REC- 1-51.p65 - Rural Electrification Corporation Ltd.
REC- 1-51.p65 - Rural Electrification Corporation Ltd.
REC- 1-51.p65 - Rural Electrification Corporation Ltd.
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78<br />
To<br />
The Members of<br />
<strong>Rural</strong> <strong>Electrification</strong> <strong>Corporation</strong> <strong>Ltd</strong>,<br />
1. We have audited the attached Balance Sheet of RURAL<br />
ELECTRIFICATION CORPORATION LIMITED as at 31st March 2010 and also the Profit & Loss Account and the Cash<br />
Flow Statement for the year ended on that date annexed<br />
thereto. These financial statements are the responsibility of<br />
the Company’s management. Our responsibility is to express<br />
an opinion on these financial statements based on our audit.<br />
2. We conducted our audit in accordance with the auditing<br />
standards generally accepted in India. Those standards<br />
require that we plan and perform the audit to obtain<br />
reasonable assurance about whether the financial statements<br />
are free of material misstatement. An audit includes<br />
examining, on a test basis, evidence supporting the amounts<br />
and disclosures in the financial statements. An audit also<br />
includes assessing the accounting principles used and<br />
significant estimates made by the management, as well as<br />
evaluating the overall financial statements presentation. We<br />
believe that our audit provides a reasonable basis for our<br />
opinion.<br />
3. As required by the Companies (Auditors’ Report) Order, 2003<br />
(as amended) issued by the Central Government of India in<br />
terms of sub-section (4A) of Section 227 of the Companies<br />
Act, 1956, we enclose in the Annexure a statement on the<br />
matters specified in paragraphs 4 and 5 of the said order to<br />
the extent applicable to the Company.<br />
4. Further to our comments in the Annexure referred in<br />
paragraph 3 above, we report that:<br />
i) We have obtained all the information and explanations<br />
which to be best of our knowledge and belief were<br />
necessary for the purposes of our audit;<br />
ii) In our opinion, proper books of account as required by<br />
law have been kept by the Company so far as appears<br />
from our examination of such books;<br />
iii) The Balance Sheet, Profit & Loss account and Cash<br />
Flow Statement dealt with by this report are in<br />
agreement with the books of account;<br />
iv) In our opinion, the Balance Sheet, Profit & Loss account<br />
and Cash Flow Statement dealt with by this report<br />
comply with the Accounting Standards referred to in<br />
sub-section (3C) of Section 211 of the Companies Act,<br />
1956 to the extent applicable.<br />
v) Vide notification No. 2/5/2001-CL.V dated 22.03.2002<br />
of the Department of Company Affairs, Government of<br />
India, Government Companies have been exempted<br />
from applicability of the provisions of Section 274(1)(g)<br />
of the Companies Act, 1956.<br />
AUDITORS’ REPORT<br />
vi) In our opinion and to the best of our information and<br />
according to explanations given to us, the said financial<br />
statements read together with Note No. 21(B) in<br />
schedule 17 of Notes on Accounts regarding Deferred<br />
Tax Liability that after considering the opinion given<br />
by various concerned authorities, and also the practice<br />
followed by other similarly placed Institutions of not<br />
creating Deferred Tax Liability (DTL) on account of<br />
special reserve created and maintained under Section<br />
36(1)(viii) of the Income Tax Act 1961, the Company<br />
is of the opinion that there is no requirement for DTL<br />
as per AS 22 of ICAI. Accordingly, the Company has<br />
not created Deferred Tax Liability (DTL) of Rs. 155.65<br />
Crore on account of special reserve created and<br />
maintained under Section 36(1)(viii) of the Income Tax<br />
Act, 1961, for the year ended on 31st March, 2010 and<br />
has also reversed the DTL of Rs. 964.57 Crore created<br />
in earlier years on this account as per Notes on<br />
Accounts, note no. 21(B). The reversal of DTL is done<br />
by crediting General Reserve by Rs. 638.80 Crore for<br />
the financial years upto 2005-06 and through Profit and<br />
Loss Appropriation by Rs. 325.77 Crore for the financial<br />
year 2006-07 to financial year 2008-09. Had the<br />
company followed the same accounting treatment<br />
regarding creation of DTL as in earlier years, the profit<br />
after tax for the year ended 31.03.2010 would have been<br />
Rs. 1845.77 Crore against reported profit of Rs. 2001.42<br />
Crore and Reserve & Surplus would have been Rs.<br />
8,972.66 Crore against reported Reserve & Surplus of<br />
Rs. 10,092.88 Crore as on 31.03.2010, together with<br />
other notes and accounting policies thereon, give the<br />
information required by the Companies Act 1956, in<br />
the manner so required and give a true and fair view<br />
in conformity with the accounting principles generally<br />
accepted in India:<br />
a) In the case of the Balance Sheet of the State of Affairs of the<br />
Company as at 31st March 2010.<br />
b) In the case of Profit & Loss Account, of the Profit of the<br />
Company for the year ended on that date; and<br />
c) In the case of the Cash Flow Statement, of the Cash flows for<br />
the year ended on that date.<br />
For Bansal & Co. For K.G. Somani & Co.<br />
Chartered Accountants Chartered Accountants<br />
Firm Regn. No. 001113N Firm Regn. No. 006591N<br />
(D.S Rawat) (Bhuvnesh Maheshwari)<br />
Partner Partner<br />
M. No.83030 M. No. 88155<br />
Place: New Delhi<br />
Date : 19.05.2010