 2012-13

,8.00

Gratuity of other staff 2008-09 to 2012-13 7.32Total Expenses transferred to Preoperative expenditure statement 15.32Grand Total 204.41

~~(L,(CMA(.~anJ

'~L(KamleshSh~ EF.Er. K.S.Aftri

Manager (Accounts)( )Director(P&C)

~,(Er.~lta)

laging DirectorAddI.G.M.(Finance)


18. SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS

:- 1. SIGNIFICANT ACCOUNTING POLICIES

a. BASISOF PREPARATION OF FINANCIAL STATEMENTS

i. Accounting Convention - The financial statements are prepared underthe historical cost convention on accrual basis and in accordance withgenerally accepted accounting principles and applicable accountingstandards in India. The financial statements adhere to the relevantpresentation requirement of the Companies Act, 2013.

b. FIXED ASSETS Fixed assets are shown at historical cost less accumulateddepreciation. The cost includes any cost attributable of bringing the assets to itsworking condition for its intende~ use.

c. Capital Work In Progress -

1. Capital Work in Progress in respect of 220 KV Double Circuit Line fromKashang-Bhaba Project is capitalized on the basis of bills alreadyapproved and paid by HPSEB till June,2010 and thereafter by HPPTCLto various contractors who have worked on the project. All indirectexpenditure specifically incurred for 220KV double circuit line fromKashang Bhaba project is also capitalized & added to cost of this project.Corporation has considered title to the project in accordance with the

',MOU dated 06.04.09between HPPCL & HPPTCL11. Various other capital works in progress for construction of Transmission

Lines and Sub-Stations is capitalized on the basis of bills alreadyapproved and paid to contractors & other indirect expenditurespecifically related to such expenditure also capitalized & added to costof such project.

d. DEPRECIATION:i. Depreciation on transmission assets which are put in to use till the end of

financial year is provided on past practice as per straight line method atthe rate/ amount notified by HPERC and CERC (Terms & Condition forTariff) Regulation 2014. However the difference of depreciation due tochange in method during previous year including 3 No. Interstate linesfor 2014-15has been provided during this year as prior period expenses.

1

ii. Depreciation on individual assets below Rs.5000/ - purchased before1.4.2014 was provided at the rate of 100 percent taking useful life as 1year and WDV Re.1/ - per asset.

iii. The depreciation on others assets provided as per written down valuemethod as per the rates prescribed in the schedule II of the CompaniesAct.2013.

iv. Transmission assets are depreciated to the extent of 90% of the cost of theassets and 10% is retained as residual value.

v. Individual assets costing up to Rs.1000/ -are fully depreciated in the yearin which they are put to use after 1.4.2014.

e. RETIREMENTBENEFITSi. Defined Contribution Plan (Provident Fund): Corporation's

Contribution paid/payable during the year to Provident Fund isrecognized in the statement of Profit & Loss and pre-operativeexpenditure pending allocation.

ii. Defined Benefit Plan (Gratuity, Pension Contribution & LeaveEncashment): Since almost all employees of the Corporation as onBalance Sheet date are on deputation/ secondment basis, it is notpossible for the Corporation to calculate actuarial valuation of leaveencashment, gratuity and other retirement benefits payable to employeeson deputation. Therefore corporation will not be able to followAccounting Standard AS-15"Accounting for Retirement Benefits" issuedby the Institute of Chartered Accountants of India. However, theprovisions for Leave Salary & Pension Contribution in r/o HPSEB Ltd.employees deployed on secondment basis is made as per Appendix II ofFR for the year 2015-16. The Provision of Gratuity and leave salarycontribution of employees other than HPSEB has also been made duringthe year 2015-16.

f. TAXES ON INCOME :-i. A provision for Income Tax amounting to Rs.103.76Iakh has been made

for the year 2015-16 on Profit of Rs.314.42 lakh on the basis of totalincome received and any further distribution of income shall beaccounted for as and when required in future

11. There is no deferred tax liability for the period.iii. The assessment for the FY 2009-10has been completed by the Assessing

Authority and demand of Rs.52.66 lakh was raised which standsdeposited/ adjusted against advance tax. HPPTCL had filed appealbefore CIT Appeal and ITAT Chandigarh and the same were

2

I

dismissed. Now HPPTCL has filed appeal before Hon'ble High CourtShimla against orders of ITAT Chandigarh. After adjustment a sum ofRs.47.64stands as debit in Advance Income Tax & TDS A/ c.

iv. The assessment for the FY 2010-11has been completed by the AssessingAuthority and demand of Rs.156.12 lakh was raised which standsdeposited/ adjusted against advance tax. HPPTCL had filed an appealbefore CIT appeal and ITAT Chandigarh which were dismissed and norelief was given to HPPTCL. Now HPPTCL has filed appeal beforeHon'ble High Court HP Shimla against order of ITAT Chandigarh.

v. The assessment for the FY 2011-12has been completed by the AssessingAuthority and demand of Rs.341.17 lakh was raised which standsadjusted by Income Tax department against refund of A/Y 2013-14.HPPTCL had filed appeal before CIT Appeal and ITAT Chandigarhwhich were dismissed and no relief was given to HPPTCL. NowHPPTCL had filed appeal before Hon'ble High Court HP Shimla againstorder of ITAT Chandigarh. After adjustment a sum of Rs.327.14 lakhstands as Debit in Income Tax &TDSA/ c.

vi. The assessment for FY 2012-13 has been completed and demand ofRs.476.04 lakh was raised which stands deposited/ adjusted. HPPTCLhad filed appeal before CIT Appeal and ITAT Chandigarh which weredismissed and no relief was given to HPPTCL. Now HPPTCL has tofiled appeal before Hon'ble High Court HP Shimla against order of ITATChandigarh. After adjustment a sum of Rs.428.62 lakh stands as Debit inAdvance Income Tax & TDS A/ c.

vii. The assessment for FY 2013-14 has been completed and assessed atRs.710.90 After adjusting Advance tax and TDS of Rs.403.16 lakhdemand of Rs.307.74 has been raised. Against assessment of Rs.710.90lakh Rs.242.00 lakh has been allowed by HPERC in ARR. Afterrectification order u/s 154 of Income Tax Act.1961 dated 4.10.2016 thedemand was reduced to 225.45 lakh against deposit of Rs.294.83 lakhand refund of Rs.69.37 has been requested from Income Tax Authorities.HPPTCL has filed appeal before CIT Appeal against order of ACITCircle Shimla.

viii. Intimation U/S 143(1) of Income Tax Act.1961 for A.Y.2015-16has beenreceived vide communication Reference No. CPC/1516/ A6/1534021599dated 28.3.2016 along with refund of Rs.50926193/- after adjustingoutstanding demand of Rs.999417/- u/ s 220(2) as per IT department for2010-11. The matter for rectification has been taken up with ITauthorities.

3

;

g. PROVISIONS AND CONTINGENT LIABILITIES: Provisions involvingsubstantial degree of estimation in measurement are recognized when there is apresent obligation as a result of past events and it is probable that there will beoutflow of resources. Contingent liabilities, if any, are not recognized, but aredisclosed in the notes. Contingent assets are neither recognized, nor disclosedin the financial statements.

h. PRELIMINARY& PRE-OPERATIVEEXPENDITUREiThe Corporation has notyet commenced commercial operations on its own constructed transmissionlines and Sub Stations. 50% amount of Corporate office expenses and entireamount of expenditure incurred at different PIU's during construction periodincluding Finance Costs and Depreciation on Fixed Assets other than oldtransmission lines has been treated as incidental and capital expenditure duringconstruction period and such expenditure are shown net of preoperativeincome. Further expenditure incurred on filing/ legal fees regarding formationof the Corporation and all expenses incurred prior to the incorporation of thecorporation &. expenditure incurred in relation to increase in authorized capitalhave been treated as Preliminary Expenses. No provision has been made forwriting off of preliminary expenses during the year. The same will be writtenoff after commencement of complete operations of the Corporation.

1. PRIOR PERIOD ADJUSTMENTS: HPPTCL followed the practice of makingadjustments for prior period items through expenses/ income of previous yearin the current year except few minor items.

J. Revenue Recognition:

1. Revenue from transmission charges is recognized on the basis of billsissued by HPPTCL during the year.

11. Revenue on short term open access charges is recognized on receiptbasis from Power system Corporation, NRLDC, SLDC and other userwhich is on the basis of actual transmission of power and directlycredited to our account.

111. Surcharge on late payment billed to HPSEB has not been taken intoaccount due to uncertainty of its realization and pending reconciliationof various accounts with HPSEBL.

IV. Revenue from other sources is recognized on accrual basis.

4

2. NOTES TO ACc;0UNTS

a. Contingent Liabilities

;

1 Contingent Liabilities not provided for in respect of: As on As on31.03.16

31.03.15(Figures Inlakh) (Figures In

lakh)---

(i) Income tax demand for F.Y.2009-10 2010-11 I 2011- 1428.42 549.95,12 I 2012-13 and 2013-14 deposited / adjusted fromadvance tax not provided in books of accounts.

(ii) Estimated amount of contract remaining to, be executed on capital account (net of

advances): INR70836.41 69261.49

US$ 12.52 3.04 !

b. Additional information required as in Part II of Schedule VI

;-----_ .. ---Particulars (Rs. in lakh)

.•....... -.-.

Yr. Ended Yr. Ended

31.03.16 31.03.2015

A) Expenditure in Foreign Currencies (Actual outgo):

- Interest on borrowings 0.00 0.00

- Commitment Charges 0.00 0.00.-.

- Foreign Travelling (US$) 0 0.00_ ....

5

/'----_._---_. __ ._---_ ..._-_._._ ..__ .__ ..__ .._--_._ ..._ ..._-_._._._ .._._ .._--_.__ ._-_._.__ ..._--,---- ----.I - Capital Expenditure (US$) ! 0.00 I 0.00\....... . 1 ···········································f···-······ ;

TOTAL:- (US$ ) ; 0.00 I 0.00 !-----1--.-10.00 10.00 I--t=J

0.39

I B) Earnings in Foreign Currencies:l.-_ .._._ _ _ __ _ - _._ _ _....... . _ ., C) Auditors remuneration:L----------- ...-..---..-----.....--...-..---.-.--.-....--..-.---.....----...i -Statutory Audit Fee

1'··_--_···_···· __ ·····__ ······_·····__ ······_·_·····..- - - - -- -.- - -- --- .

I -Tax Audit Fee!

.0._ _ +_._ _ _ _ _- ----_ _ _------_ )

0.40 10.28I

......- - - --.- ..-- - ···-- 1-····_·········_· · _·- - ;

! 0.00 10.00!

TOTAL i 0.80 10.67iI

I D) Managerial Remuneration:....JI······~S~i~~y~~d~ii~~~~~~s······ ·····················\35.39

~ontrilJtl~to_~~~dot:er=~s_===:L~C-_l~~1--Jr:::::s:~:StODi~~t~s--.----- -.---------j-~:--~~:-~r-----:-------------------+----I-------i

TOTAL 41.91 ! 29.56I

During the year ended full remuneration was paid to Managing Director and Directors afterrecovering pension amount received by them during the year.

c. During the year 2009-10, the Corporation had entered in to MOU with HPPower Corporation Limited whereby 220KV Double Circuit Kashang-BhabaTransmission Line was handed over to HPPTCL. The expenditure made byHPSEB including KKPCL after reconciliation comes to Rs.6756.00lakh. Further,as on Balance Sheet Date, the Corporation has made investment of Rs.1936.88lakh (including expenditure of Rs.292.78lakh earlier made by HPPCL) on thisTransmission Line in term of MOU. However, such assets & liabilities ofRs.6756.00lakh in respect of HPSEBLfor this project are yet to be accounted foras the project is still under construction.

d. In terms of "Himachal Pradesh Power Sector Reforms Transfer Scheme, 2010"notified by the State Govt. vide No. MPP-A(3)-lj2001-IV dated 10.06.2010transmission lines having gross value of Rs.10263.37 lakh are re-vested withHPPTCL. The written down value of assets on above date amounting to

6

Rs.6122.00lakh only has been taken in books of account and amount shown aspayable to HP State Govt.

e. During the year the Corporation has made income tax provision of Rs. 103.76lakh for the year 2015-16on Profit of Rs.314.42lakh on the basis of total incomereceived and any further distribution of income shall be accounted for as andwhen required in future but has not made any provision of Income Tax on bankinterest Income Corporation has deposited advance Income Tax of Rs.100.00lakh only.

f. Based on information available with the Corporation, there are nosuppliers/ service providers who are registered as Micro, Small and Mediumundertakings under "The Micro, Small and Medium Enterprises DevelopmentAct 2006" as on 31st March, 2015 hence the Corporation has no outstandingliability towards Micro, Small and Medium Enterprises.

g. Fixed assets possessed by the Corporation are treated as 'Corporate Assets' andnot 'Cash Generating Units' as defined by Accounting Standard (AS-28) -"Impairment of Assets". As on 31st March 2016 there were no events or changein circumstances, which indicate any impairment in the assets.

h. In terms of Notification No. MPP-A(3) 1/2001-IV dated 10.06.2010 ofGovernment of Himachal Pradesh (Department of MPP & Power) the statutoryfunction of State Transmission Utility (STU)shall be performed by Corporationalong with evacuation of power by intra-state or inter-state transmission lines.In the current year transmission income and expenses pertaining to linestransferred from HPSEB were taken into account as per bills raised. TheCorporation is still under construction period and no own constructedtransmission line and Sub Stations were commissioned during the year.However no provision has been made for surcharge billed to HPSEB Ltd. ontransmission charges income due to uncertainty of its realisation as a sum ofRs.6756.00 lakh is payable to HPSEB Ltd. on account of Kashang BhabaTransmission line transferred to HPPTCL and .therefore surcharge to beaccounted for on receipt basis. Any further distribution of income shall beaccounted for as and when required in future. The profit and Loss statementhas been prepared by taking income and all related expenses of STU &Transmission @100% and employees cost and other administrative expenses ofcorporate office @50%during the year .No depreciation of miscellaneous assetsand finance cost has been charged to this income which has been capitalized topre-operative expenses.

7

1. In the opinion of the Board of Directors, the value of current assets, loan andadvances etc. if realized in ordinary course of business, shall not be less than theamount at which the same are stated in the balance sheet.

J. The amounts in Financial Statements are presented in Indian Rupees and allfigures have been rounded off to the nearest rupee lakh and decimals thereofexcept when otherwise stated.

k. Previous year figures have been reclassified/ regrouped/ rearranged wherevernecessary to conform to this year's classification.

1. Some of the balances shown under Current liabilities, loans and advances aresubject to confirmation, reconciliation and consequential adjustment, if any.

m. Related party Disclosure:

As required by Accounting Standard (AS)-18Related party disclosure details oftransactions with the related parties are:

i) Related Parties-Key Management Personnel:Whole time Directors:

Name DesignationEr. J.P.Kalta Managing Director (w.e.f. 8.4.16 to till

date)Er. Sham Lal Sharma Managing Director(w.e.f.18.12.13 to 8.4.16)Er. S.K.Sharda Director (P&C) w.e.f.7.10.2013 to 9.1.2017.Er. Keshav Singh Attri Director (Project) w.e.f. 26.7.2014 to

26.3.2016 and Director (P&C) w.e.f.14.3.2017to till date

Er. Rajesh Singh Thakur Director( Project) w.e.f. 26.4.16 to till date

n. A sum of Rs.480.00 lakh was released by way of contribution for theestablishment of lIlT Una as per Cabinet decision of Government of H.P. during2014-15 which has been shown under Investment head of account as per NoteNo.8 of Balance Sheet.

8

o. The increased amount of Rs.50,OOO/- plus service tax towards Statutory Auditfee for F.Y 2015-16 has not been provided in the accounts and will beprovided in F.Y 2016-17.

p. The Transmission charges bill of three numbers interstate lines for the year2014-15and 2015-16were issued in September, 2016 on the basis of CERC orderdated 16.5.2016and as such income booked during the year 2016-17.

\l~~CMA&anManager Accounts Addl. G.M(Finance)

~~Er.J.~

Managing Director

For DOGER &CO.

Place: Shimla

Date: 24.6.2017

ICAI FRN : 019516N

9

--,- CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2016

Year endedParticulars Year ended 31.3.2016 31.3.2015

(A) CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax on STU & Transmission 314.42 140.65Depreciation 267.89 124.08Depreciation of Prior Period 158.47 950.55Finance Charges - -Inventories - -Other Current Assets (114.32) 39.78Loans and Advances(Short & Long term) (2,624.13) (1,576.41 )Long Term provisions 2,329.73 7,323.71Other Current Liabilities 1,095.60 1,429.62Income Tax (103.76) (45.57)Total (A) 1,323.90 8,386.41

(8) Cash flow from Investing activitiesCapital Expenditure on tangible Assets (255.42) (6,230.60)Capital Expenditure on Intangible Assets - (1.07)Net Expenditure on CWIP (14,813.46) (16,170.00)Investment in lilT Una (480.00)Total(B) (15,068.88) (22,881.67)

(C ) Cash flow from Financing ActivitiesShare Capital 4,603.00 800.00Share Application Money Pending for allotment (1,324.00) 1,796.00Repayment of Borrowings - -Proceeds from Borrowings 8,500.00 10,262.00Total (C ) 11,779.00 12,858.00IGross Total (A+8+C) (1,965.98) (1,637.26)Add: Opening Cash and Equivalents 14,901.41 16,538.66[Closinq Cash and Equivalents /J 12,935.43 14,901.40

~\A\ /b k L ~(Kaml.~

Manager (Accounts)~

Director(P&C)(CMA Arnrlt Chauhan)

AddI.G.M.(Finance)(Er. J.P .Kalta)Managing Director


Documents

-- INDEPENDENT AUDITOR'S REPORT DOGER&Co. CHARTERED ACCOUNT ANTS II.'..-----,/. (0) 0177-2656809,2656162,(M) 98170-73000-- INDEPENDENT AUDITOR'S REPORT To The Members of H.P. Power