We have audited the accompanying standalone financial statements of SJVN Limited ("the Company”), which comprise the Balance Sheet as at March 31,2025, the Statement of Profit and Loss (including Other
Comprehensive Income), Statement of changes in Equity, Statement of Cash Flows for the year then ended, and Notes to the financial statements including a summary of the material accounting policies and
other explanatory information (hereinafter referred to as "the standalone financialstatements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”)
in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India and Indian Accounting Standards prescribed under section 133 of the Act read
with companies (Indian Accounting Standard) Rules 2015, as amended, (Ind AS) and other accounting principles generally accepted in India, ofthe state of affairs (financial position) ofthe Company as at March
31,2025 and its profit (financial performance including Other Comprehensive Income), Change in Equity and its cash flows for the year ended on that date.
Basis forOpinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditor's Responsibilitiesfor the Audit ofthe standalone Financialstatements section of our report. We are independent ofthe Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financialstatements under the provisions of
the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have
obtained, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financialstatements.
Emphasis of Matter:
We draw attention to the following matters:
a. Note No. 2.31 with respect to The CERC has notified the Central Electricity Regulatory Commission (Terms and Conditions of T ariff) Regulations, 2024 vide Order dated 15 March 2024 (Regulations 2024) for
determination of tariff for the period 2024-2029. Pending issue of provisional/final tariff orders with effect from 1 April, 2024, billing to beneficiaries is done provisionally in accordance with the tariff
approved and applicable on 31st March, 2024 in respect of Hydro Power Stations as per above regulations except for Naitwar Mori Hydro Power Station (NMHPS). Power generated by NMHEP is sold through
Power Exchange and bilateral agreement with customers.
b. Note No.2.40 In accordance with Ind AS 8, of Accounting Policies, Changes in Accounting Estimates and Errors’ Ind AS1, 'Presentation of Financial Statements’ the Company has retrospectively restated its
Balance Sheet as at 31st March 2024 and 1st April 2023 (beginning ofthe preceding period) and Statement of Profit and Loss for the year ended 31st March 2024 wherever necessary.
c. Note No. 2.64 with respect to Three hydro power projects-210 MWLuhri Hydro Electric Project Stage-1,382 MW Sunni Dam Hydro Electric Project and 66 MW Dhaulasidh Hydro Electric Project were allotted to
SJVN through Memorandum of Understanding (MOU) by the Government of Himachal Pradesh (GoHP). Now, GoHP seeks to re-negotiate the previously agreed terms & conditions and relaxations in respect of
these projects before signing of Implementation Agreement. SJVN has submitted the replies to the above notice and also filed a petition in the Hon'ble High Court of Himachal Pradesh to address the issue.
The Hon'ble High Court has directed GoHP that no coercive action shall be taken against SJVN with regard to the subject matter of dispute. The case is currently pending and the company is actively engaged
in resolving the matter. However, vide a letter dated 22.04.2025, GoHP has indicated its intention to consider taking backthese projects, along with appointing an evaluator in this regard.
d. Attention is invited to the Note 2.2 regarding Survey and Investigation work of Devasari Hydro Electric Project in the State of Uttarakhand which has been put on hold as per the directions of Ministry of Power,
Government of India vide letter dated 6th July 2021. Cost (incl. capital work in progress) incurred on the project upto 31st March 2025 is Rs. 24988 Lakhs (Incl. Rs. 19842 Lakhs as CWIP) (up to previous year as
on 31st March 2024, it was Rs. 24786 Lakhs incl. Rs. 19581 Lakhs as CWIP). The company has taken up the matter with Ministry of Power, Government of India and Govt, of Uttarakhand for allowing the
activities ofthe Project and the Management of SJVN Ltd. is ofthe view that the hold shall be removed.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, incur professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the
context of our audit of the standalone financialstatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For each matter below, description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our
report.
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S.No.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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1
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Contingent Liabilities and provisions:
There are number of litigations pending before various forums against the company and the
management's judgement is required for estimating the amount to be disclosed as contingent
liability and for creating the adequate amount of provision, wherever required. Also, the
company has extended a guarantee amounting to TI.020 crore for the loan availed by SAPDC,
a wholly owned subsidiary of SJVN Ltd.
We identified this as a key audit matter because the estimates on which these amounts are
based involve a significant degree of management judgement in interpreting the cases and it
may be subject to management bias.
(Refer Note No. 2.49 to the Standalone Financial Statements, read with the Material
Accounting Policy No.1.18)
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We have obtained an understanding of the company's internal instructions and procedures in respect
of estimation and disclosure of contingent liabilities and adopted the following audit procedures: -
Ý understood and tested the design and operating effectiveness of controls as established by the
management for obtaining all relevant information for pending litigation cases;
Ý discussed with the management any material developments and latest status of legal matters;
Ý examined management’s judgements and assessments whether provisions are required;
Ý considered the management assessments of those matters that are not disclosed as the
probability of material outflow is considered to be remote;
Ý reviewed the adequacy and completeness of disclosures;
Based on the above procedures performed, the estimation and disclosures of contingent liabilities and
creation of provisions are considered to be adequate and reasonable.
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2
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Property, Plant & Equipment:
There are areas where management judgement impacts the carrying value of property plant
and equipment and their respective depreciation rates. These include the decision to
capitalize or expense costs; the annual asset life review; the timeliness of the capitalization
of assets and the use of management assumptions and estimates for the determination
or the measurement and recognition criteria for assets retired from active use. Due to the
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We assessed the controls in place over the fixed asset cycle, evaluated the appropriateness of
capitalization process Performed tests of details on costs capitalized, the timeliness and accuracy of
the capitalization of the assets and the de-recognition criteria for assets retired from active use. In
performing these procedures, we reviewed the judgements made by management including the nature
of underlying costs capitalized; determination of realizable value ofthe assets retired from active use
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S.No.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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materiality in the context of the balance sheet of the Company and the level of judgement
and estimates required, we consider this to be as area of significance.
(Refer Note No. 2.1to the Standalone Financial Statements, read with the Material Accounting
Policy No.1.3)
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and the appropriateness of asset lives applied in the calculation of depreciation; the useful life of
assets is taken as stipulated by the CERC and as per the technical assessment of the management.
We have observed that the management has regularly reviewed the aforesaid judgements and there
are no material deficiencies in measurement and recognition of property, plant and equipment.
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3
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Capital work-in-progress (CWIP):
The company is involved in various capital works like construction of new power projects,
installation of new plant and machinery, civil works etc. These projects/works take a
substantial period of time to get ready for intended use and due to their materiality in the
context of the balance sheet of the Company, this is considered to be an area which had the
significant effect on the overall audit strategy and allocation of resources in planning and
completing our audit.
(Refer Note No. 2.2 to the Standalone Financial Statements, read with the Material Accounting
Policy No.1.4)
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We performed an understanding and evaluation ofthe system of internal control over the capital work-
in-progress, with reference to identification and testing of key controls.
When it is ready for the intended use, we assessed the progress of the project and the intention and
ability ofthe management to carryforward and bring the asset to its state of intended use.
We assessed the timeliness and accuracy of capitalization of assets when it is ready for the intended
use.
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4
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Deferred Tax Asset relating to MAT Credit Entitlement:
The company has recognized deferred tax asset relating to MAT credit entitlement during the
year. Utilization of MAT credit will result in lower outflow of Income Tax in future years. The
recoverability of this deferred tax asset relating to MAT credit entitlement is dependent upon
the generation of sufficient future taxable profits to utilize such entitlement within the
stipulated period prescribed under the Income Tax Act,1961.
We identified this as a key audit matter because due to use of management estimate in
forecasting future taxable profits for recognition of MAT credit entitlement considering the
recoverability of such tax credits within allowed time frame as per the provisions of the
Income Tax Act,1961. (Refer Note 2.8)
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We have obtained an understanding for recognition of deferred tax asset relating to MAT credit
entitlement. We have reviewed the estimate of management regarding future taxable profits and
reasonableness ofthe considerations /assumptions used for the same.
Based on the above procedures performed, the recognition and measurement of Deferred tax asset
relating to MAT credit entitlement are considered adequate and reasonable. (Refer Note 2.8)
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Other Matter
The Standalone Financial Statements of the Company for the year ended 31st March, 2024, prepared in accordance with Ind AS had been audited by the predecessor auditors and the revised report of the
predecessor auditors dated 5th Aug, 2024 revised, expressed an unmodified opinion.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report
including Annexure to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, (but does not include the standalone financial statements and our auditor’s report
thereon), which are expected to be made available to us after the date of this auditors’ report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion hereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions, if
required.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. except the Company was not in compliance with the provisions of
Regulation 17 and 25(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding the requirements of having at least half of the Board of Directors as the Independent Directors and
filling the vacancy of the Independent Directors within Specified Period.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. except the Company was not in compliance with the provisions of
Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 regarding the requirements of
having One Woman Director on the Board of the Company. While the audit has been conducted in accordance with applicable regulation, the auditor is not responsible for the company’s failure to comply with this
specific requirement. Non-Compliance may attract monetary penalties on the company and its officers under the Companies Act, 2013.
Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Board of Directorsis responsible for the matters stated in section 134(5) ofthe Actwith respect tothe preparation of these standalone financial statements that give a true and fair view
of the financial position, financial performance, total comprehensive income, changes in equity and cash flows ofthe Company in accordance with accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) prescribed under section 133 ofthe Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets ofthe Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Ý Identify and assess the risks of material misstatement ofthe standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Ý Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Ý Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Ý Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Ý Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the
effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated incur report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 ("the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A" a statement on the matters specified
in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(5) of the Act, for the additional directions under the Companies Act’ 2013, we have annexed Annexure “B” to this report for the additional direction under section 143(5) of the
Companies Act’ 2013 as issued by the Comptroller and Auditor General of India.
3. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the statement of cash flows and Statement of Changes in Equity dealt with by this Report are in agreement
with the relevant books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.
e) In view of exemptions given vide Notification No. G.S.R. 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, the provisions of Section 164 (2) of the Companies Act, 2013 regarding
disqualification of directors are not applicable to the company.
f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, kindly refer to our separate report in Annexure “C"
g) As per Notification No. GSR 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, the provisions of Section 197 of the Companies Act, 2013 is not applicable to the Government Companies.
Accordingly, reporting in accordance with requirements of provisions of section 197(16) of the act is not applicable on the company.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our
information and according to the explanations given to us:
i. The company has disclosed the impact of pending litigations on itsfinancialposition in its standalone financial statements. Refer Note No. 2.49 to the standalone financial statements;
ii. The company has made provision, as required under the applicable law or accounting standards, for materialforeseeable losses, if any, on long term contracts including derivative contracts;
iii. There has been no delay in transferring amounts which were required to be transferred to Investor Education and Protection Fund by the company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested by the company to or in any other person(s) or entities,
including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any
manner by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entities including foreign entities ("Funding
Parties") with the understanding that such company shall whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
funding party (ultimate beneficiaries) or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.
(c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the above representations
given by the management contain any material mis-statement.
v. The dividend declared or paid during the year by the company is in compliance of section 123 of the Act.
vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log)
facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we did not come across any instance of audit
trail feature being tampered with.
For Charanjit Singh & Associates
Chartered Accountants
FRN 015328N
CA. Avneet Singh
Partner
Membership No: 526217
UDIN: 25526217BMIUCV8213
Place: New Delhi
Date: 21.07.2025
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