Office of the Pr.

Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/01

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: schedule 7: inventories: Rs.
131.96 crore.

As per Accounting Standards -2 (valuation of inventories), the cost of inventories

includes cost of purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition. So transportation cost incurred to bring the
inventories was to be included in valuation of cost of inventories.
In TVNL coal has been transported from various collieries of CCL to Lalpania Plant
but while valuation of cost of coal in closing stock ignored the transportation cost and total
transportation cost were charged to Profit & Loss account.
This results in non-compliance of accounting standards 2 (valuation of inventories)
issued by The Institute of Chartered Accountants of India.

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/02

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: schedule 7: inventories: Rs.
131.96 crore.

It was noticed that coal stock of TTPS varies between stock book maintained by
Lalpania Plant and stock shown in the book of accounts. The closing balance of stock as on
31.03.2011 was 125426.39 MT whereas stock as per accounting record was 336408.441 MT
has been shown.
The difference quantities of 210982.05 MT need to be reconciled.

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/03

Dated: 12.08.2016

Ref: Profit & Loss Account: Consumption of material: Schedule 14: Rs.364.44 Crore
As per significant accounting policies of TVNL (Point no. 6) - Inventories are valued at the
Weighted Average Cost basis. It was noticed that value of issue of materials and closing stock
of materials (LDO, HSD and Coal) were calculated as per weighted average method but as
per calculation made by audit on the basis of weighted average method, there is difference in
valuation figure.
As per weighted average method (calculated by TVNL) the issue value of LDO, HSD and
coal were Rs.517272576.67,21447593.47 and Rs.2266023004.72 but the issue value should
be Rs.517395340.14, 21286282.284 and Rs.2266922707.163 respectively as arrived by the
audit. Due to difference between value taken in accounts and actual value calculated by audit
according to weighted average method, the value of LDO, HSD and coal have been
understated by Rs.122764.14, (-)161311.186 and Rs.899702.443.
Due to difference in valuation figure as per weighted average method has resulted into
overstatement of consumption of material by Rs.8.61 lakh.
Assistant Audit Officer
Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/04

Dated: 12.08.2016

Ref: Notes to Accounts

Tenughat Dam Divison ,Tenughat has claimed ( May 2011 ) for consumption of water from
Tenughat Reservoir by Tenughat Thermal Power Station, Lalpania for condenser Colling
amounting to Rs.778.92 crore which include Rs.753.83 crore upto March 2011. This amount
has neither been accepted nor denied by the TVNL management.
As per accounting standard (AS) 29 (provisions, contingent liabilities and contingent assets),
disclosure are required for the contingent liability where there is a possible obligation or a
present obligation that may, but probably will not, require an outflow of resources.
Since the amount is still under consideration by the management, the above claim
should be shown under contingent liability according to accounting standard 29.

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/05

Dated: 12.08.2016

Ref: Balance Sheet: Current liabilities & provisions: schedule 11: Rs. 1086.65 Crore
TVNL provided liabilities for Pension, Gratuity and Leave Encashment of all existing
and retired employees as on 31.03.2011 but no provision has been made for those employees
of TVNL who have been expired and their claims have not been processed till date. It was
seen total 37 numbers of employees were expired from the year April 2000 to March 2011.
Claims for gratuity and leave encashment of 30 expired employees and pension of all 37
expired employees were not processed for payment till date for the death employee and
nothing have been provided as liabilities.
The liabilities arrived towards Gratuity, leave encashment and pension on an average
basis comes to Rs. 14.09 crore. Details are shown below:
Head
Particulars
Amounts
Gratuity
30*1,59,127
4773810
leave encashment
30*94619
2838570
Pension
37*36,03,665
133335605
140947985
Non provision of the liabilities towards gratuity, leave encashment and pension for
expired employees from the year April 2000 to March 2011 has resulted into understatement
of loss and current liabilities and provision by Rs.14.09 crores.
Actual liabilities towards gratuity, leave encashment and pension of expired
employees since inception to till date for those whose payment were not made, is required to
be provided.
Assistant Audit
Officer
Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/06

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: cash & bank balance:
schedule 9: Rs. 38.58 crore
Bank reconciliation statement of SBI, Lalpania revealed that there was totalling
difference of Rs. 25,43,026.40 as on 31.03.2011 which related to the year 2000 to 2005 is Rs.
24,62,522.02 & for the year 1999 to 2000 is Rs. 80,504.38.
Immediate action is to be taken to reconcile the difference and this fact is to be
disclosed in notes of accounts.

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/07

Dated: 12.08.2016

Ref: Profit & Loss Account: Consumption of material: Schedule114: Rs.364.44 Crore
It was noticed that total amount of coal transportation charges of TTPS varies between
coal transportation book maintained by Lalpania Plant and coal transportation charges shown
in the book of accounts. The total amount towards transportation of coal of 1599206.720 MT
during 2010-11 by Lalpania Plant was Rs. 29,28,01,943.00 whereas the total amount shown
in the book of accounts was Rs. 24,22,55,676.00(paid and provided), hence less coal
transportation charges of Rs. 5,05,46,267.00 was booked in the accounts for the year 201011.
Short provision of coal transportation charges has resulted in
understatement of current year loss and current liabilities and provision by
Rs.5.58 crore (Rs.29.81 crore-Rs.24.23 crore).

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/08

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: Loan & Advances: schedule
10: Rs. 75.83 crore
TVNL had considered doubtful claim of Rs. 17,94,00,000.00 under claim
receivable from CCL. Since company itself considered receivable claims as
doubtful, it requires suitable provision but no provision has been made in
the accounts. Provision should be made as above claim was considered
doubtful.

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/09

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: Sundry Debtors: schedule 10:
Rs. 1413.23 crore
Sundry debtors as on 31.03.2011 was shown as Rs.14,13,22,64,707 which includes
debtors for less than six months of Rs. 1,97,75,97,883.00 and more than six months of Rs.
12,15,46,66,824. But actual debtors for less than six months was Rs. 11,285,932,570.00 and
more than six months was Rs. Rs2,846,332,137.
Presentation in books of accounts is to be rectified.
Assistant Audit Officer
Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.

Office of the Pr. Accountant General (Audit)

Jharkhand, Ranchi 834002

Audit Memo No: - TVNL / Accounts audit /2010-11/10

Dated: 12.08.2016

Ref: Balance Sheet: Current Assets, loans and Advances: schedule 7: inventories: Rs.
131.96 crore
It was noticed that total quantities of LDO purchased & its landed cost varies between
stock book maintained by TVNL and shown in the books of account. The total quantity of
LDO & its landed cost as per accounts as on 31.03.2011 was 10446.388 KL & Rs.
50,49,45,216.50 respectively whereas as per book maintained by TVNL was 9965.213 KL &
Rs. 47,77,22,525.39 has been shown
After confirming the above facts & figure which creates differences of quantities &
landed cost between stock book maintained by TVNL and shown in the books of account
needs to produce actual data of above figure to audit and also month-wise actual data of total
quantities & landed cost of purchased LDO to be furnished to audit. Revised monthly
summary of LDO indicating opening balance, receipt, issue and closing balance with
value( purchase value) may be furnished and necessary correction may be made with details
calculation sheet..

Assistant Audit Officer

Annual Accounts Audit Party
TVNL, Ranchi
To,
The Finance Controller
TVNL, Ranchi
Copy to,
M/s V.RAHTOGI & CO.
Chartered Accountants
First Floor, Sarjana Bldg.
Ranchi-834001.