Report on the Ind AS financial statements
We have audited the accompanying standalone Ind AS financial statements of Adani Ports and Special Economic Zone Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss including other comprehensive income, Cash Flow Statement and Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Ind AS financial statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to:
(a) Note 38(l) of the accompanying standalone Ind AS financial statements regarding recognition of Minimum Alternate Tax (‘MAT’) credit entitlement in respect of certain interest income based on the consideration that the Company would be able to claim tax holiday benefits on the same, as per provisions of section 80IAB of the Income Tax Act, 1961, more fully described in the said note.
(b) Note 41(a) of the accompanying standalone Ind AS financial statements regarding the basis of recognition of certain projects service revenue during the earlier year, as more fully described in the said note.
(c) Note 4(c)(i) of the accompanying standalone Ind AS financial statements which indicates that one of the subsidiary company has accumulated losses and its net worth has been eroded, the subsidiary company has incurred a net cash loss during the current year and previous year. These conditions along with other matters set forth in Note 4(c)(i), indicate the existence of material uncertainty that may impact the subsidiary company’s ability to continue as a going concern. However, the financial statements of the subsidiary company have been prepared on going concern basis for the reasons stated in the said Note.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
(g) 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, 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 its financial position in its standalone Ind AS financial statements - Refer Note 38 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 15 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. The Company has provided requisite disclosures in Note 43 to these standalone Ind AS financial statements as to the holdings and dealing in Specified Bank Notes as defined in the notification S.O. 3407 (E) dated November, 08, 2016 of the Ministry of Finance during the period from November 8, 2016 to December 30, 2016. Based on the audit procedure performed and the representation provided to us by the management we report that the disclosures are in accordance with the books of accounts maintained by the Company more so described in Note 43.
Annexure 1 referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date for the year ended March 31, 2017
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion, physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to information and explanations given by the management, the title deeds of immovable properties, included in fixed assets except for the immovable property in the nature of reclaimed land having Gross Book Value (GBV) aggregating RS.202.21 crores and Net Book Value (NBV) aggregating RS.171.87 crores and residential flats having GBV of RS.139.94 crores and NBV of RS.125.63 crores which are not registered in the name of the Company. Also refer note 3(a) of the standalone Ind AS financial statements.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to a company covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the company’s interest.
(b) The Company has granted loans to a firm covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the receipts are regular and there were no instalment of loan due during the year.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, and considering the legal opinion taken by the Company on applicability of section 185 of the Companies Act, 2013, in respect of certain loan transaction and that the same have been given in the ordinary course of the business, the Company has complied with the provisions of section 185 of the Companies Act 2013. Further, based on the information and explanations given to us, being an infrastructure company, provision of section 186 of the Companies Act, 2013 is not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the services of the Company
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, service tax, sales tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of service tax, customs duty, excise duty and income tax on account of any dispute, are as follows:
Name of the statute
|
Nature of Tax
|
Amount (Rs. in Crores)
|
Period to which the amount relates
|
Forum where dispute is pending
|
Customs Act, 1962
|
Custom Duty
|
2.00
|
June, 2008
|
Commissioner of Customs & Central Excise, Ahmedabad
|
Customs Act, 1962
|
Custom Duty
|
0.14
|
July, 2003
|
Assistant Commissioner of Customs, Mundra
|
Customs Act, 1962
|
Custom Duty
|
0.25
|
August, 2007
|
Deputy Commissioner of Customs, Mundra
|
Finance Act, 1994
|
Service Tax
|
6.72
|
December 2004 to March 2006
|
Supreme court
|
Service Tax
|
0.56
|
October 2003 to August 2005
|
Commissioner (Appeals) Rajkot
|
Service Tax
|
304.71
|
April 2006 to September 2011
|
High Court of Gujarat
|
Service Tax
|
0.61
|
September 2009 to March 2010
|
Commissioner of Service Tax, Ahmedabad.
|
Service Tax
|
190.04
|
April 2011 to March 2014
|
Commissioner / Addl. Commissioner of Service Tax, Ahmedabad
|
Finance Act, 1994
|
Service Tax
|
6.72
|
April 2004 to August 2009
|
High Court of Gujarat
|
Service Tax
|
0.17
|
April 2009 to March 2011
|
Commissioner of Service Tax, Ahmedabad
|
Income Tax Act, 1961
|
Income Tax
|
75.48
|
AY 2009 - 10 to AY 2011 - 12
|
Income Tax Appellate Tribunal CIT (Appeal)
|
Income Tax
|
6.74
|
AY 2012 - 13 to AY 2013 - 14
|
|
|
|
|
|
|
(viii) In our opinion and according to information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company does not have any outstanding dues to government during the year.
(ix) In our opinion and according to the information and explanations given by the management and on an overall examination of the balance sheet, the monies raised by way debt instruments in the nature of foreign currency bonds and term loans were applied for the purposes for which those were raised, though idle/surplus funds which were not required for immediate utilization have been temporarily invested in fixed deposits / mutual funds.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Arpit K Patel
Place of Signature: Ahmedabad Partner
Date: May 24, 2017 Membership Number: 34032
We have audited the accompanying standalone financial statements of
Adani Ports and Special Economic Zone Limited ("the Company"), which
comprises the Balance Sheet as at March 31, 2016, the Statement of
Profit and Loss and Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information
Management''''s Responsibility for the Financial Statements
The Company''''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the 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 the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company''''s Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31, 2016, its profit, and its cash flows for the year ended on
that date.
Emphasis of Matter
We draw attention to
(a) Note 36(m) of the accompanying standalone financial statements
regarding recognition of Minimum Alternate Tax (''''MAT'''') credit
entitlement in respect of certain interest income based on the
consideration that the Company would be able to claim tax holiday
benefit on thesame, asper provision of section 80IAB of the Income Tax
Act, 1961, more fully described in the said note.
(b) Note 39 of the accompanying standalone financial statements
regarding the basis of recognition of certain projects service revenue
during the previous year, as more fully described in the said note.
(c) Note 42 of the accompanying standalone financial statements
regarding the accounting treatment followed by, as per the composite
scheme of arrangement between Adani Enterprises Limited and the
Company, approved by the High Court of Gujarat.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''''s report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the 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 Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financia controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure 2" to this
report;
(g) 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, 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 its
financial position in its financial statements - Refer Note 36 to the
financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long- term contracts including derivative contracts - Refer Note 8
to the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
Annexure 1 referred to in Paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date for the year ended
March 31, 2016
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion, physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) According to information and explanations given by the management,
the title deeds of immovable properties, included in fixed assets
except for the immovable property in the nature of reclaimed land
having Gross BookValue (6BV) aggregating Rs.202.21 crores and Net Book
Value (NBV) aggregating Rs. 181.35 crores and residential flats having
6BV of Rs. 131.04 crores and NBV of Rs. 119.33 crores which are not
registered in the name of the Company. Also refer note 12 of the
financial statements.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies were
noticed on such physical verification.
(iii) (a) The Company has granted loans to twenty two companies covered
in the register maintained under section 189 of the Companies Act,
2013. The loans have been granted based on approval of Finance
Committee at varying terms and conditions which in our opinion and
according to the information and explanations given to us, the terms
and conditions are generally not prejudicial to the Company''''s interest.
(b) In respect of loans granted to parties covered in the register
maintained under section 189 of the Companies Act, 2013, repayment of
the principal amount and payment of interest has been regular, except,
in respect of certain loan transactions aggregating Rs. 4,500.35 crores
whereby the Company has amended/extended/rolled over the Schedule of
repayment of principal and payment of interest, rate of interest, than
as stipulated at the time of grant of loan
(c) Read with paragraph (iii)(b) above, there are no amounts of loans
granted to companies, firms or other parties listed in the register
maintained under section 189 of the Companies Act, 2013 which are
overdue for more than ninety days,
(iv) In our opinion and according to the information and explanations
given to us, and considering the legal opinion taken by the Company on
applicability of section 185 of the Companies Act, 2013, in respect of
certain loan transactions and that the same have been given in the
ordinary course of the business, the Company has complied with the
provisions of section 185 of the Companies Act 2013. Further, based on
the information and explanations given to us, being an infrastructure
company, provision of section 186 of the Companies Act, 2013 is not
applicable to the Company and hence not commented upon
(v) The Company has not accepted any deposits from the public,
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company,
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'''' state insurance, income tax, sales tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues applicable to it
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''''
state insurance, income tax, service tax, sales tax, duty of custom,
duty of excise, value added tax, cess and other material statutory dues
were outstanding, at the year end, for a period of more than six months
from the date they became payable
(c) According to the records of the Company, the dues outstanding of
service tax, customs duty, excise duty and income tax on account of any
dispute, are as follows
Name of Nature of Amount Period to which
the amount Forum where dispute
is pending
Statute Tax (Rs. in
Crores) relates
Customs Act, Custom Duty 2.00 Jun-08 Commissioner of
Customs 8-Central
Excise,
1962 Ahmedabad
Customs Act, Custom Duty 0.14 July, 2003 Assistant
Commissioner of
Customs,
1962 Mundra
Customs Act, Custom Duty 0.25 August, 2007 Deputy
Commissioner of
Customs, Mundra
1962
Finance Act, Service Tax 6.72 December 2004
to March Supreme court
1994 2006
Service Tax 0.56 October 2003 to
August Commissioner
(Appeals) Rajkot
2005
Service Tax 42.51 April 2006 to
September Customs, Excise
and Service
Tax Appellate
2007 Tribunal, Ahmedabad
Service Tax 66.96 October 2007 to
September Customs, Excise and
Service Tax
Appellate
2008 Tribunal, Ahmedabad
Service Tax 77.54 October 2008 to
September Customs, Excise
and Service
Tax Appellate
2009 Tribunal, Ahmedabad
Service Tax 0.61 September 2009
to March Commissioner of
Service Tax,
Ahmedabad 2010
Service Tax 116.84 October 2009 to
September Customs, Excise and
Service Tax
Appellate
2011 Tribunal, Ahmedabad
Finance Act, Service Tax 0.87 April 2011 to September Customs,
Excise and
Service Tax
Appellate
1994 2011 Tribunal, Ahmedabad
Service Tax 30.64 April 2011 to
March 2012 Commissioner of
Service Tax,
Ahmedabad
Service Tax 23.36 April 2012 to
September Commissioner/Addl.
Commissioner of
2012 Service Tax,
Ahmedabad
Service Tax 28.35 October 2012 to
March 2013 Commissioner/Joint
Commissioner of
Service Tax,
Ahmedabad
Service Tax 26.06 April 2013 to
September Commissioner/Joint
Commissioner of
2013 Service Tax,
Ahmedabad
Service Tax 34.41 October 2013
to March Commissioner/Joint
Commissioner of
2014 Service Tax,
Ahmedabad
Finance Act, ServiceTax 6.72 April 2004 to
August 2009 High Court of
Gujarat
1994 Service Tax 0.15 April 2009 to
March 2010 Commissioner of
Service Tax,
Ahmedabad
Service Tax 0.02 2010-11 Commissioner of
Service Tax,
Ahmedabad
Income Tax Income Tax 19.76 AY 2009-10 Income Tax
Appellate Tribunal
Act 1961 Income Tax 11.98 AY 2010-11
Income Tax 41.29 AY 2011-12
Income Tax 12.59 AY 2012-13 CIT (Appeal)
(viii) In our opinion and according to information and explanations
given by the management, the Company has not defaulted in repayment of
dues to financial institutions, banks or debenture holders. The Company
does not have any outstanding dues to government during the year.
(ix) In our opinion and according to the information and explanations
given by the management and on an overall examination of the balance
sheet, the monies raised by way debt instruments in the nature of
foreign currency bonds and term loans were applied for the purposes for
which those were raised, though idle/ surplus funds which were not
required for immediate utilization have been temporarily invested in
fixed deposits/ mutual funds.
(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given by the management,
we report that no fraud by the Company or no fraud on the Company by
the officers and employees of the Company has been noticed or reported
during the year.
(xi) According to the information and explanations given by the
management, we report that the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Companies Act,
2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore,
the provisions of clause 3(xii) of the order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the
management and considering the legal opinion obtained by the management
in respect of transactions related to advance given for purchase of
equity shares and certain immovable properties that these transactions
have been entered into with the related parties in the ordinary course
of business and transactions with related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and
the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards,
(xiv) According to the information and explanations given to us and on
an overall examination of the balance sheet, the company has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review and hence,
reporting requirements under clause 3(xiv) are not applicable to the
Company and hence, not commented upon
(xv) According to the information and explanations given by the
management, the Company has not entered into any non-cash transactions
with directors or persons connected with him as referred to in section
192 of Companies Act, 2013
(xvi) According to the information and explanations given to us, the
provisions of section 45-IA of the Reserve Bank of India Act, 1934 are
not applicable to the Company
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Arpit K. Patel
Place of Signature: Ahmedabad Partner
Date : May 03, 2016 Membership Number: 34032
We have audited the accompanying standalone financial statements of
Adani Ports and Special Economic Zone Limited ("the Company"), which
comprise the Balance Sheet as at March 31,2015, the Statement of Profit
and Loss and Cash Flow Statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the 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 the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company''s Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
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
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31,2015, of its
profit and its cash flows for the year ended on that date.
Emphasis of Matter
(i) We draw attention to Note 40 of the financial statements regarding
the basis of recognition of project service revenue for the year ended
March 31,2015, as more fully described in the said note.
(ii) We draw attention to Note 37(o) of the financial statements
regarding the recognition of Minimum Alternate Tax (''MAT'') Credit
Entitlement in respect of certain interest income based on the
consideration that the Company would be able to claim tax benefit on
the same, as per provision of section 80IAB of the Income Tax Act,
1961, more fully described in the said note.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the 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 Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) 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, 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 its
financial position in its financial statements - Refer Note 37 to the
financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts - Refer Note 8 to
the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 on other legal and regulatory
requirement of our report of even date Re: Adani Ports and Special
Economic Zone Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion, physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(ii) (a) The inventory of stores and spares, fuel and lubricants has
been physically verified by the management during the year. In our
opinion, the frequency of such physical verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to fourteen companies covered
in the register maintained under section 189 of the Companies Act, 2013.
In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest has been regular.
(b) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 189 of
the Companies Act, 2013.
(iv) Part of the Company''s purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
The activities of the Company do not involve sale of goods. During the
course of our audit, we have not observed any major weakness or
continuing failure to correct major weakness in internal control system
of the company in respect of these areas.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'' state insurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, value added taxes, cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
wealth tax, service tax, sales tax, customs duty, excise duty and other
undisputed statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the information and explanation given to us, the dues
outstanding of service tax, customs duty, excise duty and income tax on
account of any dispute, are as follows:
Name of the Statute Nature of Tax Amount in Period to which the
Rs Crores amount relates
Customs Act, 1962 Custom Duty 2.00 June, 2008
Custom Duty 0.14 July, 2003
Custom Duty 0.25 August, 2007
Cost recovery 6.16 FY 2013-14 &
charges 2014-15
Finance Act, 1994 Service Tax 6.72 December, 2004 to
March, 2006
Service Tax 0.56 October, 2003 to
August, 2005
Service Tax 42.51 April, 2006 to
March, 2008
Service Tax 66.96 October, 2007 to
September, 2008
Service Tax 77.54 October, 2008 to
September, 2009
Service Tax 0.61 September, 2009 to
March, 2010
Service Tax 116.84 October, 2009 to
September, 2011
Service Tax 0.87 April, 2011 to
September, 2011
Service Tax 30.64 April, 2011 to
March, 2012
Service Tax 23.36 April, 2012 to
September, 2012
Service Tax 28.35 October, 2012 to
March, 2013
Finance Act, 1994 Service Tax 6.72 April, 2004 to
August, 2009
Service Tax 0.15 April, 2009 to
March, 2010
Service Tax 0.02 2010-11
Income Tax Act, 1961 Income Tax 10.15 AY 2009-10
Income Tax 1.67 AY 2010-11
Income Tax 47.59 AY 2011-12
Name of the Statute Forum where dispute is pending
Customs Act 1962 Commissioner of Customs and Central Excise,
Ahmedabad
Assistant Commissioner of Customs, Mundra
Deputy Commissioner of Customs, Mundra
Commissioner of Customs, Mundra
Finance Act 1994 High Court of Gujarat
Commissioner (Appeals) Rajkot
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Commissioner / Addl. Commissioner of Service Tax,
Ahmedabad
Commissioner / Joint Commissioner of Service Tax,
Ahmedabad
Finance Act 1994 High Court of Gujarat
Commissioner of Service Tax, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Income Tax Act 1961 Income Tax Appellate Tribunal
(d) According to the information and explanations given to us, the
amount required to be transferred to investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
(viii) The Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, banks or debenture holders.
(x) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company.
(xi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained, though idle/ surplus funds which were not required for
immediate utilization have been invested in Fixed Deposits and Inter
Corporate Deposits.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E
per Arpit K Patel
Place of signature : Ahmedabad Partner
Date : May 1, 2015 Membership Number: 34032
